According to the Encarta English Dictionary, one of the definitions of Leverage is the power to get things done: "power over other people, especially something that gives an advantage but is not referred to openly". In the last issue of Keeping it SiMMPLe, we discussed the power of knowledge. Knowing your total volume of spend with various suppliers is one of the most impactful ways to leverage your buying power. For this discussion, let's focus on hotel spend and let's not limit it to group spend, but also include the business travel hotel spend. Knowing your enterprise wide hotel spend sounds simple, but it is not always an easy task as most large companies have employees dispersed throughout the various levels and regions of the organization that buy hotels in group or individual scenarios. If you are from the association world, you can have meeting expenditures generated by the Headquarters, regions or chapter affiliates. Nevertheless, once you begin to understand your enterprise wide hotel spend you can begin to gain visibility into: - Spend by Hotel Company, hotel chain, and independent hotels
- Volume of business with the hotels: # of meetings, # of room nights, dollar volume
- Synergies of hotels being used by both the group and business travel program
- Alternatively, the business travel hotels that are not being used for group business
Now that you have some of this data, you can use it to develop business intelligence and begin to develop a plan to leverage your spend. For example: - Identify a certain number of your business travel hotels to target as hotels for small meetings
- Examine the potential benefit of shifting some of your market share from one chain or independent hotels to another hotel company
- Will hotels give you additional discounts or concessions for this increased market share
- Determine if you can guarantee certain volume to hotels in order to get a better rate
- Do you have a policy that can enforce which hotels must be used by your company
On another note, just this week I heard a great story from one of my industry friends which is a great demonstration of Leverage: the power to get things done. She is a meeting director at a multinational Pharmaceutical company. I love this story because it hits on so many of the points that I feel are critical to the personal success of those who are driving a Strategic Meetings Management Program within their organizations. She is somewhat new to the company so she proactively requested a 10 minute meeting (note the request was for a small amount of time) with one of the Business Unit Vice President's (VP). She wanted to share some basic meeting metrics from 2010 and 2011 (note that the data had to be brief, focused and relevant). In fact, the conversation with the VP and his team went on for 30 minutes, as there was great interest in understanding their meeting metrics. Ultimately, the team decided they could spend their money more wisely by utilizing hotels in the company's preferred supplier program, rather than using hotels outside of the program (note the desire to leverage spend by the client). This is a wonderful example of strong stewardship for a corporate SMM program: being proactive, using data to tell the story, identifying the cost of inaction. |
