Article for HotelExecutive.com, September 16, 2013
by John Manderfeld, president, Marin Management, Inc.
Sometimes it’s right under your nose—hundreds, perhaps thousands, of additional room nights for your hotel—not from a new prospect, but from an existing client. It happens over and over: a hotel sales team happily enjoys the repeat business of a major corporate or government account while never considering that they have barely scratched the surface on the account’s potential. Countless times I have discovered that the best accounts of a hotel are also the best account of one, sometimes several, of our competitors, so I was not getting as much of the my best account’s business as I thought.
One of the least discussed realities of hotel sales is that every prospect with more than about 200 employees has numerous departments and travel decision-makers. Getting business from as many of those department and decision-makers as possible is often called “account saturation”. Too often we work so hard to find one or two people who will listen to our sales pitch and sign up as customers that we think that we have captured all of the client’s business. Rarely is that ever true.
It seems that this illusion is sometimes promoted by our clients. Many times I have been told by a client that he or she is the organization’s sole travel and meeting planner only to later find that my contact had embellished a little about his or her role. Here is one example: My company operated a full-service hotel just a couple miles from a major defense contractor with about 16,000 local employees. The sales team was quite thorough in their canvassing for new accounts. One day I asked to review the file on the defense contractor, which was already one of our largest accounts.
I was surprised to see that every sales call, every letter and every proposal had gone to the same person at this company. I was told that she was the only person at the company who booked hotel rooms, meetings and banquets. I asked how that was possible for a company generating about 30,000 room nights per year; and how did our sales team believe that she was the only decision-maker for such a large company.
The answer: “Because she told us so.” Of course, a little research showed this was not true. Thousands of hotel stays each year were being booked by others who were invisible to our sales team. What a shame!
There was one other riddle to this story. A quick check showed that the hotel sales team had not called on their only contact at this company for three months. Why? “She has been on a leave of absence.” The sales team must have believed that while this travel manager was absent the company stopped all travel.
Doing a thorough canvassing for new business is important, but often not as important as canvassing for new business from existing accounts. The fact is that large accounts are really collections of dozens of small and medium-sized accounts, each with its own travel and meeting decision-makers. And each of these decision-makers uses different criteria for evaluating whether to use your hotel. For example, some may be very price conscious and others not.
Let’s review eleven actions that so many sales teams don’t do—but should—when working with major demand-generators, such as large companies, government offices, military facilities, medical centers and universities:
- Look for travel and meetings related to employee training. Often this type of travel is handled by the training department, human resources department, supervisors at the department affected by the training and training contractors. Because of the increased requirements for employees’ technical knowledge and education and the increased focus on customer satisfaction, training travel has grown enormously in the past several years. Sometimes travel for training is group travel, but it is just as often individual travel. Training travel may be for one day or several months for each traveler. ACTION: Ask, “Who handles your training?” Then, break it down. “Who handles your service training? Who handles your technical-support training? Who handles training for new products?” etc.
- Look for supplier travel. Much of the inbound travel for large local organizations is from their suppliers of goods and services. This travel is almost never managed by the local organization. It is managed by the vendors supplying the local organization. ACTION: Ask “Who are your largest suppliers? Where are they based?” Then ask about their suppliers of specific goods and services, for example, “Who supplies your technology components?” Create separate files on travel management for each of these suppliers, and call on them with great frequency. Often these questions can also be answered with thorough Internet research. Often you will need to talk to someone from every department, including the purchasing department, to get a complete picture of all of their vendors, because purchasing by all companies is departmentalized to some degree. Purchasing departments may buy goods, but they rarely buy all services. The maintenance or manufacturing supervisor would usually handle a large maintenance contract for heavy machinery, for example. It is important to know something about a prospect’s business so that you can ask specific vendor questions. For example, if a prospect manufactures computers, ask who sells them each of the computers’ components. Another example: When you asked about training you learned that they contract out some of it. Find out who the training contractor is and make the sales call.
- Look for customer travel. Major companies have customer-related travel in two categories–travel from potential customers evaluating using the company and travel from existing customers overseeing the existing business relationship. The decision-makers for inbound travel for potential new customers are often controlled by the company’s sales organization. Travel from the company’s current customers, however, may be controlled by a service department. For example, often customer-to-supplier travel is for training customers on the best practices for using the suppliers’ services. ACTION: “Who are your largest customers and where are they based?” Again, specific questions work best, such as, “Have you added any new distributors for that new outboard motor since we talked last?” Often these questions can also be answered with thorough Internet research.
- Look for employee-relocation travel. Employee relocation can often be for long-term stays. ACTION: For all corporate and government prospects and current accounts ask, “Who handles your inbound employee relocation?”
- Look for sales-related travel. ACTION: For all corporate prospects and current accounts ask, “Who manages your sales travel into our area?”
- Look for general administrative travel. This includes travel for doing personnel reviews, general planning, budgets, facility inspections, insurance reviews, legal and policy compliance audits, etc. ACTION: For all corporate and government prospects and current accounts ask, “Who handles your inbound general administrative travel?” In small and medium-sized companies, the answer is often the office manager or assistant to the president. In large companies, the answer may be the travel department, but never underestimate the influence each department head has for this type of travel.
- Look for special departmental travel. Some departments have ongoing special travel needs. For example, the research and development department could have a corporate packaging specialist visit regularly; or the safety committee may get a quarterly review from the headquarters’ risk-management officer. Information technology (IT) departments may have special travel. ACTION: For all corporate and government prospects and current accounts ask, “Are there any other departments with regular travel needs?”
- Look for special-event travel. Special events that require lodging are numerous, so do not miss any possibilities without investigating them. ACTION: For all corporate and government prospects and current accounts ask:
“Who handles travel for your board of directors meeting?”
“Who handles travel for your shareholders meeting?”
“Who handles your employee awards events?”
“Who handles your employee Christmas party?”
“Will anyone from out of town be coming to your company picnic?”
9. Get the contacts for all of the organization’s regional and international offices. Here you will find an abundance of new leads and prospects for your hotel.
10. When you have special promotional events, such as an open house, mixer or holiday party, don’t just invite two or three representatives of large organizations, invite everyone in management and administration.
11. Plan separate special events just for each of your large accounts and prospects, such as “University Day” and “Acme Manufacturing Appreciation Party”.
It is clear that knowing more about your major clients is key to discovering more business opportunities. Of course, there are many online business directories and reference sites that can help your research.
Take a fresh look at the business that you may be missing from your existing accounts, and you will find more than you expected.
John Manderfeld is president of Marin Management, Inc., a hotel management and consulting company founded in 1990 now managing more than 20 hotels in six states. He can be reached at firstname.lastname@example.org.