Direct Sales: Getting the Biggest Bang for your Buck

The past decade has been unprecedented in the hotel industry. All success indicators (occupancy, average rate, and RevPAR) have climbed steadily year after year and owners have enjoyed record profits. So what were your sales people doing? During those “feast” periods in full service hotels, it is likely that the sales person was turning away more business than was booked. And in limited service hotels, is it likely that the sales person was filling in at the front desk and had little or no, direct sales activity.

But as we all know, the supply/demand dynamics will always change, and now most hoteliers are either faced with a crisis or are prepared withstand the poor economy, just barely getting by. Then why be complacent with a sales person or sales team that is not proactively generating business for the future, especially during the feast periods? A consistent, strategic, and proactive approach will offset any negative trends in a downturn and will protect an owner’s investment.

It is never too late to set up a plan that lays the foundation for generating and maintaining business? This article will address the importance of creating a great sales force and some tips on how to do it.

Establish a Strategic Plan:

Staying true to the property’s position is important as it is the foundation from which all plans stem. The position determines what services and amenities are offered; the type of business the property caters to; and the rates given. With the positioning in place, determine the most realistic mix of business on any given day for a year as the patterns and demand for business change daily based on season, day of the week, holidays, and local factors. That level of detail will provide the basis of the sales plan as it will provide the guidelines for which market segments the sales department solicits, at what rate, when the business is to be consumed, and the volume of business, broken down on a daily basis.

Create and Maintain a Database of Accounts:

We know that a function of marketing is to establish an identity or market presence in order to generate business. Typically those efforts impact business “indirectly”, such as thru GDS bookings, rack rated transient business, or weekend business. The sales team’s function is to impact business “directly”. Therefore, to ensure that the sales department is functioning to accomplish this effort, it is important to create and maintain a database of existing and potential accounts. This is done once the strategic plan is established which incorporates the volume of business per segment to be consumed on an annual basis. For example, if the annual plan calls for corporate group business at 25,000 nights, at an average rate of $250.00, then the sales department is responsible for soliciting that volume on an annual basis. That is done through an on-going process of each sales person managing his/her accounts. The management is based on a systematic account trace system which allows a sales person to adjust the potential volume of an account. If an account drops its volume potential, then new accounts are identified and opened in order to maintain the desired goal of business.

Qualify, Qualify, Qualify

We know that location, location, location is a key ingredient to a property’s success. But that is just the starting point. Obviously, the right product needs to be created for the targeted markets and pricing should be set correctly. But to ensure that the sales team is successful in booking business and establishing a good database of business, the best approach is to qualify, qualify, qualify.  A person who sells shoes would not be successful if he/she did not first fully understand what the customer wanted i.e. size, color, style. But how many times does a hotel sales person try to make a sale without a good understanding of who the customer is and what the customer wants in a property? A sales person is more successful in closing business if he/she takes control of a call and understands the customer’s needs and “buy decision”. The successful sales person is one who asks questions. Identifying all the needs of the customer will place the sales person in a greater position to book business in the most cost efficient manner and will produce an account base of real potential business, quantified on roomnight/meeting potential. An effective sales person will fully address a customer’s needs. Even if your property has the greatest fitness center in the world, it is important to allow the customer to express those needs. Asking questions will help the sales person understand what is important to the potential customers and will help them understand the level of importance. The information collected will once again place the sales person in a position of strength in closing the business. Taking the time to fully uncover needs and to understand the level of their importance will allow the sales person to keep the customer focused on those stated needs. If the property cannot fulfill the customer’s primary needs, then the sales person can just gracefully move on.

Accountability

Accountability is an important element to keep the sales person working efficiently and productively. Plan ahead by creating and implementing a well thought-out marketing plan. That is the basis for establishing sales goals. Sales accountability is important to ensure results. It is equally important to establish and maintain systems and procedures to monitor productivity of each sales person on on-going and consistent basis.

Therefore, to maximize the sales person’s performance, it is important to establish specific and meaningful goals, broken down on a monthly and weekly basis; and to establish a culture where the actual performance vs. goals is critical for job performance. But it is also important to ensure that steps are continuously in place to generate business. Set goals which include activities to produce booked and consumed business (such as weekly sales call target, new accounts opened, and client entertainment goals) as well as booking and consumed rooms goals. On-going and consistent monitoring and evaluation will foster performance and will quickly help identify non-performers.

Maintain Excellent Work and Customer Interaction Habits

One of the strongest attributes of a top sales person is that of inspiring confidence. Who wouldn’t want to conduct business with a sales person who is eager to help, conscientious in attending to your needs, and does what he says he will do? Reliability and good communication develops trust. It is that trust that will inspire clients to book with a sales person over and over, even if the air conditioning breaks down or construction is going on across the street. Trust that the sales person has done his or her best and will honestly address every situation can inspire loyalty and help overcome any potential hard feelings if problems arise that the sales person has no control over. Additionally, the great sales person will return calls/emails, send out correspondence promptly and will always follow up. Those great habits will translate to revenues for the owners/managers in the good times as well as the bad.

So, with a few processes in place, the owner/manager is in a better position to ensure that he is getting the “biggest bang for his buck” with a focused, proactive, and accountable sales force and is protecting the property from any downturn in the market place.

Bio:

Representing a “who’s who” roster of clients, Brenda Fields of fields & company, has worked with a number of industry leaders and innovators, from hotelier Ian Schrager and real estate developer Harry Macklowe, to global brands including Starwood Lodging Corporation, Planet Hollywood, Vornado Realty Trust, Choice Hotels International, Olympus Real Estate Corporation, and Apple Core Hotels.  In addition to major hospitality brands, Brenda’s consulting practice includes a wide range of independent properties around the country, such as The Kitano Hotel, New York; Woodlands Resort and Inn, Summerville, South Carolina; the former Bel Age Hotel, Los Angeles, CA; Mondrian Hotel, West Hollywood, CA, and more.

Brenda brings a hands-on approach to problem solving along with her two-decade long record of results as both a consultant and in corporate sales and marketing to each challenge.  She has honed a reputation for helping owners and operators achieve target revenues through development and execution of cost effective, workable strategic plans that maximize profits and build stronger, sustainable brands.

Brenda is a member of the International Society of Hospitality Consultants; currently on the Americas Board of Director for HSMAI; is Immediate Past President of the Hospitality Sales & Marketing Association International in NYC; and was named  one of “The Top 25 Most Extraordinary Minds in Sales and Marketing” by HSMAI” for 2007.  She was awarded the “Leadership Development” award by HSMAI in 2009. And additionally, was awarded “Best of the Best” by HSMAI in 2006 for her contributions on the Awards and Recognition committee. Brenda serves as a member of the Editorial Board of Hotel Executive.com, is a regular contributing editor to international publications Hotels Online, Hotel Resource Weekly Network News, eHoteliers, and 4Hoteliers.  She is also a member of the Real Estate Board of New York.

Brenda can be contacted at brenda@fieldsandcompany.net; 518 789 0117 or by visiting http://www.fieldsandcompany.net.

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Global Marketing: Does One Size Fit All?

The advancement of technology has made the world a smaller place. Movies, television, and the Internet have created a world which has fostered a better understanding of and access to different cultures. Teenagers in remote areas of the world dress and speak like teenagers in the most urban areas of the world based on their journeys thru the Internet. And a rural homemaker has access to shopping at Saks Fifth Avenue in New York City just by logging onto the Internet.

But, does this familiarity and exposure lessen cultural characteristics or nuances? Is it correct to assume that this familiarity creates instant purchases of your product? And does this also ensure that your product will be selected over your competition in these markets? This article will address key components to consider when planning and implementing global marketing campaigns or initiatives or in just reaching specific international markets.  Understanding the key elements of marketing combined with a campaign that is tailored to an in-depth understanding of the targeted markets will guarantee the most effective return on investment. Whether you are McDonalds, The Gap, or a small bed and breakfast on Cape Cod, Massachusetts, there are basic tools to apply and areas to address to ensure that you capture the desired international business.

Web Site:

Without doubt, the Internet has changed the way we connect with people, conduct research, and buy products. The Internet has leveled the playing field, allowing a small, independent property to compete with its local global brand counterpart. Your web site, properly designed and optimized, is the most cost effective component in reaching international markets.

So, after identifying your targeted international markets, have your web site translated into those languages. At the same time, consider paid search advertising and local language banner ads in those identified international markets. Look into the most popular local search engines. For example, in China, the otherwise prolific search engine, Google, ranks well below the most popular (and inexpensive) search engine, Baidu. So it will be worthwhile to research those targeted markets to determine the most cost effective way to reach them thru search engines, paid search, and local banner ads.

Language and Currency:

Language is powerful. In a remote African tribe, words for “sadness, worry, and disappointment” do not exist, and as a result, that culture has a group of happy and optimistic people. And in another culture, there is no feminine word for a business executive. As a result, there are very few women executives. So continuing with the concept that language is powerful, if you had to choose between two similar products, one in your language and one in another language, which one would you choose? With the exception of choosing Carla Bruni’s CD or a George Clooney movie in any language, it is probably safe to assume that one would choose the product in his own native language, since you know what you are getting. To add to that, it is important to have the correct translation to ensure that your message reaches the target audience and compels them to buy your product. Have you seen English from America that has been translated from another language? A technically correct translation will not always reflect the local flavor and tone of the desired message. The reverse is certainly true when English is translated into other languages. So it will be very beneficial to have the translations represent the local style in order to truly appeal to those potential customers.  Rather than hiring a basic translation service, it is important to ensure that those local nuances are communicated into the translated language.

In addition, how many of us will buy a product without knowing the price? So why would we expect a foreign customer to book our hotel when we ask then to figure out on their own, the currency conversion? You can increase your reservation conversation rate when the potential customer has immediate access to the cost of the room in his or her own currency. Once they leave your site to get information, it is unlikely that they will return.

Localization:

Localization is the key to global marketing, or reaching international audiences. As Americans, we are a diverse group with different experiences, interests, climates, and hot buttons. An effective marketing message for a New York City audience will be different than a message to an audience in San Diego, California. Certainly, the same is true for many other international locations, especially from the emerging markets of Brazil, Russia, India, and China where there are numerous dialects and cultural differences within one country. Therefore, it will be effective to narrow the targeted markets to specific regions or cities and base communications in that language, incorporating that specific culture. A “one size fits all” marketing plan or web site optimization will not result in the best return on investment. Greater efficiency will come from specific messages tailored to a specific audience.

Reservations:

Having your web site translated into the desired languages, with translations that are specific to the local region, and placed on the local popular search engines, is the beginning to tap into those targeted international markets. The final step is to ensure that the customer can book your property easily and with confidence. Not all countries or regions have established on-line buying habits. So for those markets, you may want to have a toll-free local phone number to handle the bookings and placed on the web site. For those markets which are comfortable booking online, ensure that the credit card payments that you accept include those credit cards used by the international customers. An added plus is to have the reservations page translated into the other languages, with an automatic confirmation back to the customer in that language, as well.

“One size fits all” may work when buying tee-shirts, but not so much in penetrating key international markets. With a few basic, but critical, components in place, owners and mangers are in a great position to compete, cost effectively, for international business and to lay the foundation for future growth.

Brenda Fields:

In her more than 27 years as a marketing and sales pro in the hospitality industry, Brenda Fields has emerged as the “go to” consultant for independent and/or privately owned hotels and resorts seeking real-world solutions for today’s market challenges.

From small boutique hotels to large convention properties, Brenda has created and implemented highly successful Strategic Plans that enable owners to achieve target results despite market conditions. With extensive expertise in pre-openings and repositionings Brenda was responsible for the successful opening and stabilization of the Paramount Hotel in New York, one of the first boutique hotels.

With a “who’s who” roster of clients, Brenda has worked with a number of industry leaders and real estate investment companies including Starwood Lodging Corporation, Planet Hollywood, Choice Hotels International, and Olympus Real Estate Corporation, among others.

Brenda is a member of ISHC (International Society of Hospitality Consultants); serves on the Americas Board of Directors for HSMAI; is PastPresident of the Hospitality Sales and Marketing Association International Greater New York Chapter of over 500 members; and was recently awarded “The Top 25 Most Extraordinary Minds in Sales and Marketing by HSMAI. She also received “Leadership Development” and “The Best of the Best” awards from HSMAI. Brenda can be reached at: 518.789.0117/phone orbrenda@fieldsandcompany.net, http://www.fieldsandcompany.net

 

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Are You Ready for the Downturn?

Key markets, world wide have experience unprecedented occupancies, average rates, and RevPAR for over a decade. New York City and London in particular have experienced average occupancies well over 80% for the past several years, driving record average rates and RevPARs.

The immediate outlook remains promising but the future is less bright according to prominent analysts i.e. PricewaterhouseCooper and Smith Travel Research. One school of thought is “If it ain’t broke, why fix it?”. But we know that the hotel industry is driven by various economic factors that create many ups and down. The bad times don’t last forever and the good times don’t last forever, either. So what better time to address any weaknesses in the organization, flaws in the system, or product deficiencies, than when occupancies are strong and the outlook is favorable?

The return on investment on ensuring high standards in all areas is far greater than the cost of a major upgrade and marketing expenses to bring customers back after their bad experiences in your property.

This article will address the benefit of early prevention and will identify areas to evaluate in order to ensure that your property is well positioned for any downturn so that it will remain profitable and vibrant.

Physical Condition:

Continuous periods of high occupancy create lots of wear and tear on a property and taking rooms out of inventory for maintenance and deep cleaning is most likely not an option to most owners or managers when demand is high. During these feast periods, guests will pay the going rates just to have a room and will accept it in almost any condition rather than forgo the business trip or family holiday. But, once occupancies start to fall the tide will turn and hotels will experience a “Buyer’s Market”. Those properties that had noisy air conditioners, stained carpets, or slow shower drains, will find themselves eventually making the investment to be competitive in the new business environment. So why wait when we all know that “A stitch in time saves nine”.? A minimal investment now and minimal loss of revenues will more than be made up by having a loyal customer base, which will stay with you with the market turns.

Technology

Technology advancements have allowed property’s greater ease and efficiency in dealing with customers in areas such as making reservations, sending out confirmations, and preparing the invoice upon check out, just to name a few. We know, too, that maintaining the latest equipment is a major expense. The days of telephone as a line item on the P & L Statement are long gone, as now, free domestic phone calls in guest rooms are becoming the standard. As guests travel with iPods, cell phones, and lap tops, the demand for the latest technology in-room is great. So, it may be wise to evaluate your property and the needs of your customers to analyze the effectiveness of your technology; research what is available to you; and decide what, if any, areas should be upgraded for you to remain competitive in the marketplace.

Employee Training:

With continuous high demand, it is difficult for owners and managers to ensure that customer service is top of mind with their employees. Housekeepers are rushed to clean rooms for that next check in and the front office is typically rushing to check guests in, find rooms, check out guests, and answer phones, all at the same time. And when occupancies are high in your local market place, it is easy to become complacent with service that is not excellent. But when the demand falls and guests have a choice of properties, they will remember who treated them well and appreciated their business. Therefore, the commitment to invest in training during this strong market along with ongoing follow u, will place the property in a much stronger position to enjoy and maintain good business during the down times.

Direct Sales:

The cost of a direct sales effort can typically represent 50% of the marketing expense budget, with most of the expense in labor and benefits. When business declines, this is a key area that is evaluated to ensure that there is a return on investment. But, what is happening with direct sales during the feast periods? Many times, there is no direct sales plan in place. Sales people meet their targets because of the great demand and there is little, if any, proactive sales approach to ensure that there is a database of potential business that is well-qualified based for present and future business. Therefore, it is important to place systems and procedures in place so that in a downturn, good habits and work ethics are already in place to ensure that your property excels in market share.

Web Site:

The web site is probably the most cost effective marketing tool available. Web site research and web site bookings have steadily and dramatically increased, contributing to an average of 50% of the bookings.  So why wait until bookings fall of to ensure that your web site is well designed and fully optimized to generate bookings? And why wait to ensure that you have the best booking engine to capture that guest who wants instant information and instant booking capabilities. Put a program into place so that you can proactively address needed enhancements to your web to stay current with trends and technology.

Therefore, to ensure that you are well positioned when there is a down turn, it will be very important as of now, when business is strong, to implement these initiatives on an ongoing basis. This will allow an owner or manager to enjoy profits, satisfy guests, and attract and maintain top employees.

Bio:

In her more than 25 years as a marketing and sales pro in the hospitality industry, Brenda Fields has emerged as the “go to” consultant for independent and/or privately owned hotels and resorts seeking real-world solutions for today’s market challenges.

From small boutique hotels to large convention properties, Brenda has created and implemented highly successful Strategic Plans that enable owners to achieve target results despite market conditions. With extensive expertise in pre-openings and repositionings Brenda was responsible for the successful opening and stabilization of the Paramount Hotel in New York, one of the first boutique hotels.

With a “who’s who” roster of clients, Brenda has worked with a number of industry leaders and real estate investment companies including Starwood Lodging Corporation, Planet Hollywood, Choice Hotels International, and Olympus Real Estate Corporation, among others.

Brenda is a member of ISHC, served on the Americas Board for HSMAI, is Past President of the Hospitality Sales and Marketing Association International Greater New York Chapter of over 500 members. She was recently named  “The Top 25 Most Extraordinary Minds in Sales and Marketing by HSMAI. She also received “Leadership Development” and “The Best of the Best” award from HSMAI. Brenda can be reached at: 518.789.0117/phone or brenda@fieldsandcompany.net,

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Seven Habits of Highly Effective Sales People

For hotel staff working on Christmas morning, either behind the front desk or in the housekeeping department, a rooms sales position may look like a pretty cushy job! Sales people usually don’t have to work holidays or weekends and seem to have the freedom to come and go as they please. But, in reality, a sales position bears it own challenge and responsibilities to the property. Sales has the primary responsibility to generate room revenues for the property during the times when business is needed. The key is to building occupancy in low demand periods and increase average rates in peak times to maintain profitability.

But, in order to do this successfully, it is important that a sales person is at the top of his/her game. An effective sales person should be able to produce results despite market conditions and product drawbacks and to develop existing business by taking one meeting and turning it into four, as an example.

It is also important to understand that “sales” is a skill, not a personality trait. Expert sales skills can produce business despite product deficiencies, rate structure, or market conditions. Since most owners and operators do not have perfect properties and supply/demand dynamics can change, it is even more critical to ensure that each sales person is highly skilled to generate business and to deal with client objections and problems effectively. A dedication to expert sales skills, thru a formal training program, is the best insurance for market share and profitability.

Although formal sales training is necessary, it is not the entire solution to ensure that each sales person is effective. This article will address some important “habits” that are demonstrated by the most effective sales people, to assist owners and managers in developing a highly effective sales department.

Habit #1: Know your product and know your competition.

Unfortunately, it is far too common that an established sales person has never been to a competitive property. Without that first hand knowledge, it is impossible to sell effectively if a customer is shopping your property as well as shopping your competition. The first step in effective selling is to know your property i.e. its strengths and its weakness and what it offers to its target audience. The next step is to evaluate the competition’s strengths and weakness and compare it to your property. A personal inspection and honest assessment will place the sales person in a position of strength in convincing a customer to book your property over the competition.

Habit #2: Know who your customer is.

There are few products, if any, that are all things to all people. Hotels are designed and built to attract a specific segment of the market and financial projections are based on certain assumptions of rates and occupancy generated from those specific markets. Therefore, it is important for a sales person to understand the positioning of the property and to know its target markets. Without this basic foundation, valuable time is wasted in trying to sell to a customer who will never, never use your property. For example, a budget/limited service property will not appeal to a customer looking for 24-hour room service and Frette linens on the beds. And conversely, a customer looking strictly for the lowest rate, does not care about deluxe amenities and original artwork in the lobby. Kenny Rogers had it right when he sang the song, The Gambler, “Know when to hold ‘um. Know when to fold ‘um. And know when to walk away…..”. If you know for whom your property was designed, you won’t have to gamble on finding the right fit with every customer.

Habit #3: Listen to your customers. Understand their needs.

Having the first two habits in place will allow a sales person to fully address a customer’s needs. Even if your property has the greatest swimming pool in the United States, it is important to let the customer tell you if that is a need of his or hers. Asking questions will help you understand what is important to your potential customers and will help you understand the level of importance. The information collected will once again place the sales person in a position of strength in closing the business. For example, if close proximity to the airport is the most important need for a company bringing in international meeting attendees and your hotel is the closest, that will help keep negotiations focused if the client comes back to you with lower quotes from the competition which is located much further away. Taking the time to fully uncover needs and to understand the level of their importance will allow the sales person to keep the customer focused on those stated needs. If the property cannot fulfill the customer’s primary needs, then the sales person can just gracefully move on.

Habit #4: Balance good customer relations with fiscal responsibility to the owner.

Sales people tend to be attracted to “sales” because of their strong social or interpersonal needs. They like people, enjoy pleasing people and like to be liked. Therefore, sometimes a sales person is more committed to pleasing the customer at the owner’s expense. But an effective sales person is able to leverage his/her good customer relations with their financial responsibilities at the property. The customer has respect and confidence in a sales person who understands the customer’s needs, along with the property’s market position, demand patterns, and is able to negotiate intelligently so that both parties are satisfied.

Habit #5: Develop great administration skills.

Sometimes, people with strong people skills are not “detail” people. But attention to detail is tantamount to inspiring the confidence of clients. How can they expect a meeting to go well if the sales person has misspelled their names, given the incorrect title, or didn’t include the afternoon coffee break that was requested? Ensure exact details, check work for accuracy (dates, spelling, names, titles, etc.) Be organized. A neat desk delivers the message that the sales person is in control and is organized, which again inspires confidence. And be responsive and consistent. Good administrative skills will always command respect.

Habit #6: Be reliable and consistent.

Do what you say you will do. Or if circumstances prevent you from delivering on a promise, just communicate that to your client. Reliability and good communication develop trust. It is that trust that will inspire clients to book with a sales person over and over, even if the air conditioning breaks down or construction is going on across the street. Trust that the sales person has done his or her best and will honestly address every situation can inspire loyalty and help overcome any potential hard feelings if problems arise that the sales person has no control over. Return calls and send out correspondence promptly and follow up. Consistency is what constitutes reliability.

Habit #7: Continue to grow and develop.

Business is ever changing and ever evolving because of new technology, new markets, and dynamic supply/demand factors. The consistently effective sales person understands that staying current with these issues will foster sound strategic planning. A well-founded plan allows for either new strategies or staying the course. Several suggestion for staying current are to join industry associations such as HSMAI (Hotel Sales and Marketing Association International), which offers invaluable opportunities to stay current with trends and new technologies. Read local and national newspapers. Stay current with local and national trends that impact your business. Join local community organizations. By implementing these steps, not only is the sales person enhancing his/her own effectiveness and marketability, but a by-product is that the property he or she represents is promoted as well.

Therefore, to ensure that an owner or manager is getting the best ROI from their sales staff, formal sales training along with the implementation of these seven habits will assist owners and managers in developing and maintaining a highly effective sales department.

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Creating Results: Strategy vs. Knee-Jerk Reactions

Who would not agree that a well thought out and well executed strategic plan is the basis for ensuring the best results? But how many times do we go off course when the results aren’t there or when the results aren’t there when we expect them? And how many times to we take short cuts in the planning process and are disappointed in the results? All of the planning goes out the window and we seize on any idea that may generate business. We look for that quick fix and more often than not, go deeper into the hole!

Small, independent hotels have the added challenge of limited marketing resources. Marketing expenses are typically established as a percentage of revenues.  Therefore, each dollar spent and each strategy implemented must be efficient and produce the greatest ROI.

This article will address the key components to establish a plan; how to effectively evaluate its effectiveness; and how and when to change course, without “knee-jerk reactions”.

The Planning Process

  • Determine your position in the marketplace. The first step is to understand your hotel’s position in the market place. That will determine which segments of the market you will attract; what rates to charge, per segment, per season; and what services and amenities to offer.  A firm understanding of who you are, where you want to be in the marketplace, and what you offer (relative to your competition and general market conditions), will determine all strategic plans and will influence any decisions to be made with changing market conditions or filling specific need periods. It is tempting to rush into decisions and change course in the hopes to generate business, if your property’s performance is below expectation. But a clear focus and clear understanding of your position, and establishing strategies consistent to that positioning, will avert costly mistakes for both the short term and the long term.
  • Create a detailed rooms budget. Planning is the key to ensure effective strategies. A solid rooms budget is one laid out on a daily basis, which clearly has incorporated demand factors and well-founded assumptions, by day, by market segment, with rooms and rates per segment. Each market segment has its own peaks and valleys on a daily basis as well as on a seasonal basis. This is the result of factors such as holidays, conventions, and seasonal trends. Incorporating all of these factors will create an accurate projection of occupancy and average rate when laid out on a daily basis as opposed to taking “short cuts” by just using monthly totals and projections to establish budgets. This also lays the foundation for improved budgeting in other departments, especially food and beverage. For example, 100% occupancy made up of groups which are out of the hotel all day, is not the same as a full house of other segments from which you can assume a certain percentage to impact room service or the restaurants.
  • By accurately identifying and quantifying all potential segments on a micro basis and understanding each market segments’ travel trends and needs, the hotel is able to proactively solicit those specific markets, efficiently and cost-effectively, without wasting valuable resources, as well as understanding when to change course when market conditions change.

Changing Strategies

  • Define your objective(s).
  • We all know about “….the best laid plans of mice and men…..”! So if results are not there for whatever reason, it’s time to plan and restrategize. Some strategies produce short-term results, while others pay off in the long term. For example, is the goal to generate immediate revenues or is the goal to establish a market presence that will grow over time? More often than not, the two goals are mutually exclusive. For example, an “image ad” campaign is designed to create awareness over time, without having an immediate impact on revenues. Conversely, a significant rate reduction or a special promotion can have an immediate impact if planned, executed, and marketed properly. But this strategy can have a negative long-term impact, depending on your hotel’s position in the marketplace and which segments are targeted.
  • So in defining your objective(s), it is important to tie in which segments will be impacted i.e. group, weekend, or rack rated business, and the impact of your strategies in the over-all mix of business.  Robbing “Peter to pay Paul” does not accomplish anything and is pretty much a waste of time and resources. So it is useful to look carefully at the segments.

  • Set realistic expectations: It is tempting to try to be all things to all people by using a “shotgun approach” to marketing your hotel, assuming that the greater the exposure, the better and business is business regardless of who it is. But by staying true to the positioning and by determining which segments of the market are viable for your hotel, you can then ensure that all marketing strategies are cost effective and actually reach the target audience.
  • Therefore, it is important to establish strategies for each market segment to include the means to reach them and a time frame to realize results. Each marketing resource will produce a different ROI and different timetable to impact business. By understanding each potential segment, i.e. who it is, the reason for the buy, and each segment’s travel trends, the hotel is in a much stronger position to maximize occupancy and yield by using its resources wisely.

 

Look into the market place in order to quantify potential business per segment. For example, in a down market, how much business, per segment, can be realized even when the strategies are effective and on target? Should you look for a windfall of roomnights or revenues, or, is it wiser to measure market share and use that as the measurement to evaluate the effectiveness?

By taking the time to establish a thoughtful and detailed plan, hotel owners and managers will not only take control of their business and be able to weather any storm, but will approach simple and difficult business decisions alike, from a position of strength and confidence.

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Catering Sales in Boutique Hotels: How to Maximize Revenues and Optimize Sales Productivity

Catering sales in small, boutique hotels can conservatively, represent 50% of the total food and beverage revenues. So achieving catering revenues can make the difference between food and beverage profitability and food and beverage loss, and can significantly impact total GOP.

One of the biggest challenges in small hotels is to clearly define catering responsibilities. Does it belong with Food and Beverage or does it belong with Sales? Is it an operations function or a direct sales function?

Over the years, customer needs and tastes have evolved, and new competition has emerged with demand for free standing restaurants, lofts and penthouses, and tourist attractions. With the many venue choices for customers, it is important to understand how to drive business into your venue. And with the impact on GOP, it is critical to maximize those revenues generated.

Therefore, in order to drive market share and maximize revenues, it is necessary to:

  • Identify and understand all of the components which create awareness in the market place.
  • Generate the best and highest revenues on any given day.
  • And successfully integrate and revise each component based on specific needs and market conditions.

The first step is to clearly define the “sales” and “operations” responsibilities” of the staff, to maximize performance. Then, understand and work with the components. The components are: direct sales, operations, marketing, pricing, and yield management.

THE COMPONENTS:

  • DIRECT SALES

Many times, we refer to “Catering Sales Managers” as sales people, when in reality the catering sales manager handles only inquiries that come into the property, sends out contracts and event orders, and oversees the functions in an operations capacity. “Sales” is really just order taking and takes a back seat to operations.

1. Establish a Strategic Plan

By definition, “sales” is the proactive approach to identify and solicit business person to person. If “sales” is the goal, it is important to establish an action plan based on an overall strategic plan. A well established foundation will provide the confidence to “stay the course” and avoid rushing into short term strategies.

The strategic plan should include targeted market segments, market position in competitive set, and demand/need periods. The action plan should be very specific and targeted, addressing in great detail, how to achieve the targeted revenues.

2. Training

If “sales” is the operative function, then also ensure that proper sales training takes place, as “sales” is a skill. Good looks and personality may open doors, but they don’t replace professional skills to identify customers, understand their needs, and close the business.

 

3. Set Goals

Even with good skills, goals are critical to ensure success. Top athletes will tell us that they are much more competitive with score-keeping. Therefore, it is important to establish specific goals into two criteria:

  1. New business booked
  2. Business consumed

Breaking it down into the two goals provides a balanced way to achieve the goals. If new business booked is not tracked, it is easy to fall behind in the consumed business goals.

Additionally, effective booking goals are based on specific targets such as food, beverage, and other revenues, or based on specific market segments. Revenue goals should match or exceed the budgeted goals. A rolling 12-month advanced sales report will assist in maximizing revenues and in identifying need periods.

  • OPERATIONS

Small hotels, in particular, tend to have limited staff. Therefore, it is typical to have one catering position with sales and operations functions combined. But, it is wise to analyze the pros and cons of having two positions vs. one position which have two responsibilities. Sometimes, a direct sales function can generate substantially more revenues than the cost of the two positions of sales and operations. But that analysis can only be done effectively if a strategic plan and specific goals and have been established.

Lastly, it is important to have a clear understanding of roles and responsibilities, regardless of the number of positions.

  • MARKETING

Once the position in the market place has been established, then all standards, operating and pricing philosophies are established. The quality and look of all collateral, web site, and in-house signage establishes an identity. Once that identity is in place, a plan should be devised and implemented to cost effectively reach the targeted markets. The marketing efforts will support the direct sales effort as well as reach other segments such as weddings and social functions cannot be solicited through direct sales. Demand from these segments is generated through targeted marketing programs and initiatives.

The Web is rapidly becoming the most cost effective means to reach potential customers, and is the great equalizer. High profile hotels, large, small, independent, or chain-affiliated hotels, all have the same opportunity on the Web when done with expert planning and implementation.

  • PRICING

Pricing is established based on the product offered and an understanding of the marketplace. Those responsible for booking business should have information on costs in order to negotiate. For example room rental could represent 75% profitability whereas, food could represent 33% profitability. The catering sales person will understand where discounting is less likely to impact profitability.

Knowledge of demand periods is key for negotiating effectively as well. Understanding these two elements places the catering person in a position of strength and confidence when dealing with customers, ensuring that the best financial interests of the hotel are met as well as inspiring customer confidence.

  • YIELD MANAGEMENT

As in rooms, each segment for catering sales has its own booking trend and demand period. Therefore, by understanding each segment’s patterns, the hotel can proactively establish selling guidelines to ensure that the space is sold effectively. For example, if wedding demand is high for weekends in June, it is important keep the space available for that lucrative business, rather than selling out to low rated business prematurely. Or if October is high demand for corporate meetings, monitor the selling of the space so that by capturing the natural demand, space is sold effectively. Booking a one-day group meeting on a Wednesday in peak periods would displace the potential revenues of a four-day meeting, which would be in high demand.

Additionally, it is critical to budget and forecast catering revenues on a daily basis, broken by meal period, and/or by market segments. Many times, owners and managers will project increases based on percentages, without looking on a daily basis. This can lead to faulty projections. For example, there could be greater revenue opportunities from weddings because of an additional weekend in June from the previous year. Or a mid-week holiday could decrease the corporate group business potential, compared to the previous year.

Even though there is software available for yield management, in my opinion, nothing replaces the good judgment of an experienced, competent professional.

A thorough understanding of where the business falls will lead to booking business which gives the highest return. And a proactive plan to generate business for low demand periods will create financial success.

Having an in-depth understanding of each component and how to successfully integrate each one into a strategic plan, ensures that the catering sales staff will cost effectively drive catering revenues, and impact profitability regardless of market conditions.

About the author:

In her more than 25 years as a marketing and sales pro in the hospitality industry, Brenda Fields has emerged as the “go to” consultant for independent and/or privately owned hotels and resorts seeking real-world solutions for today’s market challenges. From small boutique hotels to large convention properties, Brenda has created and             implemented highly successful marketing and yield management programs that enable owners to achieve target results despite market conditions.  Contact Brenda at brenda@fieldsandcompany.net, +518 789 0117, or visit her website at http://www.fieldsandcompany.net

 

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It’s 2007. Do You Know Where Your Sales People Are?

This past year proved to be another exceptional year in the hotel industry. The strong domestic economy coupled with record numbers of foreign travelers into the US, have impacted both the business and leisure segments, and all success indicators (occupancy, average rate, and RevPAR) are at record numbers in most urban markets.

Although there are good sales people in this economy, it seems that a property’s success has little to do with the quality and expertise of its sales people. More often than not, phone calls and emails to a property’s sales department are not responded to or are responded to a few days later. Contracts and proposals are not sent out on a timely basis, and many times the customer has to place several calls to get a contract. Where are the sales people? What are they doing that takes priority over the very minimal expectations of a sales person? It seems that in many cases, hotels are performing well despite service and product issues, and despite the poor work habits of the sales department.

So, when we know that the supply/demand dynamics can change and do change, then why be complacent with short term results and accept work habits that would not be acceptable in any other department? Entering the new year is a great time to leverage the strong economy and build your sales force from the ground up, by developing sales people with excellent sales skills, great responsiveness and follow up, and an organized and proactive sales approach. Why wait and spend valuable resources to turn business around, when you have everything in place now?

A few simple tips can help protect your investment as an owner and insure optimum performance as a manager.

Tip #1: Hire right.

It is unlikely that anyone would deliberately hire a person unqualified for the job or one who would be ineffective. But, by not understanding what makes a sales person effective, we can fall into traps of hiring poorly. Two key concepts are:

Sales is a SKILL, not a personality trait. How many times have we hired personable and attractive people only to find out that they are not effective in booking business?  We discover that tentative bookings rarely become definites and that any client complaint can send the sales person over the moon!

Skills are required in any other profession or in any other department in the hotel in order to perform the job. Many times, we look to hire a sales person from a prestigious property without considering his/her ability to sell. Does the sales person have the skills and proven track record of identifying new business and moving that business to his/her property? Client contacts can quickly come and go, but great sales skills result in constant business and on-going account relationships.

Expert sales skills can produce business despite product deficiencies, rate structures, or market conditions. Since most owners and operators do not have perfect properties, it is even more critical to ensure that each sales person is highly skilled to generate business and to deal with client objections and problems effectively. A dedication to expert sales skills is the best insurance for market share and profitability.

Administrative SKILLS are KEY to performance. The interview process provides invaluable information. It can indicate how professional, organized, and effective a potential sales person is and will be when working for your property. As well as evaluating the candidate on previous experience, evaluate how they handled the entire interview process. Was the person on time? Did he/she come prepared with a resume and well founded questions on your organization or property? Was there a well written and grammatically correct follow up note with your name spelled correctly and your correct title included? If these things did not happen with you, you can pretty much be assured that they will not happen with clients.

How many times have you bought something just because the sales person followed up? Follow up is not a sales skill. It is just good business practice. So evaluate the entire process and decide if the candidate is the one who will perform at a high level i.e. maintain a well qualified and quantified account base; trace accounts for follow up and maintenance; and communicate to existing and potential accounts/clients in a professional and timely manner.

Tip #2: Set up systems for results and accountability.

Goals and keeping score are important components to success. We all know that a golf game and a tennis match are much more interesting when we keep score; and we all perform better when our competitive juices are challenged.

Plan ahead by creating and implementing a well thought-out marketing plan. That is the basis for establishing sales goals. Sales accountability is important to ensure results. It is equally important to establish and maintain systems and procedures to monitor productivity of each sales person on on-going and consistent basis.

Therefore, to maximize the sales person’s performance, it is important to establish specific and meaningful goals, broken down on a monthly and weekly basis; and to establish a culture where the actual performance vs. goals is critical for job performance. Set goals which include activities to produce booked and consumed business (such as weekly sales call target, new accounts opened, and client entertainment goals) as well as booking and consumed rooms goals. On-going and consistent monitoring and evaluation will foster performance and will quickly help identify non-performers.

Tip#3: Stay the course!

How often do we hear that the sales person doesn’t have time to make sales calls? When pressed to explain why they don’t have time, they many times attribute it to dealing with operations, accounting, or guest service issues. But, consistent management and consistent expectations will help develop a sales culture, where sales calls is the priority; goals and expectations are well thought-out and quantified; and the achievement of goals is mandatory.

In small hotels, it is very tempting, due to a limited staff, to have sales people handle such issues. More often than not, they are very happy to so do, but again the outcome is that sales calls are not made, and eventually the property finds itself lagging behind its competitors. Without the proactive solicitation of new business, a property will find itself coming up short as supply/demand dynamics shift. And that can only be accomplished with consistency.

Therefore, as an owner and/or manager interested in protecting your investment and ensuring optimum performance, insure that the basics are in place in the hiring process, and that you create a sales culture of work habits and accountability which will produce the best results for your property(s). So start the new year with the commitment to know how to achieve and maintain a successful sales organization. With a few simple steps in place, you are well positioned for success regardless of market conditions.

This article is reprinted with the permission of its author and HotelExecutive.com and cannot be reprinted without the permission of its author.

About Fields and Company:

Fields and Company, founded by Brenda Fields, provides in-depth analyses and cost effective sales and marketing solutions to help owners and managers achieve their revenue goals. Systems and procedures are devised and implemented to monitor results and to ensure staff accountability, resulting in success despite market conditions. We work on individual projects or provide on-going involvement and expertise on a retained basis.

Contact Brenda Fields at brenda@fieldsandcompany.net or phone+1 518 789 0117 in the USA, http://www.fieldsandcompany.net.

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