Moment of OpportunityBending inflexible policies to gain the upper hand. By Chase LeBlanc
BCM ASKS …
“I’m a catering manager at a large convention hotel. I recently lost a huge piece of business—a corporate group that was planning to hold a week of meetings here—because they wanted us to drop all service charges associated with coffee and tea for breaks and meals. My property charges more than $100 a gallon for coffee and tea, and my manager says both the price and service charges are non-negotiable. He says, “We have to make our money back in this economy.”
As a result of this inflexible policy, we lost the business to a nearby competitor, who, I’ve been told by a friend who works there, relaxed their coffee pricing and service fees to secure the booking. In addition to my hotel losing several thousand dollars in revenue, the lost business has hurt my personal bottom line as far as bonuses go. We also may have developed a reputation as a price gouger and damaged future group booking opportunities. What can I tell my manager that would convince him it’s bad business in 2011 to ignore client demands on pricing?”
THE STAFFING DOCTOR ANSWERS …
Sounds like your SOP (standard operating procedure) ran into re-al-i-ty. Forces within an organization often favor promoting “the way we do things around here,” and market forces from the outside constantly demand fluidity and flexibility.
The cultural advent of auction-based web sites, high-profile outfits with their lowest-price-point positioning, and the economy being in the doldrums have produced an almost inescapable “über shopping” mentality for better deals.
The U.S. military uses a rather nifty device called an “After Action Review,” where the participants compare “the plan” of strategy/tactics to what actually happened and the consequences of decisions made under fire. This knowledge is then reviewed by those who may face the same type of scenarios as a methodology to produce continuous, real-time improvements within the “thinking and action” systems.
There may be a value for you to implement something like this after each event at your property, but more to the point, you might want to cull the best ideas after each event bid or RFP for future use. You need a little groupthink on this one. Poll industry peers or jump into a like-minded chat string and discover for yourself the new realities. How have properties similar to yours addressed the changes in the marketplace? What enticements draw in new business and keep the old?
The art of negotiation is found in your ability to evaluate the priorities of the folks on the other side of the table. They will want many things, but rarely does one side get all it’s after. Your objective is to give up the least painful parts in order to gain the most positive parts from your point of view. To do that, you must decipher what your counterpart’s weighted values are on those same items. In your case, for all you know, the folks on the other side may have been given the mandate, “Whatever you do, don’t come back here with any service charges associated with coffee or tea,” and were released from any other constraints.
Perhaps they had movement available elsewhere in the contract. Maybe you could have secured the event if you gave in on the service charges in exchange for a signed agreement (with a favorable deposit) for their next meeting. Their boss and your boss might have deemed that a workable deal.
There is also one crazy-like-a-fox-idea: Compete with yourself. Concede the coffee/tea service charges in exchange for “full boat” (you charge them back) on all sales at, for example, your “NRG Recharge Station,” where you offer fresh fruit smoothies, top-of-the-line energy bars, drinks, etc. If you match your “better choice” offerings with the interests of the attendees, you might have a win-win on your hands. The other party gets to proclaim what hardnosed bargainers they were, while you imprint a memorable experience on future guests and come out with more money in your pocket.
Chase LeBlanc is the founder and CEO of Leadagers, LLC, and is a hospitality management performance coach with more than 25 years of experience in the industry. He is also the author of High Impact Hospitality: Upgrade Your Purpose, Performance and Profits!