How is Negotiating with Corporate Procurement Different than Event Planners
Businesses are increasingly relying on events to drive awareness and sales. For every group deal a hotel closes, the client fully expects to recoup their investment. But most planners don’t look at events so transactionally. They see their budget as a ceiling, and they do whatever possible to create memorable experiences that meet their event’s goals within that budget. So who sets the budget? Typically it falls on corporate procurement departments. They have the final say on venues, approved amenities, and influence the overall events calendar.
As event revenue grows for businesses, so too will involvement from corporate procurement. That means adapting your sales strategy to reach a more fiscally minded person.
Quantity vs. Quality
Planners need to be sold on the venue as an experience. That’s why site visits can be a make-or-break moment. Event and meeting coordinators like to be walked through the event experience, room to room. That way they can see their ideas come to life, right in the space in front of them. This is where you need to equip your team with interactive diagrams and examples from past clients. Planners are looking to make their vision come to life so they just want to know that their ideas are possible in your space.
Planners aren’t afraid of SPENDING money, but they are afraid to WASTE it.
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Corporate procurement folks on the other hand, are all about hard numbers: costs and ROI. The best way to prepare any negotiation with procurement is to make sure that each concession and amenity that you offer is gauged by an exact cost. Quantify every line item. Planners might understand why complimentary guest wifi, free transportation or A/V support can help them create a more impactful event. But procurement specialists need to know exactly how much money they’re saving. Try to include a dollar amount alongside every offer.
Quantify every line item.
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Dealing directly with procurement specialists can set up properties with more opportunity for upsells or longer term contracts. With corporate events, it’s less likely that a dedicated meeting planner or event coordinator has signing power on a long term deal, but procurement does. What’s more, they’ll be more receptive to negotiating multi-year deals for recurring events. If you can’t help a client prove ROI on a single event, show them how they might recoup their investment by year two or three.
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Bridging the Divide
What’s the worst kept secrets in meeting and event production? Planners and procurement don’t get along, especially now that corporate procurement is getting more involved in events. Planners work tirelessly to execute the goals of their event, even before a venue has been booked. With all that effort and time investment, it can be hard leaving the decision-making and negotiation process up to someone else entirely.
What’s the worst kept secret in meetings and events? Planners and procurement don’t get along.
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They’re both on the same team, but there’s undoubtedly some level of resentment between planners and procurement. Planners like to stick to what they know works, and often they stick to relationships with their most trusted suppliers. However, it’s up to procurement to steer planners towards more fiscally responsible decision making, or at the very least make them aware of more competitive options.
This is where sales reps at the property have the opportunity to deliver for both sides. At the end of the day, both planners and procurement are striving for the same goals. Find ways to help each side talk to the other. For example, if you’re talking to someone in procurement that’s switching suppliers after a long-term contract, be sure to ask what criteria made their events successful in the past.The first step is to convince procurement that you can meet their goals by streamlining coordination and planning. Then, help them teach planners how your property meets the criteria to which they’re accustomed.
Ask what criteria made their events successful in the past.
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Regardless of which side you’re dealing with, you may find yourself in a situation where it helps to bring the other into the fold. How do your rates compare to your competitive set? If you’re competitive, the procurement specialists are your internal champions. However, if your goal is to sell a totally unique experience at a premium, find a way to help planners prove ROI. This is where data can be your best friend. Beyond having clear contracts that attribute a dollar value to every line item, use the metrics available to you to demonstrate the success of past events.
For the time being, the wind is in the sails of properties. Properties have a leg up and ultimately more leverage to negotiate. But building lasting relationships is about more than negotiating a transaction. To turn planners into advocates, modern sales reps can start by equipping them with the right knowledge and event technology. Click here to download our latest free guide where we dive into 10 ways to do just that.
The post What’s the Role of Procurement in Corporate Planning? Here’s What Hotel Sales Managers Don’t Know About the Procurement Process appeared first on The Social Tables Blog.
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