Hotel Sales Incentive Plans: Friend or Foe?

By Brenda Fields Founder, Fields & Company | May 19, 2010

Ensuring that the sales team is highly motivated and productive is an ongoing process, regardless of the size or type of property. There are many ways to ensure success, one of which is incentive plans. But, to achieve the desired results, it is important to know that when it comes to incentive plans, one size does not fit all. Effective incentive plans take on many shapes and sizes, depending on the needs of the property and the business mix of the property. And as a note, an incentive plan does not replace skilled sales managers working in an organized, professional, and strategic manner. It should be the icing on the cake to ensure that good sales people are going the extra distance and have added motivation to prospect, overcome customer objections, and effectively handle product or service deficiencies.

This article addresses key components to consider in customizing an effective plan which motivates and rewards the sales manager and/or sales team and at the same time, produces the optimal financial results for the property.

Key Points to Consider and Questions to Address:

A hotel room is a perishable product

Unlike other products, a hotel room has a very short shelf life. What we don't sell today is forever gone. Conversely, if demand exceeds our inventory, we cannot produce more rooms to sell. Therefore, the key is to sell effectively on a daily basis. Another factor is that hotel rooms have varying values depending on demand patterns. The same room can sell for widely different rates depending on the day of week and season. Selling rooms in peak season usually is a function of "taking orders" rather than excellent sales skills, which is required in persuading a group to book your property over another one in a buyer's market.

An effective plan is one which motivates and rewards the individual and or sales team for great achievement and at the same time, produces the best financial results for the hotel. Rewarding a team to book business which actually displaces revenues happens when a basic understanding of your business goals has not taken place or the strategic plan was not well founded. So, before going forward with a plan, it is important to assess the following for your hotel.

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Guest Service: Empowering People

Excellent customer service is vitally important in all businesses but it is especially important for hotels where customer service is the lifeblood of the business. Outstanding customer service is essential in creating new customers, retaining existing customers, and cultivating referrals for future customers. Employees who meet and exceed guest expectations are critical to a hotel's success, and it begins with the hiring process. It is imperative for HR personnel to screen for and hire people who inherently possess customer-friendly traits - empathy, warmth and conscientiousness - which allow them to serve guests naturally and authentically. Trait-based hiring means considering more than just a candidate's technical skills and background; it means looking for and selecting employees who naturally desire to take care of people, who derive satisfaction and pleasure from fulfilling guests' needs, and who don't consider customer service to be a chore. Without the presence of these specific traits and attributes, it is difficult for an employee to provide genuine hospitality. Once that kind of employee has been hired, it is necessary to empower them. Some forward-thinking hotels empower their employees to proactively fix customer problems without having to wait for management approval. This employee empowerment—the permission to be creative, and even having the authority to spend money on a customer's behalf - is a resourceful way to resolve guest problems quickly and efficiently. When management places their faith in an employee's good judgment, it inspires a sense of trust and provides a sense of higher purpose beyond a simple paycheck. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.