Group Business: Creating A Winning Sales Team in Any Economy
By Robert Post CEO, Knowland | December 08, 2019
Hotels were easy victims in the last recession, chasing occupancy from OTA's for transient business at commodity level rates. Has that business ever recovered? Not really. Direct transient business, not related to loyalty programs or business transient travel, is relatively insignificant today. Faced with potential market uncertainty in 2020, responsible hoteliers should be asking "How can I avoid margin squeeze and group business commoditization of the 'CVENT vise' in a weakening market?"
The good news is we do not have to be victims to the economy or the crush of the CVENT RFP machine. Hoteliers can take control as proactive sellers and relationship builders, making inbound RFP responses a secondary source of new business. Hotels being pinched by services like CVENT for inbound RFP's are giving up control of their booking pace, customer relationships, and ultimately higher margin group business.
Understand Your Sales Process
Get back to the basics of Sales. Don't make assumptions. Ask the questions that verify the sales team strategy is aligned with business goals. Below are a few questions you should be asking your group sales team:
- What is the source of business? Not the market segment but how the business was acquired and what it costs to acquire it.
- How is repeat business defined? This one is important. Just because a group has been at your hotel before, it doesn't make it repeat business. If the source of business each time is a third party, then it's not repeat business. It's an inbound lead that happened to stay there before.
- Are prospecting efforts centered around new business and capturing more share of repeat business? You might be surprised to discover your sales team considers responding to inbound leads as prospecting.
- How accurate is forecasting? Can the team accurately predict 90 days out, 180 days out, etc. This is an excellent indicator of their effectiveness in proactive selling and building an accurate, predictable sales funnel.
- How are leads prioritized? Directly sourced opportunities trump RFP responses. And profitability over speed should be your metric.
- Are sales teams incented consistent with strategy? Make sure your team is being rewarded for the behavior you want.
Ultimately, your sales team should choose quality over quantity. Not all business is a fit for your hotel and trying to force fit a piece of business, simply because the RFP went to your inbox, is not a strategy for hotel profitability.