When Michael H. Paige, director, meeting and convention operations, Parke-Davis, Morris Plains, NJ, decided to outsource meeting services he took an unusual tack. "I wanted them in-house," he says, "so I could have hands-on control." After a six month selection process, Paige contracted with McGettigan Partners in Philadelphia to set up an office on site at Parke-Davis. He was a pioneer, bringing McGettigan in three years ago. Other pharmaceutical companies are following suit. SmithKline Beecham brought McGettigan on site last June, and Wyeth-Ayerst is considering the prospect. "Within the last three years, on-site vendor offices have become pretty popular," observes Michael Malinchok, McGettigan account executive, who works on-site at SmithKline Beecham.
The relationship is often the next step following meeting consolidation, a process whereby a central department tracks the whole corporation's meeting costs, sites, and schedules, ensuring that the company maximizes its negotiating clout and produces high-quality meetings. (See sidebar, page 28.) An on-site vendor adds to the benefits of consolidation, providing dedicated staff who combine their meeting management expertise with an intimate knowledge of their client's corporate culture. With that knowledge, on-site staff can provide truly customized service and develop solid relationships with internal planners. And they are on the scene to handle any problems. That's why Paige chose to set up an on-site vendor office. "I wanted to be a major player in the company, so that when I asked them to do something, they did it," he says. "I'm not worried about what meetings Ford Motor Company is putting on. I'm only worried about Parke-Davis."
How It Works Under the McGettigan/Parke-Davis, Parke-Davis guarantees McGettigan a certain dollar amount of business, and in turn receives a preferred rate from McGettigan, software management, and full-time staff on site and at McGettigan's Philadelphia headquarters.
Establishing an on-site vendor doesn't mean losing control of meeting planning. It means developing a collaboration that best uses everyone's expertise. Paige runs a seven-person staff--three McGettigan people and four Parke-Davis planners, with all company meetings funneled through his department. McGettigan handles the operations side of meetings, says Paige, while Parke-Davis people manage the strategic aspects. Paige believes it is crucial to keep Parke-Davis planners involved, to maintain their expertise and contacts, and to ensure that meetings keep their creative edge. "A Parke-Davis person has an intrinsic interest in making things different, exciting, motivational," he says. "We let them lead with the content."
Even with the on-site office, McGettigan is not Parke-Davis's only meeting management vendor, although it is the primary one, handling 200 to 300 meetings a year. Paige bids out meetings to other vendors "to maintain quality and creativity."
Buying Power Parke-Davis spends $30 million to $50 million annually on meetings. The on-site relationship with McGettigan has resulted in savings averaging between 18 and 30 percent--that's at least $5.4 million, and as much as $15 million. Meeting management costs alone have been cut by about half since Paige centralized meeting management, he says, "to say nothing about everything from the way a BEO [banquet event order] is done to what you save using regular versus stretch limos. Everyone focuses on the management fee, but that is only about 15 to 20 percent of a meeting's cost. Where you save significantly is on themed events, air, ground transport, and hotel
Those savings are monitored with McGettigan's software program, CORE (Consolidated Operating and Reporting Environment) Discovery(tm), which tracks meeting costs by segments, such as hotel and air. It can also segment by chain, so the company can see exactly how much business it is throwing Hilton, for example, and use that as a bargaining tool.
That, of course, presupposes having a lot of volume with chain hotels. Before meetings were centralized at Parke-Davis, each department handled its own meetings, with department heads, administrative assistants, or secretaries doing the planning, says Elaine Weise, client business manager with McGettigan, and head of Parke-Davis's on-site office since its inception. Those planners undercut their own leverage, because "they chose independent or boutique hotels and stayed away from chains," explains Weise. "We showed them that if they stayed with chain hotels and combined McGettigan's buying power with Parke-Davis's buying power, there would be more leverage in room rates, and food and beverage."
Miscellaneous costs are also cut, Weise points out. "If you need a chandelier removed at a hotel ballroom, that could be $2,500 to $5,000. Most of the time, we are able to get those fees waived because of the amount of business we bring that property. Therein lies the beauty of combining leverage. What we couldn't negotiate for Parke-Davis alone, McGettigan can, because we have $100 million worth of business coming in through the back door." That clout also assures better service, Weise says, "and service is what makes or breaks a meeting."
Personalized Service When he set up the on-site relationship, Paige made sure McGettigan customized everything from its CORE Discovery software program to job responsibilities to meeting pricing. In fact, Weise discovered that she had to change 90 percent of the way she did business. "It's almost like a marriage," she reflects. "You think you really know that person, then you get married and live with them and find out things you didn't know because you weren't in that intimate relationship."
For example, Weise changed staffing policy to meet Parke-Davis's needs.
Usually, she would bring in additional McGettigan staffers--whomever was available--close to the meeting date. Not an option with Parke-Davis. After trying all the McGettigan staffers, the company's internal planners created a preferred list and Weise books those people as soon as she knows about a meeting. In addition, to meet the specific needs of pharmaceutical clients, McGettigan hired aexpert at its headquarters.
On-site vendors give their clients' complaints top-priority status. "Instead of the client having to call up and scream and yell that one of the doctors was not treated correctly and wait for the [account executive] to call back, the client can walk in and tell me," says Weise. "They know I'm here for one thing--to fix their problem."
Getting Nervous? Top management's support is crucial for the success of any consolidation and on-site vendor program, Paige says. Even so, internal planners' fears run high. Initially, planners saw Weise as a threat to their jobs. "Understandably," she says, when a company brings in an outside vendor and "plops them down in the middle of a department, you see everyone get nervous." She had to prove she was there to help-- not replace--them. "There's no way a company like McGettigan or anyone else can walk in and usurp those responsibilities," she says. "We need the client. Without the client there is no us."
Being on site helps vendors build trust. "I didn't show up once a month, but every single day," says Weise. "I'd walk the halls." Her insider's knowledge makes for an efficient partnership. "When you're there eight to ten hours a day," she says, "you find out the protocol, the politics, who likes to be stroked, who doesn't."
That familiarity helps ensure meeting management consistency. "It's much easier for [employees] to call us rather thanto other companies," says Malinchok. The on-site vendor can then get information flowing among the client's corporate entities. "I got a call yesterday from an internal client looking for a unique destination. She was inviting some pretty key execs and didn't want to risk an unproved place," he says. "I told her, this other division used this property. Those two got together and talked."
But what about employees who enjoy planning meetings? "It's very difficult wresting that away from product or sales managers," acknowledges Paige. "There are obvious benefits to being the decision makers." Weise keeps those people involved. "You lay out suggestions, guide them to the best options, so they don't feel like they've lost control," she says.
When an on-site vendor demonstrates a track record, and internal planners see that the staff is there to assist them, not replace them, the initial nervousness disappears. Even those who have fun planning meetings let go after trying Paige's department. "Once they identify the difference in quality and cost control, they don't go back," Paige says. "One of our vice presidents said, 'You run a managed meeting. We were accustomed to gatherings.'" And that, concludes Paige, says it all.