Why use 40 AV vendors for your meetings?” asks Debi Scholar, CMM, CMP, founder and president of The Scholar Consulting Group. It’s the kind of question more companies are asking as they explore ways to leverage new areas of their total meeting spend.
Scholar is one of the industry’s pioneers in strategic meetings management, having spent 13 years at PricewaterhouseCoopers. She now has her own company, Scholar Consulting, which works with Fortune 1000 and mid-size companies on supply chain and expense management.
“Leveraging spend in areas like audiovisual, destination management, and food and beverage [outside the meeting venue] is the next step for SMM,” Scholar contends. “In our procurement world, we’ve found that you can get at least a 10 percent savings when costs are managed strategically.”
Meeting managers who have taken their sourcing beyond hotels and air transportation agree that it’s important to start with small goals that can be achieved and replicated. Ask yourself what you would do differently, and build on your experience as you approach different areas to strategically source.
As in any SMM initiative, communicating companywide is important. “Be prepared to do an internal PR campaign to get buy-in on all levels so you don’t have problems with utilization and uptake,” advises James Vachon, CMM, associate director, events, meetings and conventions (EMAC), at Millennium: The Takeda Oncology Co., based in Cambridge, Mass. Show how, for example, having a preferred AV partner will make people’s jobs easier and less time-consuming.
Communicate up, as well as across the company. “We were really in an advantageous position,” Vachon says, “because from the start we had the support of our CEO, who created my position and Colleen’s in 2009.” (Colleen Kenney, CMP, is also an associate director in the EMAC group at Millennium.)
Take It Step by Step
is never a one-size-fits-all—or even a linear—approach, and Milennium is proof. Only after strategically sourcing its meeting logistics and setting up preferred partnerships with AV and transportation companies is it moving toward sourcing hotels.
“When we started out in 2008, we didn’t have the data to strategically manage our hotel spend,” explains Vachon. “But now that we’re working with StarCite’s technology tool, we’re close to pulling the trigger.”
This approach to SMM has proven to be very effective for Millennium. “It was easy to feel discouraged at the beginning, when we’d hear from other planners that it would take years to get SMM fully implemented. But once we got the logistics partnerships, a process that took two years, the other things were easier to attack.”
As to the perception that SMM in general is just for “the big boys,” Vachon replies with a laugh: “Well, we’re not one of the big guys in the pharma world. Driving your business to a supplier for whom you are the biggest fish in the pond is a smart strategy regardless of how much or little your meeting spend is.”
Having a good meetings management technology tool to collect and analyze spend is even more critical when as you attempt to leverage multiple areas, Scholar notes. For enterprise-level data integration, Scholar uses business intelligence tools such as software solutions that extract data from meeting management technology, online booking tools, and enterprise resource-planning technology to create a “one-stop shop” of information. This allows her to send dynamic, visual dashboards so that her clients have real-time access to important metrics.
“It’s tremendously helpful, if not essential,” she says, “to get consistent,regular reporting and to have the tools to analyze that information.”
F&B is an area where companies can often realize significant cost savings, and Scholar offers an array of tips and strategies on her popular blog, T&E Plus (teplus.net). A first step is to identify your annual F&B spend and what percentage of your total meeting spend that accounts for. How does that compare to the industry average? Details such as which groups spend the most on F&B are also important, as is information on how many meals are actually used vs. how many are ordered.
This information-gathering will help determine how much of a rebate you can expect on your food and beverage spend. At press time, Scholar was planning a webinar on how companies can save money on business meals charged on corporate credit cards (including restaurant expenditures at meetings) by partnering with a vendor that provides a rebate program.
AV is Another
Audiovisual spend—at the enterprise level, not just services used at meetings—is another area to leverage. “Having fewer suppliers is almost always better,” says Scholar. “And as for the roadblock of exclusive providers at hotels, for the most part I’ve had a lot of luck negotiating this, especially if we’re using a hotel that is a preferred partner.”
Start by negotiating service-level agreements with the preferred AV suppliers. “If they don’t fulfill what they promise, you get a credit, and ultimately, more bang for your buck. For example, an SLA with an AV company may include a key performance indicator that provides the meeting host with a credit if they experience down time (of a certain length) when using an LCD projector. A credit would then be calculated by deducting a percentage of the total bill based on the agreed-upon terms.
One Company's Approach to DMCs
Approach to DMCs Sometimes, strategic sourcing of vendors beyond hotels and airlines is not necessary, which was what PricewaterhouseCoopers learned. The company went through a Six Sigma process from 2006 to 2008 as part of its continual evaluation of its SMM program, and today the evolution continues with the professional services firm exploring new areas of spend to strategically manage, according to Karin Milliman, CMM, meeting & event services strategy & implementation director.
Milliman says her team evaluated the cost/benefit of leveraging spend with DMCs but found that strategically sourcing them didn’t make sense. “We found that there weren’t many DMCs who had a presence in multiple cities, and since we don’t
use DMCs frequently, we didn’t have the purchasing volume that would make it worthwhile,” she says. “But it might make sense to revisit this
as more DMCs offer nationwide
As for ground transportation at meetings, “We typically do a master services agreement for transient ground providers. We have two national preferred vendors, and for meetings, we get a bid from them as well as from a local company.”
The RFP process can be time consuming, she says (see box). “A lot goes into the process internally, and you want to make sure it is worth the time and effort on the front end,” Milliman says. “You want to do your due diligence and conduct an RFP when the purchasing volume reaches a point that it makes sense for your organization.”
Prospective From the Buyer's Side
Ken Edwards, national account executive, SmartSource Rentals, says he “couldn’t agree more” on the value of extending SMM best practices to expenditures beyond hotels and air. “That’s my sell to clients,” he says. “Strategic partnership is what it’s all about.”
SmartSource Rentals began in 1985 as a computer rental company and has grown into the country’s largest information technology rental company, with 23 offices in the U.S. “We had the advantage of working relationships with companies from the inside so it was not difficult to help them with off-site meetings,” says Edwards.
He says it’s essential for companies sending out RFPs to accurately represent their spend. Further, while being able to lock in rates is an important part of strategic sourcing, it’s not everything.“Relationships save money,” he says. “We’re not like Staples where we’re selling you x-number of staplers.”
That’s a sentiment echoed by Andrea Michaels, president and owner of Extraordinary Events, a San Francisco-based full-service event management/production company whose client list ranges from BMW to Mary Kay to Samsung Electronics.
“Preferred partner status and multiyear can be smart,” Michaels says, “not just from the cost savings that can result but from the value of working with a company that really understands and knows your business inside and out.”
She questions, however, whether “it’s good to leverage multiyear spend with a company whose primary service is not an extension of your brand.” In other words, “leveraging only money” doesn’t make sense if at the end of the day the experience or service provided doesn’t help (or potentially even harms) your brand.
“For us,” she says, “providing value starts with creativity, customization, and trust.”