Four Steps to Boosting Hotel Group Sales
The fact of the matter is a downturn in group sales is the cause of our industry's greatest pain. It's a hard truth all hotels have had to face: group sales are in a tailspin. Massive numbers of meeting rooms, crucial to generating room nights in some of the largest and most marquee properties in our industry, sit empty. According to a recent study conducted by Smith Travel Research, group occupancy performance dropped more than 18 percent in 2009, with between five and seven million fewer rooms sold during every month.
Hotel sales teams are hurting for new business, and theyre desperate to stop the drop in revenue and increase future bookings. Yet the focus is often put almost entirely on re-booking old business. Proactive sales activities becomes an ongoing chore of responding to low probability leads that are mass distributed to dozens of hotels from traditional lead sources or trolling meetings management tools to re-call old clients. What sales people should be doing is finding new business by contacting high probability sales leads with a methodical and repeatable process. Hotel sales teams need to embrace proactive sales activities and create a culture of professional business development, like most other industries have done.
What do I mean by a culture of professional business development? We mean a systematic, measurable and repeatable process to generate group bookings. It doesn't mean waiting for the phone to ring. It means picking up the phone and calling the right meeting planner with the correct sales pitch. It doesn't mean counting on past bookings to fill your hotel and generate your RevPAR. It means creating systematic, measurable and repeatable processes that can be counted on to drive group room nights, even in a weak or recovering economy.
Professional B-to-B (business-to-business) business development occurs every day in all kinds of businesses. Sales managers are required to actively schedule and contact prospects. They are given high probability sales leads based on past purchasing activity and empowered with competitive value propositions and great sales training. Their activity is tracked in customer relationship management (CRM) or sales force automation (SFA) tools so managers can quickly spot problems and tweak productivity. This allows for the generation of a reliable, measurable and repeatable sales funnel.
From a macro point of view, true professional business development can be broken down into four simple steps. Within these steps a universe of strategies and plans can be developed for each unique hotel and property. Obviously, the strategies for a 1,500-room resort hotel are going to be vastly different than for a limited-service airport property. But they all require the same basic methodology and tools.
When repeated over time, this four-step process can dramatically increase group sales for any hotel or conference center:
1. Determine your universe of potential business. Business development starts by identifying all your potential clients. Know your audience. For the hotel group sales business, this means starting with a list of every organization with group booking needs. Advanced lead databases provide event history and detailed profiles of organizations, associations, corporations and other groups. These tools contain information on more than 300,000 groups that have held more than two million events at hotels across the nation and the world. With smart targeting technology, hotel sales teams can pursue only groups that are best suited to their properties. By narrowing the field to the most high-probability leads, you get the most out of every phone call your sales team makes.
2. Develop your strategy. Once you know who are your potential clients, you can begin to develop strategies on how best to attack that universe. Plot your course wisely. Decide on what pieces of business you want to go after, when and what your sales pitch will be. Before you can implement your sales campaigns, you must study your leads to determine which are the most valuable or viable and how best to approach and interest them in your property.
The quickest and easiest way to go about this is with an advanced lead generation tool that includes detailed profiles and booking histories of each group. With this crucial information, sales pitches become easy. Don't convince a group they want what your hotel has. Instead, show them your hotel has what they want.
Before executing a strategy, a hotel director of sales must decide on the logistics of the sales plan:
Who will do what?
Will some people contact different types of leads?
Do you assign your best salesperson to contact the most profitable businesses?
How can you best leverage your junior people?
Ensuring your sales plan is well thought out will help ensure that it is well executed. Using true SFA and meetings management tools to develop the entire sales plan from start to finish will yield maximum productivity. Campaigns can be automatically configured to auto-assign leads to selected managers based on easily defined criteria. Designate a starting and ending date, as well as expected response and revenue so your sales team has quantified goals to drive their efforts.
3. Execute. After developing the perfect strategy for going after those customized leads, sales teams must execute the strategy with purpose and precision. Mangers need to be able to organize their leads and contact information for quick and easy access, keep an accurate and up-to-date record of where they are with each client and know what they need to do next. They must have the ability to set up event specifications and create and send intricate proposals and contracts. Most importantly, they need a way to do all this and more with a tool that is organized and engaging.
True SFA tools let hotel sales teams quickly and efficiently get down to business. After an account has been assigned to a sales manager, he or she can track communications, schedule site visits, record opportunities and improve client relationships. Once these leads have turned into meeting opportunities, managers can input room block information, diagram functions and generate proposals, contracts, BEOs and more.
With all the work that proactive sales entails, sometimes important tasks can fall by the wayside. Instead of losing out on all the new group business that can be reached, often it works well to augment a hotel sales team with outside professionals trained in hospitality cold calling. Consider outsourcing your cold calling efforts to a professional telesales team that can focus entirely on tracking event planners, setting up appointments and site visits and booking new group business. This way, no new business opportunities have to be pushed aside.
4. Evaluate and adjust. As sales teams execute strategies and campaigns, sales directors need to be able to manage and evaluate their efforts as well as forecast for the future. For this they need reports with statistics and benchmarking details. They need to know what's being done and whether it is working. Things like:
How many calls are being made?
How many proposals and contracts are going out the door, and how many are coming back in?
Are you consistently losing certain types of business and if so, why?
Who on your team is succeeding and who is struggling?
Having access to this type of data will ensure sales teams are provided with a clear picture of how successful their efforts have been and if any adjustments need to be made.
SFA and meetings management tools make keeping track of sales team's ongoing efforts easy. They allow you to quickly see what has been done and what needs to be done, by whom and when. Switch between properties to find out what's scheduled for each of your hotels or drill down to see activity for a particular sales manager, event or meeting. These tools are extremely helpful in letting you see the entire sales process as it happens, offering you the opportunity to make both minor and major adjustments to your plan in real time. Its also important for your management tool to have a powerful, yet easy-to-use report builder so you can analyze and compare results based on criteria you set.
Today's modern hotel business also requires powerful and accurate forecasting tools that allow you to successfully predict bookings based on the proactive outbound sales activity of your team. These types of solutions will allow your sales teams to see how many calls it takes to set a site visit, how many site visits lead to proposals, how many proposals lead to contracts and how many contracts result in bookings. When you can follow your sales team's efforts in real time, it makes forecasting for the future easier and more accurate.
Don't expect new group business to simply come calling on your hotel. Instead, take a proactive approach. Target new groups that are particularly suited to your property. Develop your business in a systematic and sustainable way. Youll be amazed at the boost it brings to your group sales profits.
Michael K. McKean is the CEO and director of new product development for The Knowland Group, a leading provider of business development solutions for the global hospitality industry. For more information, visit www.knowlandgroup.com.
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