Yesterday in Business is Better, Closing In On Good, But Not Great “http://www.securemploy.com/blog/2010/04/07/business-is-better-closing-in-on-good-but-not-great/” I indicated that most companies we have talked to did slightly better than planned for the first quarter. Some felt they were overly conservative in their projections. Others felt they didn’t get as big a “share” as they wanted. Etc. Bottom line: many companies are not as happy about first quarter as they should be. Congratulate yourself if you achieved NOP!
Innovative Thinking for Second Quarter.
Had a delightful conversation with a progressive thinking VP Sales & Marketing early this week. He really got me thinking. I asked if I could share his ideas. He agreed.
He introduced me to:
Zero Based Marketing & Sales Projections Increase Revenues 11%
All of us are familiar with Zero Based budgeting that was all the rage a few years ago. (Incidentally, a number of progressive management companies are still using the concept and seem to be beating the industry profit averages by 5-7% every year.)
This VP sits down with sales teams at each hotel, every quarter. They analyze all the booked business. What has been booked. At what rate. What additional services/products were added to the sale. What F&B is included. Then they go through a check list of 97 things they can offer to any group or guest to identify what they did not sell. Now they re-analyze each piece of business to identify how to get additional revenue from the group.
They have been doing this for 9 months. On average they have increased revenue from existing bookings by 11%.
The VP takes this a step farther. Before each sales call the sales person studies the list of 97 items that can be sold and charged. Which will benefit this group or corporate account the most. They look at what will provide the most benefit to the customer. Not what will give the hotel the greatest profit margin. This VP understands the key to sustained long-term profits is to keep all the accounts. VP knows that only happens if you meet the clients needs first.
Can It Really Be This Simple?
VP Sales and Marketing said they learned early that they always left money on the table. Sales people are trained to close the sale. It’s tough to be in the middle of that process and remember everything you can sell. By analyzing what was missed, from the customers perspective, they can go back to the customer and help the customer better meet their needs.
I asked if the customer always “traded up.” The answer? “Almost always, but typically at a fraction of what we suggest.” It’s easy to identify ways a customer can significantly increase their results by spending 20% more. That’s rarely in the budget. “Customers always appreciate our suggestions, even when they don’t use them. They appreciate our thinking about their business. By concentrating on how our suggestions will benefit them, they “get” that we are not just trying to re-negotiate the deal.
Sweetening the deal.
Once in a while, the customer just can’t add anything. Before we make our suggestions the sales team at the property has identified 1-2 things they would be willing to “throw into the existing deal” to improve things for the customer. These customers are blown away by our offer. It stops them cold if they were thinking we were just trying to renegotiate after the deal was signed.
The Best Part-90% Re-bookings.
That’s right. This company has re-booked 90% of the business that has been exposed to the above. “Customer loyalty is the name of the game for any business. I always remind our teams that it’s easier to get additional dollars from existing customers than to find new customers. We all know it. In our zeal for additional business, I found we were pushing our sales teams so hard they were not giving our existing customers the attention they deserved.”
