by Shawna Suckow, CMP
• Navigating reduced planner commissions
• Tips for gains
The decision by Marriott (and subsequently Hilton and IHG) to reduce planner commissions was a huge disruptor in our industry. The commission model has been in place as long as I can remember, and now planners are scrambling to figure out how to deal with the fallout. This was a sudden and serious loss of income, leaving planners to figure out how to recoup their losses going forward.
What can planners do? Here are a few ways to make up for your lost revenue and even come out ahead:
Hey, your fee must be paid by someone, right? Why should you absorb the loss when you’re doing the same amount of work? There have been rumblings about hotels making this move for years, and the time has come. Assuming you’ve been an ethical planner and disclosed your commissions to your clients, they understand hotels have been paying a big chunk of your fees over the years. That era is coming to an end – we’d be naïve to think other hotels won’t follow suit in a year or two. While some hotels are still willing to pay commissions, I recommend educating your clients on which hotels are more costly because they’ve cut the percentage they pay you for your services. The client can then make an informed decision, knowing that Hotel Chain A costs their bottom line quite a bit more than Hotel Chain B.
Continue to source hotels that still value your business.
This presents an ethical dilemma, if you only source hotels willing to pay you a commission. To remain on the right side of ethics, disclose all scenarios and related pricing to your client. In my opinion, it’s OK to favor hotel chains that still value your partnership, as long as they’re not the only ones you’re sourcing, you’re still acting in the best interests of your client, and the client has all the information to make a fully informed decision in the end.
Brush up on your selling skills to gain new clients.
I know what some of you are thinking… ‘I’m as busy as can be – I can’t take on a new client to make up for lost revenue.’ If that’s the case, then revisit the other options herein. If you have the bandwidth for more business, then there are lots of opportunities in a robust economy like this. Polish up that website, make sure your social media presence a) exists, and b) shows off your expertise to potential clients (not just friends and family), and c) become a diligent connector in person and online. Shameless plug: this little association I founded called SPIN now offers an entire education track to help independent planners with business and selling skills. Go there! www.SpinPlanners.com.
Do you charge for sponsorship solicitation services?
Do you help your clients sell sponsorships for their events? I hope you are charging them for this value-added service! If you’re not handling sponsorships, offer to take this off your client’s plate. It’s a win-win-win for you, your client, and their event. Plus, if done correctly, you can add a new revenue stream to your business model.
Do you research promotional products for your clients?
I bet you do everything but place the actual order! I used to research ideas for my clients’ event giveaways and branded items, present the ideas to my clients, gather their order information and their logo, and then pass it along to another company who would simply place the order and pocket the profit. When I realized I could open a promotional products company to serve my event clients, the added profit for the work I was already doing was sizeable!
Did you know speakers offer an additional source of revenue for your programs?
Since I’ve been a professional speaker now for several years, I’ve learned a few things I wish I knew long ago.
Speakers are constantly in need of new video footage for their promo reels. If you have a beautiful stage, many of your breakout session speakers would pay good money to get fresh video of themselves speaking to a completely empty room when your meeting isn’t in session! Seriously. Offer this as an additional source of revenue to your clients, as an option to your speakers, and negotiate to keep a percentage for your extra work.
Many speakers would relish the opportunity to deliver an additional session to your audience. If you have speakers coming in for your event the night prior, and your event doesn’t start until noon, for example, why not utilize those speakers in the morning to provide some bonus sessions for an up-sell to your attendees? The speaker gets a percentage, your client gets a percentage, and so do you. You’ve likely got the space and the AV already reserved, so there’s no extra cost. Negotiate these bonus sessions with your speakers up-front.
It’s a challenging time to own your own meetings business, but you can get creative to ensure your income isn’t one of those challenges! There’s no need for your bottom line to take a hit because of a business decision made by a few huge corporations. We’re in the creativity business – what other ideas can you come up with to ensure your revenue grows in the future, in spite of decreased commissions? Add your voice, by sharing in the comments below.
Shawna Suckow, CMP, is the founder of SPIN: Senior Professionals Industry Network – the world’s largest association for hospitality planners and suppliers with 10+ years’ experience (www.SpinPlanners.com). Today, she speaks all over the world, helping planners orchestrate more engaging meetings, and helping hospitality suppliers understand how to market and sell more effectively to tough buyers.