Rate Management – generating revenue from the business you’ve already won

On the Cloverleaf Business Development blog this month we are talking money…

Well, making money…

Actually, how to make the most money out of the business you convert…

In a nutshell, we are looking at Rate Management.

I have recently started work on an exciting new project with training specialists First Class Learning and Development. First Class Learning and Development are the official training providers for the MIA (Meetings Industry Association) and they have employed my services to raise awareness of the Learning and Development programme that they are delivering for MIA members.

It was whilst I was reading up about the workshops on the programme that one in particular jumped out. The topic of Rate Management, and it occurred to me just how important this is to every organisation looking to improve their business development approach.

Many people see Business Development as the activity of finding new opportunities and converting them into sales. But any Business Development manager worth their salt will tell you that it is about so much more than that. The key is to look at those sales and see how else they can be developed in order to deliver further opportunities for the company.

Business Development is about maximising every revenue opportunity that comes your way.

Business Development professionals must consider how every customer booking can be managed to it’s full potential. For example, if a PA books a room in your hotel for their CEO – who is their CEO? What company are they running? Where are they based? Do they book accommodation often? Do they hold offsite meetings? Would they consider setting up a corporate rate with you? Is the CEO part of any business networks? Do they hold meetings? The list of questions is endless and they all need to be considered, because very rarely is a sale just a one-off. There are always other opportunities to be found – perhaps not tomorrow, next week or even next year – but they are there, and they all need to be taken into account when you are working on converting that original enquiry.

The programme for the MIA Rate Management workshop which caught my eye reads like a check list for how to be a good business development manager:

What is diary management, the components and benefits
The new world of selling & negotiating
– balancing the buyer’s power–some theory and tools
What stops us negotiating
– challenging those perceptions, blockers and creating enablers
–self-analysis and actions to take away
What is upselling, forms it takes, ways to deliver & benefits
– tips and tools to build confidence
Where to channel my energy to create more conversions
– theory on prioritising to ensure efficiency and effectiveness

(This might be a workshop for meeting venues but the points can be applied to any business – however, in the interests of keeping things simple, on this occasion I am going to stick with the meetings industry).

Let’s look at the headline points more closely.

Have you ever noticed how everyone always wants to book the same dates? It’s frustrating isn’t it? Managing your bookings diary carefully is the first hurdle in maximising your sales. What if you could persuade your clients to consider different dates? The quiet ones that you can never fill? How could you do this? Make them an offer they can’t refuse! Think about spacing your bookings out to avoid those inevitable business peaks and troughs, be aware of when they are in advance and think about how to avoid them.

Negotiation – now this is a scary one. I remember when I started out as an eager events coordinator with an empty meeting room to sell. I was so excited to receive an enquiry that I was too scared to risk losing it by trying to negotiate with my clients. However, I soon realised that negotiation is an important skill which has to be learned. I had to develop confidence in my product and in my ability to say no when faced with ridiculous requests for rock bottom rates. Think about the maximum revenue that you want to earn from that sale and the absolute minimum – once you know your parameters, you can comfortably play around with the rate and hopefully reach a happy medium with your client. And it’s not always about rate, perhaps you can add value rather than slash your day delegate rate? And when negotiating, don’t let your fear show – they will smell it a mile away!

I love upselling! Upselling is a business development dream! Think back to that PA booking for their boss – do they want an upgrade? Could you offer it on a complimentary basis (think about those opportunities for repeat bookings)? Would they like to book an evening meal? Will they be looking for regular accommodation? Would they like to arrange preferential rates based on regular bookings? There are so many upselling options to consider – make a list and add it to your enquiry form. You’ll be amazed at how many things you can think of.

Channelling your sales energy is so important to save yourself time. Thinking about those dates that sell themselves – can you leave them to do just that whilst you focus on some juicy packages to fill the quiet times? The festive season is always a good time to apply this tactic – December is a busy blur of parties and lunches and dinners – yet January is a barren month full of black holes in the events diary. Consider those companies who might benefit from a January party – retailers, other hospitality workers, emergency services – make them an offer they can’t refuse and you might just find that January isn’t looking so blue after all.

Managing every sales opportunity to generate maximum revenue should always be in the back of your mind. Just think about all the ways that this could be done and what you should be asking to make sure that it does. Keep asking yourself those same questions every single time you consider a booking, and after a while you will find that it becomes habit. And like any habit – once it is formed, it will be almost impossible to break!

For more information on the MIA Rate Management Workshop and the full MIA Learning and Development Academy programme click here > http://www.mia-uk.org/events/categories/learning-development

For information on First Class Learning and Development click here > www.firstclass-training.co.uk