Fostering Great Supplier Relationships

By Mark Rowh

Planners need suppliers. Vendors need business from planners. But is mutual dependence enough to make for solid relationships?

In answering such a question, a study by the Incentive Research Foundation may be revealing. Results of the study, announced in November, were based on a survey of 126 hotel sales representatives and 160 meeting and incentive travel planners about the present state of the hotelier-planner relationship.

On the plus side, the majority of both planners and hoteliers indicated they viewed their relationship with the other party as either collaborative or supportive. But at the same time, depending on the hotel role in question (national sales, property sales, or convention services manager) just 11 to 22 percent of planners rated the relationship as one of full trust or friendship.

“Without our vendors, we cannot be of service to our clients,” she says. “We cannot be masters of all tasks so it is essential for strategic planners to have a network of trusted partners with whom they work.”
— Christy Lamagna, CMP, CMM, CTSM

The study identified several other challenges, with rising costs and space/date availability seen as particularly pressing issues, along with the eRFP process. Another concern was the increasingly transactional and technological nature of these relationships.

So how can planners make the most of relationships with suppliers? Christy Lamagna, founder of New Jersey-based Strategic Meetings & Events, says an important first step is to recognize just how important vendors are to successful meetings.

“Without our vendors, we cannot be of service to our clients,” she says. “We cannot be masters of all tasks so it is essential for strategic planners to have a network of trusted partners with whom they work.”

Treat With Respect

In fact vendors should be extensions of your team, she argues.

“They are the backbone on which your business functions and should be treated with tremendous respect,” she says. How someone treats their vendors is usually indicative of how they treat employees, she adds. If employees are unhappy that shows in their work product or in potential turnover mid-program.

For the optimum working relationship, suppliers need to demonstrate that they share your values and work ethic and echo your work style, Lamagna notes. Once that has been established, consistently professional treatment should go both ways.

“By channeling all appropriate spend to vetted vendors you can leverage spend, receive preferred treatment and deliver more to your clients while simultaneously bringing them business,” she says. “In return for their service, their invoices should be paid within 14 days of receipt.”

Lamagna recalls an incident that taught her an early lesson in how exceptional treatment can lead to productive long-term relationships. In her first communication with The Westin St. Francis in San Francisco, she was faced with the daunting task of explaining that a staff member had bought out their hotel by mistake due to a catastrophic math error. In fact the same mistake had been made with a total of four hotels, and 18,000 room nights had been booked instead of 1,800.

“I had to reverse-engineer contracts with multiple hotels,” she says, but three of the four hotels held the company to the contract as signed.”

The St. Francis representative told her that he felt terrible for the situation she was put in and then brainstormed on ways to create a win-win.

“That by far is the best customer service I have ever received, and that happened 17 years ago,” she says. “To this day I tell that story and work with him whenever I can.”

Even if relationships are not warm and fuzzy, it’s important to keep them on the positive side, according to Greg Palomino, CMP, CSEP, CEO of CRE8AD8 Event & Travel Management in San Antonio, Texas.

“Building and retaining relationships with vendors is like keeping in touch with family or your boss,” he says. “You may not always need or want to talk to them, but when you need them, they’ll be there. And the more you keep in touch, the less awkward it will feel asking for help or discounts.”

Palomino says while vendors realize they’re on the sales side of events, they appreciate being treated as more than just suppliers.

“They know you need them, and they want to sell you something, but treating them as such will never get you in good graces for the cool, new, trendy and available concessions if you can’t be friendly and approachable,” he says. “Spending time with your vendors, getting to know them and treating them like part of the team is important,” he says. He notes that keeping vendors in your social media loop is a good way to keep in touch without spending the time to talk with them frequently.

“You’d be surprised how many of our vendors we may only talk with once every quarter, but they know about my life, kids and hobbies,” Palomino says.

Of course not every partnership experience can be positive, but even less successful experiences may inform future operations, especially when there are multiple options from which to choose.

Communication Is Key

“The benefit of us as an event management company is that we’ve produced so many events that we’ve weeded out the vendors that are just not a good fit for us or our clients,” Palomino says. He finds prompt communication a must. If it takes more than a day to connect with a vendor, other than during a holiday period, he feels that the vendor is not a good choice for his firm.

“If they’re too busy for us, then they’re never going to get us answers for our client in a timely manner either,” he says.

Keeping an open mind is also well-advised, Palomino says. “Be friendly and be open to ideas, because the majority of the time, you don’t know what’s out there and what it costs,” he says. “Be open to paying more for things you want and cut things that don’t make sense.”

Barbara Myers, CAE, is CEO at Arlington, Virginia-based IMN Solutions, and works with clients in the insurance and financial industries. She says it pays to discuss your vision of the relationship.

“Outsourced relationships that are the most successful are ones where the provider is an integral part of your in-house team,” she says. “Be candid and establish open lines of communication, be clear about your expectations and share details of the project’s progress, challenges, internal conflicts or changes that need to be made.”

Myers says accepting feedback is also a key.

“One benefit of outsourcing is that vendors have experience with many other organizations doing similar work and can offer recommendations for improvements or changes,” she says. To this end, managers should communicate the firm’s vision of the outsourced relationship to all staff, clearly identify who is responsible for each part of the project and clarify relevant time lines.

A major area where relationships become especially important is in contract negotiations, according to Marla Harr, business professional development consultant with Business Etiquette International and who also teaches meeting management at Arizona State University.

“It goes back to the old saying that people do business with people they know, like and trust, and it takes time to develop a relationship that reflects that saying,” she says. “Once you do, it makes the contract process so much easier.”

With a hotel contract, for example, a positive relationship may make it more likely to gain concessions such as discounts on food and beverages, audio-visual equipment and staff room rates, even for a conference that is not a real revenue generator for the hotel.

“In real estate, it’s location, location, location,” Harr says. “I believe in the event world it really is relationship, relationship, relationship.”

She says that even with a smaller conference there can be a host of suppliers such as the hotel, AV company, ground transportation, florist, provider of give-a-way items and speakers. “You need a good relationship with all of them to ensure a smooth event,” she says. “The trick is to make them feel a part of the team and the event.”

She recalls a proposed hotel contract where the in-house AV company wanted to charge about $30,000 for three days of internet service.

“Needless to say it was way over my budget and really ridiculous pricing,” she says. “It was a deal breaker, but my hotel sales person got it down to where we could afford the internet and use that hotel. Relationships were the key.”

Harr adds that holding an event in another country brings a whole new ball game in building relationships.

“It takes time, research and understanding as to how that country does business based on their customs and cultural differences to the way we do business,” he says. “If a planner hasn’t done due diligence before planning an event in a foreign country, they are in for many surprises that could cost money, time and the success of the event.”

Trusted Advisor

Anil Punyapu, vice president of sales at Cvent, an enterprise event management company based in Tysons Corner, Virginia, echoes the importance of the trust factor.

A good relationship among meeting planners and suppliers and other partners is similar to a “trusted advisor” relationship that requires effort from both sides, he says. “Suppliers should focus on gaining industry insights so that they may apply these insights to aid their client, while planners — through having access to a lot of data and information on the web — should expect and trust the direct market insights of the supplier.”

He notes that in developing a good relationship with a supplier, meeting planners should focus on understanding the motivations and long-term goals of the supplier. At the same time, meeting planners should understand the supplier’s profit margins and apply reasonable numbers to them.

A mistake, he adds, is to focus too much on minor cost savings.

“Planners too often mistakenly commoditize the relationship with the suppliers to try to save a few dollars,” Punyapu says. “This can backfire and result in losing supplier loyalty during tough times.”

Negotiate in Good Faith and Keep Communication Open

Jeff Kear, founder of event management software provider Planning Pod, in Highlands Ranch, Colorado, emphasizes the importance of professionalism with the financial side of event management.

“Negotiate with suppliers in good faith and pay on time,” he says. “Nothing will get you blacklisted faster by a supplier than if you pay them late or repeatedly beat them up on pricing to the point that they barely make a profit.” He says that every supplier involved in an event deserves a fair profit, and if assuring that poses problems, planners should look to additional sources of funding for the event in question. The alternative is to end up working with low-cost providers who may cut corners and provide inferior service, irreparably harming events in the process.

Kear also suggests promoting suppliers and partners whenever possible and sending referrals their way.

“The best way to have your partners go above and beyond for you with your events is to spread your love for them ahead of time,” he says. “This includes shouting out about them consistently on social media and recommending them to your industry peers when they have a need for the partner’s services.” In making referrals, he adds, the best way to make sure suppliers realize where the referral came from is to provide an introduction via email.

Taking the broad view is also advisable, according to Andrew Schrage, co-owner of Denver-based Money Crashers Personal Finance, who says the reasons for building relationships with suppliers go beyond any single meeting.

“If one were just planning a one-off event, it might not be necessary,” he says. “But these relationships are essential moving forward so you can get possible discounts for repeat business, better and faster customer service, and last-minute orders fulfilled when necessary.”

To foster such relationships, he suggests staying in touch on a continual basis.

“Even if you don’t need an order or other service, it never hurts to check in once in a while,” he says. “Connect with your vendors on your social media accounts. It’s another great way to keep in touch and stay abreast of current events and trends.”

Being considerate with deadlines also will be appreciated.

“Give them as much lead time as possible when planning your events,” Schrage says. “Last-minute stuff will probably pop up from time to time, but try to keep that as minimal as possible.”

Another step is simply offering praise. “Give a shout out or mention of the vendors and suppliers at your event,” he says. “They’ll appreciate the free advertising, and it also will further foster the relationship.”

In any transaction, all parties concerned should remember that relationships go both ways reminds Kim Harvey, sales manager at Doral Arrowwood in White Plains, New York. In her work with planners, she has learned to meet high expectations.

“Financial and insurance meeting planning professionals are typically very seasoned and knowledgeable of their hospitality industry partners, capabilities and services,” Harvey says. “I feel it is necessary to approach meeting planners in this market on a consultative basis. It’s key to provide them with open, honest and strong communications.”

She says that to be successful and foster strong relationships with clients in this market, she and her team must understand who they are and what their needs are by asking key questions: what division, what level of group, why they have a need for the offsite meeting, what is important to the host, what are the organization’s goals?

“The more we understand a client’s needs the better we understand if we are truly the best location for the meeting or if we should recommend another property in our portfolio or elsewhere,” she says. This necessitates clearly understanding the meeting planner’s needs, the attendees’ needs and the overall corporate goal.

“Clients are looking for a quality experience at the best possible value,” Harvey says. “This industry, like many others, is doing more with less, and we need to support our clients in this market more than ever.”

The Bottom Line

In any setting, planners will do well to make a conscious and consistent effort to foster great relationships. Lamagna advises keeping in mind that dealing with a vendor makes for a reciprocating relationship. “Vendors can be a pipeline for new clients, advise you when you need creative solutions related to their areas of expertise, and are often relied upon when a client needs an impossible ask in an improbable time frame,” she says. “Vendors are there to fill in your gaps be it knowledge or manpower. You need them to want to help you shine.”

For that to happen of course, vendors must feel that you are treating them well.

“Nothing inspires loyalty as much as respect and kindness,” Lamagna says. So behavior that reflects those values is a must.

“Bottom line: your vendors are walking billboards for your organization,” she says. “It’s your choice as to what they’re saying about you.”

 

Tags: Fostering Great Supplier Relationships, Supplier Relationships, Insurance & Financial Meetings Management, The Meeting Magazines, Event Planning, Strategic Planners, Corporate Meetings, Corporate Events