Sales and Marketing Reviews
we all know the questions, now let’s concentrate on the answers
In our experience the effective management of the Sales and Marketing function in individual hotels leaves a lot to be desired. Not surprisingly this is in part due to the lack of expertise amongst operational management and the fact that their attention is often focused on the operational aspects of the hotel. Today, it is increasingly important for General Managers to effectively manage the Sales & Marketing function and it is up to the specialists to clearly demonstrate they are "on top of the game".
We are aware that many readers will say that the questions below are currently being 'dealt with'. Our issue is that it is vital that senior management ensure they are receiving meaningful answers that have real depth and that they can be substantiated wherever possible with the numbers. So often this is not the case.
For us, the Sales and Marketing (S & M) Review should deal with the following questions at a minimum:
1. How have we done compared to budget and the previous year and what are the performance trends?
This is predominantly about the numbers; a report should be produced with the accountant and delivered by the S & M team. For the relevant trading period this should cover:
- Trading revenues/rooms sold/ADR
- Comparisons to previous year and to budget
- Performance benchmarks against a relevant competitor set
2. What do we need to do to address the negative variances?
The answer could be "do nothing", but if it is "do something" then it must be accompanied by clear reasons and costs. Is it a segment where more business can be won and if so, what is it worth and how much time and money would we have to spend to realise its potential? Only with this information can we make an informed decision.
3. Can we make more of the positive variances?
Sometimes these happen by chance and at other times because of specific action that has been taken. If it is because of a specific action (like a promotion) the key question is, "can we make more of this segment if we repeat the action"?. Again the cost/benefit must be assessed. If by chance, was it a 'one off' or could we, with some action, make it repeatable and enable its inclusion in future budgets.
4. How effective has our S & M activity been this period?
This is an area where answers can be very woolly --- but they don't have to be. They should be based on a review of planned activity and expenditure. The S & M manager must be able to report successes and explain failures. Examples could include promotions, the resulting cost and revenues, sales contact with top 20 clients and the value of bookings received, exhibitions attended including the cost, and the enquiries/bookings received. It is only on the basis of this level of rigorous assessment that decisions to repeat activity can be made.
5. Are we going to achieve the next period's sales budget?
This is an area where the S & M manager needs input from reservations, C&B etc. as they should be tracking the pattern of advance bookings and so should be aware of the adequacy of bookings in relation to budgets. The key question for S & M is, "if achievement of budget is in question, what can S & M do to remedy the situation for the current or subsequent periods?"
6. What are the key activities and expenditure for S & M in the forthcoming period?"
In common with question 4, the response here should list actions and the results they should deliver as a basis for subsequent evaluation and be directly associated with specific market segments. For example:
- How many sales calls to which market sector with the aim of securing XXX room nights in periods X/Y/Z.
- An e-mail promotion to 500 past mid-week leisure guests with an offer of XXX aiming for 25 bookings of a three night stay worth £XXX.
- Attendance at a wedding fair costing £XXX aiming to increase wedding enquiries in the following two months from an average of XX per week to YY per week.
7. Taking what we've learned about the business in the last period, what S & M actions should we include or remove from next year's plan?
It is always best to have a rolling S & M plan rather than simply writing it once a year. At the end of a period, management is usually best placed to know what should be considered in the same period the year following. This may be to guard against facing the same negative variances discussed above, or to help ensure that activities judged as successful, are repeated.
There is nothing revolutionary about the list of questions above. However we have rarely come across hotels where the process is approached with sufficient rigour. It is down to the whole management team to work together to make this process work well, and when it does, all will feel in more control of the business.
Our recent experience indicates that such reviews are frequently lacking in the detail that is needed and that Sales and Marketing Managers too often operate in isolation from other members of the management team. Most significantly, the hotel accountant is frequently not involved enough. Often thought of as the "numbers people", their input is fundamental to helping everyone understand what is going on in the business. When accountants are asked to provide numbers to help manage the future of the business, rather than simply reporting on what has happened, everyone benefits. When a team works closely together, everyone has a better understanding of what is happening in the business, As a result, the team also feels in greater control.
In these examples we have concentrated on room sales as the most important contributor to profitability - too often an excess of time (and money) is spent on less profitable aspects of the business.
The basis of this process and all effective planning of sales and marketing is the detailed segmentation of the business. Everyone in the management team must be aware of the mix of business that is being sought and delivered. In the case of room sales, simply splitting the business between leisure, corporate and function isn't enough to be helpful - you have to know what is expected from every identifiable business segment related to the business sector as each needs a specific sales and marketing approach. For example, leisure businesses may need to be split between individual short breaks, mid-week promotions, family holidays etc. For this to work effectively, S & M has to work with the accountant to match the business mix with the numbers and with front office and reservations to track the business when it comes in. It is essential that the business has a budget based on realistic segmentation and an S & M plan focusing on each segment.
Phone: +44 (0) 1989 780699