Carol Verret Consulting
Triple Witching Hour - The Marketing Plan,
Revenue Management Strategy
and RFPs for '06
|by Carol Verret, August 2005
It’s triple witching hour in the hospitality industry! Let me explain -- it is the time when the marketing plan, RFP bidding and establishing the revenue management strategy all combine into a confluence of factors that will influence success in 2006.
The term is adapted from the stock market and is defined as follows:
“An event that occurs when the contracts for stock index futures, stock
index options, and stock options all expire on the same day. Triple Witching
Days happen four times a year: the third Friday of March, June, September,
and December. This phenomenon is sometimes referred to as "Freaky Friday."
The final trading hour for that Friday is the hour known as triple witching
At times, these three strategies are developed in a vacuum – uncoordinated and when this occurs one of these departments, revenue mangement or sales, is compelled to ‘knuckle under’ to the other. This is easily addressed if the sales and revenue mangement strategies are developed in concurrence and harmony (yes, I said harmony!)
I have addressed the issue of the ‘disconnect’ between sales and revenue management previously. It does not need to be this way and I will outline how we can avoid this conflict and move the property forward to where it needs to be to take advantage of the tremendous opportunity that this recovery in our industry is experiencing.
1. RFPs. Sales often fills out the RFP forms without checking and comparing actual rate and productivity in relation to arrival/departure patterns, displacement of higher rated business and seasonality. We are so often eager to capture the business – any business – that we fail to remember who signs our paycheck. If the RFP business pattern is not aligned with the revenue management strategy, we sabotage the RM strategy by blindly accepting the terms and conditions of the consortia and other RFP requests.
What we fail to remember is that these contractors are in the business of pushing for the best deal they can get and most of them have admitted that this year that they know it is a ‘sellers market’. Our job in sales is to know the parameters of the RM strategy so we can push back and negotiate the best deal for the hotel. Remember, these contractors would like to have but do not need to have ‘last room availability’. A ‘win win’ is optimal but not necessary.
2. The Marketing Plan and Sacred Cows. I am a sales person by training and nature so I know where you all are coming from in this regard. We all have ‘sacred cows’, those accounts that have been with us forever and to whom we are loyal, whether it is because they are nice people to deal with, give us free passes to an event, you name it! However, from time to time and this is one of those times, we need to re-evaluate with an unemotional eye the business and rate that these accounts are seeking in relation to the revenue management strategy.
It is often helpful to bring them into our strategy and allow them to tell us theirs so that we can decide if we can forge a deal that works for both the hotel and the account. If not, we have to understand that it isn’t going to work for the hotel and look for new business that will. It is way too comfortable to remain with the old standbys so we don’t have to engage in that messy business of prospecting for new accounts.
The marketing plan inititiatives should support the revenue management strategy. For example, if a discount promotion is planned has it been conceived in conjunction with the revenue manager and does the expiration date coincide with the revenue management strategy?
In terms of sales strategies, does every sales person understand the rate parameters for quoting groups for days and periods of time in ’06, ’07 and forward? Is the new business development strategy aligned to focus on prospecting for business in each market segment that will interface and compliment the revenue management strategy? In each market segment, there is business that is more value driven and less rate sensitive than other business – yes, even in the SMERFE segment (another article, another time.)
3. Developing the Revenue Management Strategy. In developing the revenue management strategy, the Revenue Manager looks at a number of historical variables in order to anticipate demand. The goal is to provide the right product to the right customer at the right price at the right time. Isn’t this also the goal of sales and marketing?
The revenue management strategy should be developed in tandem with the sales and Marketing Plan for the revenue stream to move forward most profitably. Both departments should be rewarded accordingly.
A great deal of the tension between the two departments will disappear if the sales incentive structure is changed to reward the sales department for revenue during ‘opportunity’ or off peak periods. It doesn’t take a great deal of talent to sell discounted business during high season.
When all of these processes are aligned triple witching hour becomes the time when revenue is optimized for the hotel. It is truly a wonderful thing when a ‘plan’ comes together!
Carol Verret and Associates Consulting and Training offers training services and consulting in the areas of sales, revenue management and customer service primarily but not exclusively to the hospitality industry. To find out more abut the company click on www.carolverret.com. To contact Carol, send her an email at firstname.lastname@example.org or call phone (303) 618-4065.
copyright © Carol Verret, 2002-2003 -2004 -2005
5910 S. University #C-18, PMB 374
Greenwood Village, CO 80121
Telephone: (303) 618-4065
Web Site: http://www.carolverret.com/
|Also See:||"Smile" is a Learned Behavior - Creating a Culture of Customer Service / Carol Verret / July 2005|
|Revenue Management Systems -- Considerations for Evaluation / Carol Verret / June 2005|
|Disconnect -- Aligning the Revenue Management and Sales Strategies / Carol Verret / May 2005|
|Independent Hotels & Resorts; Ride the Wave or Float with the Tide? / Carol Verret / March 2005|
|Hospitality Sales Training Companies Reach Across the Competitive Playing Field to Combine Live Seminar Expertise with the Convenience of the Internet / Carol Verret / January 2005|
|Revenue Management - The Challenge for Hotel Sales / Carol Verret / January 2005|
|Hotel Sales Departments -- Issues in Processes and Functionality / Carol Verret / November 2004|
|The GM'S Role in Revenue Management / Carol Verret / October 2004|
|Transforming the Hotel Sales Organization; Alignment with the New Realities of Sales / Carol Verret / August 2004|
|The Revenue Management Strategy - The Pre-Plan Marketing Plan / Carol Verret / July 2004|
|Hotel Revenue Management this Summer - a Game of Skill, Art and Most of All Nerves / Carol Verett / May 2004|
|What Do Meeting Planners Want? Hotel Sales Managers Want to Know! / Carol Verret / May 2004|
|Revenue Management -- The Integration of Revenue Drivers / Carol Verret / March 2004|
|CYBER SALES -- Hotel Sales in an Internet World is the New Reality / Carol Verret / February 2004|
|The New Realities of Hotel Sales - Focus on Revenue Generation / Carol Verret / January 2004|
|Hotel Sales -- Innovation in the Face of Limitations / Carol Verret / November 2003|
|The Good News & the Bad News; Improving Economy = New Hotel Development / Carol Verret / October 2003|
|Leadership - General Managers Managing the Sales Process / Carol Verret / October 2003|
|When the Crystal Ball is Cloudy; Marketing Plans for 2004 / Carol Verret / July 2003|
|Partnership of Sales and Technology; Using Tech Tools to "Sell" the Hotels / Carol Verret / July 2003|
|Back to the Basics? The Basics of Hotel Sales Have Changed! / May 2003|
|Creating Sales "HUNTERS": The Skill Sets Required in the New Hotel Sales Environment / April 2003|
|Heightened Security Requires New Strategies in Hotels Sales / Carol Verret Consulting and Training / Mar 2003|
|Revenue Recovery - Building The ‘A’ Team in Sales / Carol Verret / January 2003|
|Contingency Marketing Plan – War In Iraq! / Carol Verret / November 2002|
|Playing the Rate Game - Positioning -- Positioning -- Positioning! / Carol Verret / October 2002|
|The Rate Game - Playing to Win / Carol Verret / October 2002|
|The Challenge of Marketing Independent Boutique Hotels / Carol Verett / August 2002|
|Hotel Sales in a Limited Service Environment - The Rules Have Changed / Carol Verett / August 2002|
|The General Manager’s Role in Sales -Chief Marketing Officer of the Hotel / Carol Verret / April 2002|
|100% Market Share Penetration is Not Good Enough / Carol Verett / January 2002|
|The Key to REVPAR Recovery – New Business Development / Carol Verett / December 2001|
|Trash the 2002 Marketing Plan - And Just Start Over / Carol Verett / September 2001|
|How to Use Consultants Effectively – A View From the Other Side / Carol Verret / August 2001|
|How Soft Is Your Hotel's Economic Landing? / Carol Verret / Aprl 2001|
|The ‘Value Proposition’: Marketing Yourself to Prospective Employees / Carol Verret / January 2001|
|Generation Y: Motivating and Training a New Generation of Employees / Carol Verret / November 2000|
|Why Customer Service Seminars Don't Work / Carol Verret / October 2000|
|Creating a Culture of Customer Service / Carol Verret Consulting and Training / Sept 2000|
|FAT, DUMB AND HAPPY – The Seasonal Boom and Bust Cycle / Carol Verret / August 2000|
|Surf's Up - Ride the Wave or Miss the Boat -The Effective Use of Technology in Hotel Sales / Carol Verret / July 2000|
|Measuring Effectiveness of Hotel Sales Departments / Carol Verret / June 2000|
|Hotel Sales Training - The Need for Immediate Results / Carol Verret/ May 2000|