Carol Verret Consulting 
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The Science of Hotel Sales* 

The Benchmarking Imperative for
Success in a Difficult Economy
 

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July 2008 - This topic may not rate high on the ‘sexiness’ meter in a period where hotels are frantically seeking new strategies to generate demand but managers and owners will love it as it gives them information they need to evaluate sales strategies!   It is imperative that we focus on new strategies based upon changing habits in the consumer’s travel buying behavior.  The question is how will the implementation of these strategies be measured in order to evaluate their effectiveness?

The hotel industry in general has not been as systematic as many industries in goal setting and measuring the sales activity of hotel sales departments.  Most sales driven industries have benchmarking mechanisms in place to evaluate the success of marketing and sale strategies.

In an ideal world, marketing drives the customer to a lead generation source; the leads are than picked up by the sales team and developed into ‘buys’.   The measurement of the success of the strategy lies in the number of leads generated at the channel level and the quality of those leads is evaluated by the sales department’s effectiveness in converting those to customers.

In many sales driven industries such as insurance, real estate, stock brokerage, etc., the sales person is responsible for generating a large proportion of those leads.  Hotel sales falls somewhere in the middle – advertising and promotions can drive leads to revenue channels but at the same time, the sales department also needs to ‘prospect’ for new business within a strategic sector of the market.
How the sales activity of a hotel sales department is measured can indicate whether or not a marketing campaign or a sales strategy is producing the desired results.   Far from being a punitive judgment on the sales team, it is a valuable tool to be able to say to management or marketing that the number of leads generated is inadequate to justify the marketing program or based upon the call activity to a certain market segment, it is not producing the level of interest that was previously anticipated in the strategy to pursue this segment. 

However, the conversion of leads or the ability of a sales person to convert leads to customers may also depend upon the level of training that they receive.  My first job in a ‘sales driven’ industry was the result of graduating from graduate school with a degree that guaranteed nothing more than a ride on the bus for a dollar.   The only company that would hire me was a commission based life insurance company.  

The company sent me and my fellow novices to training for three weeks before we were allowed to pick up a phone.  After several months in the field, the call to appointment ratio was developed as well as our call to closing ratio.  The assumption was that the more proficient we became in our sales skills, the lower the call to closing ratio would be.  My call to appointment ratio started out at 26 to 1 and my call to closing ratio was 130 to one.  That translates to 26 calls per day to get 5 appointments out of which would come one sale per week.  Brutal!   

The point of that story is that I became more proficient in finding qualified prospects and developing a relationship that would lead to a close as I progressed.  I left the life insurance job when my commission account floated back up to zero.  My first hotel sales job followed where I was able to succeed not because I was the sharpest tool in the box (I didn’t even know what a room night was) but because I had been well trained and understood the importance of measuring the effectiveness of my own activity. 

In tough economic times, it is imperative to measure the results of sales activity so we can measure the effectiveness of sales and marketing strategies:

  • Call to Closing Ratio.  Measure all sales contacts; include the number of all sales contacts made over the course of the week or month, phone and email.    Hotel Sales people sometimes make more servicing calls than necessary. Divide the number of calls by the number of contracts closed – that will give you’re the ‘call to closing ‘ ratio.  Bear in mind that some market segments, such as SMERFE, require more calls.
  • Average Group Size.   The average group size is important because the steps of the sales process are exactly the same for large groups as small ones.  Take the number of contracts over the measurement period and divide that into the number of room nights.  When we recently did this at a client’s sales office, we found a surprising result – the SMERFE sales manager’s average group was 35 rooms while the association and corporate sales managers rooms average between 15 and 25.  
  • Feed the Lead Pipeline.   One Director of Sales that I know did a very wise thing.  One of the sales assistant’s job duties includes spending 60% per cent of her time prospecting on the internet and locating the name and contact info for qualified contacts.   These are passed on to the appropriate sales person to be developed. Sales people are best at selling – let someone else do the prospecting!  
  • Evaluate High Call to Closing Ratios.  If call to closing ratios remain persistently high there could be several reasons: 
    • The marketing strategy.  The way and to whom the hotel is being marketed may need to be adjusted 
    • The quality of the leads.  If your sales people are calling lists that begin with A and end with frustration look at the lead generation process. 
    • Skill Sets.  No one is born knowing how to sell (contrary to popular wisdom).  They may need some support in their sales skills or need support in one area of the sales process – like closing. 
In this economy, it may take two to three times the sales contacts just to generate the sales volume that the hotel enjoyed last year.   The consequence of not knowing the  ‘Science of Sales’ is frustration from qualified and skilled sales people who are not being supported by effective marketing strategies, pursuing the wrong prospects and/or not getting the sales skill set support that they need.  Help them succeed! 

* Credit for the phrase, The Science of Sales should be given to Doug Farrar of the Arbor Day Foundation who in his wisdom decided to give his excellent sales team support!

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 about the company click on www.carolverret.com. To contact Carol send her an email at carol@carolverret.com or she can be reached by cell phone (303) 618-4065.  Visit www.hotelsalesblog.com.  
 

Log onto the web site to view our Training Solutions for A Difficult Economy

copyright © Carol Verret, 2002-2003 -2004 -2005 - 2006 - 2007 - 2008


 
Contact:
Carol Verret, Consulting and Training
Carol Verret
5910 S. University #C-18, PMB 374
Greenwood Village, CO 80121
Telephone: (303) 618-4065
carol@carolverret.com
Web Site: http://www.carolverret.com/
Email: carol@carolverret.com
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Also See: Marketing & Revenue Management Plan 2009 - Succeeding in a Difficult Year / Carol Verret / July 2008
Tactics to Drive Business in a ‘Not So Hot’ Summer / Carol Verret / May 2008
All Marketers Are Liars - Web 2.0 Strategies for Hotel Sales and Marketing / Carol Verret / April 2008
Contingency Hotel Revenue Management Strategies 'I Will not Cut Prices'/ Carol Verret / March 2008
The Contingency Hotel Sales and Marketing Plan - Hope for the Best, Plan for the Worst / Carol Verret / February 2008
Change is the Buzz – Rebooting Hotel Sales Activity at the Property Level / Carol Verret / January 2008
Habits of Highly Successful Revenue Managers Ramped Up for 2008 / Carol Verret / November 2007
Five Tips to Improving Hotel Customer Service with User Generated Reviews / Carol Verret / October 2007
Habits of Highly Successful Hotel Sales People – A Seismic Shift in 2008! / Carol Verret / September 2007
GMs – How User Generated Review Sites Can Make you a Better Manager! / Carol Verret / September 2007
Web 2.0 and Hotel Sales Strategies for '08; What Are Your Clients Saying About You? / Carol Verret / August 2007
“It’s not the big that eat the small, it’s the fast that eat the slow” -- Five Revenue Management Tactics for Independent Hotels / Carol Verett / June 2007
Developing New Hotel Business Using Client DNA / Carol Verret / May 2007
The Jigsaw Puzzle – The Fit of the Revenue Management and Internet Group Sales Pieces / Carol Verret / April 2007
Client DNA - The Gold Standard for New Business Development / Carol Verret / March 2007
The 'I Hate Cold Calls' Web Cast - The New Paradigm of Sales! / Carol Verret / February 2007
Hate Cold Calls? - Discover the New Paradigm of Hotel Sales / Carol Verret / January 2007
Issues in Hotel Sales Training - Metics for Success / Carol Verret / December 2006
Is the Party Over?; The Challenge of Decreasing Hotel Room Demand / Carol Verret / October 2006
The Habits of Highly Successful Hotel Sales People Ramp Up for 2006! / Carol Verret / September 2006
Identifying the WIIFM Factor – The Essential of Hotel Sales Success / Carol Verret / August 2006
Revenue Management for Hotel GMs – What You Don’t Know Can Jump Up and Bite You! / Carol Verret / July 2006
Feeding the Revenue Elephant; Hotel Revenue Management / Summer 2006
The "Tipping Point" - Identifying the Touch Points in Hotel Sales / Carol Verret / May 2006
The "Tipping Point" - Touch Points Make a Difference in Customer Service Training / Carol Verret / April 2006
Selling Up! Taking Group Room Revenue to a New Level / Carol Verret / February 2006
Revenue Management 2006; The Risks and Rewards / Carol Verret /January 2006 
Revenue Management and Group Sales - The Partnership Not the Disconnect / Carol Verret / November 2005
Habits of Highly Successful Hotel Sales People / Carol Verret / September 2005
Triple Witching Hour - The Marketing Plan, Revenue Management Strategy and RFPs for '06 / Carol Verret / August 2005
"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



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