The Real Cost
The Real Cost – by Ed Rigsbee
When was the last time that a mess-up by someone else cost you a bunch of time, money and/or energy? Or, when was the last time one of your mess-ups cost someone else?
In the world of selling, there are hunters and there are farmers. The hunters are the sales people, both inside and outside, that specialize in going after new business—their thrust is the hunt. Farmers on the other hand specialize in nurturing house accounts and business that the hunters have brought in. But what happens when the farmers don’t tend to their crops?
At my first outside sales job, the owner of the business told me, “If you lose an account because you were out sold, it’s okay. But, if you lose an account because you weren’t paying attention to that account—you’re out of here!” He proved that he meant it when I saw him fire a salesman named Mike that had been with him for a decade, but got lazy and lost a major account because he wasn’t paying attention.
When a farmer doesn’t pay attention, it is an absolute travesty. If you are a sales manager, and you tolerate a farmer not tending to their crops (accounts)—you are just as guilty as your farmer.
Not long ago, I traveled to the east coast to present to a chapter of an association of which I am a member. This chapter had been meeting at the same suburban area hotel on the same Saturday of each month for the previous three years. This particular January Saturday was to be different.
It all started Friday night when my contact with the association dropped me back at the hotel following dinner. In passing, she asked if I knew that I’d be presenting the next morning in the hotel’s restaurant, during regular service to the public, rather than their usual meeting room. Well, that was a surprise that was to me.
Three days earlier, when the groups program chair called the hotel to check if everything was in place for their coming Saturday meeting, the hotel sales contact, Lois, told the program chair that they had no reservation for the group for the coming Saturday. And, Lois told the program chair that the room they usually use, along with every other meeting room and space in the hotel was also sold out. Wow, what a predicament!
When the meeting chair asked Lois how this could be? Especially since the group had been using that meeting room the same Saturday of the month for the past three years. Lois told her that she thought it was odd that the organization had not signed a contract for the coming year, but since the hotel’s customers “call them” she didn’t give it a second thought. Excuse me! That farmer definitely was not tending her crops (accounts). Can you believe it? The sales person was ignorant enough to state, “Our customers call us.” She sold the room out from under this group. Perhaps because the group to whom she sold the room was generating higher revenue—she does have to be mindful of her commission check!
What was the real cost, to the hotel, of this debacle? Late that Friday evening, I worked with the hotel’s general manager and food & beverage manager for over an hour looking at possibilities to make the next day’s presentation work, in a public hotel restaurant. The hotel general manager told me that he, and his staff had been working on the problem for the past three days. They had even called other hotels to try and move the meeting—but without success.
Let’s look at the real cost: A hotel general manager making a minimum of $100,000 a year, working a six-day work week equates to about $333 per working day. If we take into account that the general manager, food & beverage manager, sales staff and others had been dealing with the issue for three days and just add up the general manager’s pay, that gives us about $1,000 cost to the hotel. I’m sure her commission on the sale was not that much.
Now let’s add in the damage to both the national brand and that particular location. This group happened to be a gathering of local area professional speakers. Since many spend, way too much time in hotels, their expectations tend to be a bit higher than most. What will they say to local meeting planners about this hotel? If the approximately 50 professional speakers mention the situation to only one meeting planner over the following year—that’s 50 local meeting planners that have received a poor report about this property.
If only one of those 50 meeting planners decided not to book a meeting at that property based on what they heard, how many thousands of dollars would that property not receive in future revenue? Let alone the tarnished perception of this particular brand nationally. Surely it would be more that the farmer salesperson’s commission on that particular room, that particular Saturday.
Gosh, because that farmer salesperson was too lazy, apathetic, ignorant or greedy, the real cost to the hotel’s productivity and revenue is substantial. Had this farmer salesperson worked for my boss that I had mentioned earlier, she surely would have been sent packing. In selecting and/or maintaining the wrong people to represent your business interests, whether their challenge is Training, Ego or Attitude, you will pay dearly for their bankruptcy of skills.
Ed Rigsbee, CSP
President of Rigsbee Research, an alliance research and implementation organization & author of PartnerShift-How to Profit from the Partnering Trend, Developing Strategic Alliances & The Art of Partnering. More about Rigsbee Research & Ed Rigsbee is available at http://www.rigsbee.com/.
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