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Organizing for Meetings & Convention Sales

Introduction

            The architecture term “form follows function” is applicable for how a salesforce and sales department should be organized.  The form of the sales department organization must take into account the function or task that the salesforce is asked to do (the sales strategic plan outlines this task). The following discussion describes the typical organizational structure of a large convention and meetings oriented hotel.  A hotel example is used since it is the most sophisticated model of sales department organizations found in the hospitality industry.  The following is a model of a “full-blown” organization.  You will encounter hospitality organizations that follow this as well as organizations that have only a few of the structural components.

Overview and Terminology

Levels of Hotel Organizations

            Corporate Level.  As mentioned in the chapter on Sales Management Functions, most hotel chains have a National Account Management  (NAM) structure.  The salespeople at this level (national account managers/executives) are situated in major cities around the United States.  They are located in cities where major corporations and associations are headquartered.  There primary job is to penetrate large corporate accounts and then send sales leads to their chain properties.  The salesforce situated at each of these properties would then contact the account manager’s original contact and attempt to directly sell their specific property.  Thus, the national account manager sells the entire chain and the property-level salesperson sells their specific property.

            Property Level.  The following discussion is concerned with organization at the property level.  The salesforce at this level have supervising managers as well as support staff.  They are solely responsible to obtain revenue for their specific property.  They obtain leads (potential customers/prospects) from the National Account Managers as well as independently seek prospects from many other sources. 

Line vs. Staff Departments

            Line Departments.  These are those departments that deal with day-to-day operations.  There are two categories of line departments:  Operations and Sales and Marketing. 

Operations. In a hotel these are commonly, front office, food and beverage, housekeeping, etc.  These operational departments operate on the revenue that is brought to the hotel by both advertising (transient business) and by the salesforce (convention and group business).

Sales and Marketing.  The salesforce performs day-to-day activities and is clearly a line department. 

Staff Departments.  These are departments, which support the line departments.  They provide services such as information and assistance.  The accounting department is an example.

Operations vs. Sales and Marketing 

Unfortunately, there is historical friction between operations and sales.  Why?  Sales, in the past, have been guilty of over promising what operations was capable of producing.  Also, sales has been guilty of accepting lower prices than what operations might deem profitable.

From the sales viewpoint, operations has been historically product oriented as opposed to customer oriented.  Additionally, operations tends to make decisions based on costs alone vs. understanding that sometimes you take a small loss or break even so that long term business can be won. 

Resolution of friction is beginning to subside as sales is becoming more sophisticated in viewing the total impact of business vs. short-term orientation.  As sales takes a full business view, some of their sins of the past are being eliminated.  Simultaneously, operations is becoming more customer oriented and understands the long-term impact of satisfied customers and repeat/referral business.  Thus, today friction is being reduced.

The Salesforce as “Micro-Marketers”

            “Micro-Marketer” Take Responsibility for Product/Service (operational concerns of meetings). Traditionally, sales in a hotel was seen by operations as “that other department.”  The sales department was generally only responsible for bringing in revenue. Sales was seen as a sub-component of “marketing;” one of the promotional  (one of the 4-Ps) tool (along with advertising and PR) whose purpose was to “communicate” the product/service (the hotel) through a sales presentation.  Today, sales people and their sales/marketing departments have become full-fledged “micro-marketers.”  This means that they assume responsibilities for all 4-Ps:  Product/Price/Place/Promotion.  Since Conventions and Meetings comprise 65% plus of a hotels revenue and this revenue must be obtained from the salesforce, the sales department is very concerned with how the hotel product/service is delivered to their meeting planner customers.

            Convention Services Managers. (CSMs) are the link to some control of operations by the sales department.  CSMs are like a symphony conductor.  They directly interface with the meeting planner customer to ensure that a “wonderful symphony is played” (the successful meeting).  Since the meeting is successfully played or fulfilled by a large number of hotel departments (F&B, Front Desk, etc), the CSM conducts or synchronizes the hotel’s delivery of service.  The CSM’s department (there are several CSM) report to the Sales and Marketing Department management of large convention oriented hotels/resorts.

Three Basic Principles of Management

            A number of factors must be taken into consideration before determining the actual structure of a property-level sales office.  The following three areas deal with the relationships between salesforce management and their supervised sales staff:

            Unity of Command.  Provides accountability by ensuring that salespeople answer to only one person. Salespeople who have two or more bosses may be given conflicting orders and this greatly impedes the sales effort.

            Authority Commensurate with Responsibility.  This means that the salesperson or any employee for that matter has the authority to make decisions within his or her realm of responsibility.  A salesperson, for example, may be given guidelines for negotiating rates.  Within the range of rates, the salesperson may be able to negotiate without seeking approval from the sales director.  Below a certain rate, approval must be sought before the salesperson can offer it to the customer.

            Span of Control.  This refers to the number of persons that a supervisor can adequately manage.  Too many people will inhibit the effective monitoring and supervision.  Note, in the past the rule of thumb on span of control was seven.  Today, with electronic communications, span of control is increasing.

Large and Small Property-Level Salesforces. 

            “Book-It & Cook-It” Philosophy.  This approach is appropriate at small properties where the percentage of revenue coming from group business is low.  Also, this type of property would have a small salesforce.  Here the salesperson that “books” the business is expected to “cook” or service the meeting when it is at the hotel.  Obviously, the salesperson’s time is consumed when the group is “in-house” and demands detailed attention.  In this case the salesperson switches roles and wears the hat of a CSM when the group is holding the meeting.

            Specialization Philosophy.  When a hotel does a large amount of group business, then it usually will have a large salesforce who does nothing but “book” the business.  CSMs (Convention Service Managers) are hired to specialize in “cooking” the business by orchestrating the hotel’s service staff to produce a successful meeting.  Obviously, the salesperson’s time is freed to keep selling.  However, salespeople must “check-in” on their customers when the meeting is going on.  This keeps the salesperson/customer relationship alive.

Organization of a Typical Large Convention/Meeting Hotel

Management

            Director of Marketing (DOM).  This is the chief sales and marketing officer.  He or she reports directly to the General Manager.  Since approximately 35% of the hotel’s revenue comes from transient business, advertising is the effective means to obtain this part of total hotel revenue.  Thus, the DOM will have primary responsibility for working with advertising agencies and PR firms.  The DOM will hire a special manager for the salesforce: the Director of Sales (DOS).

            Director of Sales (DOS).  This person is directly responsible for the salespeople.  The DOS has had authority delegated to him or her from the DOM.  Often the DOS is a “selling DOS” which means that they also have a few key customer accounts. NOTE:  sometimes the DOM and DOS jobs are combined and held by one person.  In this case, the position title would be the “Director of Sales and Marketing.”

Salesforce

           Group Salespeople.  These comprise the largest number of sales people in the sales department.  In a large (400 room) convention hotel, there may be six to seven.  They sell to meeting planners who plan meetings for corporations, associations and other.

            Tour and Travel Salespeople.  There is usually only one salesperson in this highly specialized market.  These groups travel for pleasure, not business.  The primary customer is the wholesale tour operator.

            Corporate Transient Salespeople.  Again, there is usually only one sales person here.  These salespeople call on secretaries and administrative assistants in local corporations.  Their goal is to call on a secretary who might be looking to house anyone visiting the local corporation.  This salesperson stays in frequent and personal contact with the secretaries of many local companies.  When the need for a hotel room to accommodate a visitor arises, the corporate transient salesperson hopes that the secretary will think of him or her first and send business to them.  “Secretaries’ Clubs” are used for this purpose by the corporate transient salesperson. Secretaries are given discounts to the hotel and it’s F&B along with other rewards and incentives for sending business to the hotel.