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62 Savings
and Cost Avoidance Opportunities in Meetings and Events
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A.
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Policy
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Adhere
to policy spending guidelines and budget
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1.
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Use a threshold for itemized expenses
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A policy will drive numerous savings for an
organization; for example:
If previous meeting F&B expense was 40% of total
budget (for full service meeting) and the new policy states that F&B
should not be more than 30% of total meeting expense, it could be a cost
avoidance.
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2.
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Use a cost per person per day threshold per meeting
type
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Some organizations are using a benchmarked cost per
person per day threshold for the type of meeting. E.g. An internal training meeting should
not cost more than $$$ per person per day whereas an incentive meeting should
not cost more than $$$ per person per day. This will drive cost savings.
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3.
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Use of preferred travel management company
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An organization will save money if one Travel
Management Company (TMC) is used vs. numerous companies. Debi often will find
multiple TMCs used, with multiple price points, and unused credits with
organizations that do not have a policy about using one agency. This single supplier approach to travel
management provides for centralized reporting, reuse of airline credits,
ability to track meeting / event attendees and lower costs.
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4.
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Adoption to group online booking tool
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If policy states that group travel must be made through
online booking tool vs. using a higher priced agent-assisted method, savings
will be recognized.
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5.
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Advance notification of meetings to obtain better
pricing
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The more lead-time available, generally speaking, the
more options on hotel or venue space you will have and an improved ability to
obtain reductions in rate and concessions.
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6.
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Use distressed space for last minute meetings to
obtain better pricing.
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For last minute meetings, identify hotels with
distressed space that want to fill the sleeping rooms and space before they
parish without revenue. This will result in cost avoidance.
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7.
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Use of diverse suppliers
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Track and manage spend with certified diversity
suppliers which may result in increased business from some clients that
require their suppliers to support diversity. Instead of a savings, the
contribution to the diversity suppliers spend may be considered part of the
ROI calculation.
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8.
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Charge no-shows
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For no-shows, those scheduled attendees that did neither
attend nor notify the meeting sponsor / requester or meeting professionals 24
hours in advance, penalties will be incurred. The penalty amount will be
determined by the meeting sponsor / budget holder. The budget holder may recognize a recovery
to monies lost.
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9.
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Before going off-site, check office space
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Meetings/events that are held at the organization’s
offices are the “business norm” and conference rooms should always be
considered first before going offsite. Offsite meetings / events may be approved if
internal space is not available. This
policy clause results in actual savings.
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10.
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Conduct an air
analysis on meeting locations
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Meetings that include travelers from two or more
locations may require an air analysis to determine the lowest cost meeting
location. Not many organizations take
this important step in determining the most cost-effective location for a
meeting. This policy clause results in cost avoidance.
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11.
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Close the registration
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When the organization closes the meeting registration a
couple of days before the meeting start date (e.g. 2 or 3 days), the organization
may not have to secure overflow properties that will result in additional
costs. [Note to reader: if gaining
more attendees is the priority, then obviously this statement is not
necessary].
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12.
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Identify special needs in advance
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Identify the special services needed in advance so as
not to pay premium prices (e.g., meditation rooms, lactation rooms, language translators,
sign language translators, etc.).
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13.
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Clarify if guests, companions and children are allowed
to accompany attendee
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Too many times, Debi has found extra unnecessary spend
at a meeting because an attendee funded their spouse and / or children
without approvals. A policy should
state whether an attendee is allowed to bring guests, companions, or
children.
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B.
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Demand
Management
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Manage
the demand of services by reducing requirements, reducing frequency,
encouraging substitution, or obtaining approvals.
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14.
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Reduce length of meetings by using virtual
technologies
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Move from a four-day face-to-face meeting to a two-day
meeting complemented with virtual meetings.
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15.
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Reduce the quantity of attendees by using hybrid
meetings
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Reduce the quantity of travelers to a face-to-face
meeting by using virtual technologies for a hybrid meeting (both face-to-face
and virtual at the same time).
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16.
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Eliminate non-essential meetings / one-day meetings
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One-day travel meetings, with purposes such as
training, project management, or non-client related, may be transitioned to a
virtual meeting.
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17.
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Reduce / lower demand of product or service
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There are too many options here to list them all. Below are a few samples:
- Reduce frequency of meetings
- Encourage substitution such as reduce bottled
water to pitchers or containers of water
- Lower expectations such as move to 3-star
property instead of 4-star property
- Instead of using black car service for ground transportation,
use min-coaches to transport multiple people at the same time.
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C.
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Control
and Compliance
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Monitor
policy, behaviors, suppliers
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18.
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Meetings routed through approval
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Route all or meetings over a certain spend threshold
through an approval process. Meetings that do not align with the
organization's goals could be denied. Note that small meetings under the
threshold for approval may result in high spend.
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19.
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Reduction in spend via audits of staff and suppliers
to agreed upon contracts
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If staff are not using the preferred suppliers for
meetings (e.g. hotels, ground, audio-visual), then the rates may be higher
than necessary.
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20.
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Proper rate loading or receiving the right group rates
as agreed to in contract
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If there was an agreed upon master discount with a
chain or supplier (e.g. 10% off all F&B for the most used 20 Hotels in
the Chain for Meetings), and if those discounts are not given, then an audit
may result in added savings.
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D.
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Sourcing
and
Strategic
Sourcing
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Negotiating
and contracting with suppliers per meeting and for the organization-wide
meetings program
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21.
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Improved negotiations per meeting
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Improved negotiations with hotels / venues on rates,
concessions, minimums, and guarantees.
There are too many opportunities here to mention them all but
everything is negotiable. Ask Debi for
her thorough master contract and concessions, which include hundreds of
places to save money.
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22.
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Use non-peak room nights
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Use non-peak room nights to reduce costs
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23.
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Use off-season locations / hotels
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Use off-season locations / hotels to reduce costs
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24.
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Multi-year contracts
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When
an organization has a recurring program, there may be savings in contracting
a multi-year contract. Debi has recognized 5-8% on guest rooms and a 10-15%
on F&B when negotiating a multi-year contract vs. a one-time meeting
contract.
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25.
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Share rooms
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Not popular, but many organizations still require
attendees under a certain level of title to share rooms to reduce sleeping
room costs.
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26.
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Cluster meetings from multiple properties to fewer
properties, overlapping if possible
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If an organization has meetings in Chicago, Oak Park,
and Evanston, Illinois, (all cities within a 20-mile radius) and they are
held in May and June at three different properties, it is possible to cluster
them into one property to improve efficiency and reduce spend.
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27.
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Move meetings to conference centers with Complete
Meeting Packages (CMPs)
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Combining all F&B, AV, meeting space and sleeping
rooms into one price will often reduce the cost of the meeting.
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28.
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Use an RFP process for preferred group hotels
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By reviewing an organization's total group spend at
hotels, it will become obvious which chains and properties are most
frequently used. Work with the chain
or property to obtain standard group rates, discounts, and concessions with
the understanding that the sourcing team will always have the right to
continue negotiating once a meeting is on the calendar.
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29.
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Move market share toward preferred transient and / or
preferred group hotels
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A preferred agreement with a hotel chain, brand, or
property will result in improved discounts. Moving market share towards those
preferred properties will decrease costs overall.
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30.
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Leverage group spend with transient volume and spend
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At the chain or property level, discuss the total
volume and spend that your organization is bringing to the table, and either
on the transient side, or group side, or both, additional discounts will be
available. With one mid-size client,
they did not have enough spend to negotiate at the chain level, but they did
have enough transient and group business at 15 select properties. All properties were willing to lower their
transient rates and provide additional meeting concessions.
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31.
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Use an RFP process for preferred ground transportation
providers
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By reviewing an organization's total ground
transportation spend, it will become obvious which cities and suppliers are
most frequently used. Go to RFP using
your total volume nationwide or by city, to obtain standard annual rates and
discounts, with the understanding that the sourcing team will always have the
right to continue negotiating once a meeting is on the calendar. Another
option is to negotiate some group movements with your preferred rental car
agency for improved discounts.
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32.
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Use an RFP process for preferred audio-visual
providers
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By reviewing an organization's total ground
transportation spend, it will become obvious which cities and suppliers are
most frequently used. Go to RFP using
your total volume nationwide or by city, to obtain standard annual rates and
discounts, with the understanding that the sourcing team will always have the
right to continue negotiating once a meeting is on the calendar. Another
option is to negotiate some group movements with your preferred rental car
agency for improved discounts.
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33.
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Use an RFP process for preferred meeting management
company providers
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By reviewing an organization's total spend with
external meeting sourcing, planning and management companies; it will become
obvious which suppliers are most frequently used. Go to RFP using your total volume to obtain
improved rates. It is important to
understand the 10 different pricing models that could be used with these
companies and which one would suit your organization best.
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34.
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Use an RFP process for preferred destination management
company providers
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By reviewing an organization's total destination
management company spend, it will become obvious which cities and suppliers
are most frequently used. Go to RFP
using your total volume nationwide or by city, to obtain standard annual
rates and discounts, with the understanding that the sourcing team will always
have the right to continue negotiating once a meeting is on the calendar.
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E.
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Planning
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Negotiate
pre-meeting and during meeting
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35.
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Negotiate pre-meeting and during meeting
These categories could also be included under "Sourcing"
however, for those organizations that separate hotel sourcing from planning
sourcing, Debi has categorized these planning suppliers separately.
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During the planning stages, negotiate improved rates
and concessions with the following:
- Hotels – even after the contract has been
signed, there are opportunities to negotiate for improved services or
reduction in prices based on factors that may occur at the meeting
- Ground transportation
- Audio-visual
- Meeting Planning Company
- Destination Management Company
- Décor
- Entertainment / Speakers / Facilitators
- Food and Beverage
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36.
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Buy vs. rent common AV equipment
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Many organizations will use their own AV equipment for
local meetings because buying and reusing is far cheaper than renting.
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37.
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Reduce F&B spend by Rebates through Dinova
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Restaurants through Dinova
By signing up with Dinova, meeting planners will
receive rebates back to their budgets or to another corporate budget by using
restaurants that are in the Dinova program.
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38.
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Reuse and go green
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Reuse, eliminate or make electronic- content, collateral, signs which
may cost more for the first meeting, but will return high valued savings
meeting after meeting
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F.
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Resource
Management
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Managing
the people involved with meetings
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39.
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Reduce quantity of resources / gain efficiencies
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Numerous ad-hoc planners are in place at most
organizations with administrative assistants, coordinators, and professional,
high-priced resources planning meetings.
With a resource analysis study, an organization often can reduce the
quantity of resources needed by removing the meeting planning tasks. Use
the right priced resources, in the right capacity, at the right time, in the
right location. Many companies are
using ad-hoc inexperienced people who perform a task in six hours sitting in
a high-priced office vs. using an experienced planner who can perform the
work in two hours in a low-priced, virtual location.
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40.
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Reduce duplication of effort
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Numerous ad-hoc planners spend many hours creating
Excel and Word forms, checklists, and other processes that could be
replicated throughout an organization.
Instead, each person often has their own method, thereby costing
hundreds of hours of resource time.
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41.
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Use the right ratio of onsite staff
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Use the right ratio of onsite planners to reduce
costs. For example, some organizations state that onsite planner assistance
may be requested if the meeting/event is over 100 attendees or for certain
types of meetings with less than 100 attendees. Or, the organization may use
a ratio of 1 onsite planner for every 50 attendees as a common metric; some
meetings/events require more or less onsite planners. Using common sense without over-resourcing,
use the meeting planner's guidance as to the right number of onsite staff,
recognizing that most meeting planners work 12-14 hour days onsite.
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42.
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Use local resources
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Use local travel directors (onsite staff) vs. paying
for meeting planners to travel to location.
However, some meeting planners that have been involved throughout the
planning stages are necessary to go onsite.
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G.
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Technology
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Automating
and using technology to streamline activities
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43.
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Automate tasks for improved efficiencies
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Automating tasks through the use of Meetings
Management Technology will:
- Improve pricing because of the historic data
available to support negotiations
- Reduce manual tasks by numerous resources
Many tasks may be automated. Some include:
- Approval of meetings through automated routing
- ERFPs provide automated negotiations for the
first round (professional sourcing staff still needed to continue
negotiations)
- Resource management / assigning staff to
meetings
- Estimated budgets through online calculators
- Compare all incoming RFPs (vs. inputting
everything into Excel)
- Manage attendees automatically
- Surveys
- Reconcile meeting expenses
- Report metrics
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44.
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Limit meeting management technologies
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Organizations should only allow one major meeting
management technology be used throughout the organization to save money and
strategically align the data captured within the tool. If another tool is used because of
functionality or another reason, then the data should be integrated into one
of the technologies or into a business intelligence system.
Debi has found multiple disparate technologies used in
hundreds of organizations that cost these firms millions of unnecessary
dollars.
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45.
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Integrate technologies for improved efficiencies
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Integrate the meeting management technology with the
online booking tool to automate arrivals / departure manifests. This will
reduce the time that planners need to compare travel manifests to attendee
lists, which often takes a long time.
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46.
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Integrate technologies for improved efficiencies
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Integrate the meeting management technology with the
learning management system to automate the transfer of information between a)
who is attending a learning program, b) who actually attended the program,
and c) who is allowed to obtain credits from attending the program.
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47.
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Integrate technologies for improved efficiencies
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Integrate the meeting management technology with the mobile
apps to automate the transfer to engagement metrics back into the meeting
management technology for reporting purposes.
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48.
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Integrate technologies for improved efficiencies
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Integrate the meeting management technology with the
enterprise resource planning technology to report meeting spend.
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49.
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Reduce costs of connectivity at meetings
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Consolidate IT connectivity of all meetings in hotels
and other venues. Many cost-reduction techniques are taking place today to
make connectivity more affordable.
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H.
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ROI,
ROO, ROE
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Measure
the value of your meeting
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50.
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Obtain the investment in a quantifiable deliverable
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Integrate the meeting management technology with the customer
relationship management technology to show the value that meetings with
clients have on the revenue received from those clients.
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51.
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Prove value by ensuring the meeting / event achieves
objectives using measurable metrics
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ROI can be measured and offer savings by:
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Meeting Purposes
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Savings Calculation
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Motivate Communicate
Educate
Generate Revenue
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Did the attendees do something as a result of the
meeting that would increase revenue or decrease costs?
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I.
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Payment
and Recovery
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Use
the right payment method, collect commissions, and reduce costs of invoices
by uncovering disputes
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52.
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Using point accruing corporate cards to pay for
meetings
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When
an organization allows its employees to collect membership rewards points on
the corporate card spend, and when the corporate cards are used to pay for
meetings, the organization pays for its level of participation in the point
program. As a result, the organization
pays the financial services company for
the membership rewards point earned by the person who uses the card to pay for
a meeting. And, the person usually
keeps the membership rewards points for personal gain. Savings can be recognized by paying for
meetings using a Meetings Card or P-Card.
Debi will show you how to calculate this savings.
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53.
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Using checks through Accounts Payable to pay for
meetings
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When the National Association of Purchasing Card Professionals (NAPCP)
analyzed the cost of the traditional purchase order process to that of the
purchasing card process, the estimated savings was $63.04 per transaction and
25 steps were eliminated in the process, which improved efficiency and sped
up supplier payments.
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54.
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Commissions received
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Hotels and other hospitality suppliers will offer
commissions on the rates, usually called commissionable rates. Sometimes, the commissionable rates and the
non-commissionable rates are the same, and it is possible to use the lowest
rate, yet still earn commissions, which are usually ten percent in the United
States in the hotel industry. To
collect commissions from hotels, airlines or other suppliers, it is usually
necessary to become a Corporate Travel Department (CTD), which can be done
through the Airline Reporting Corporation (ARC) at their website.
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55.
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Reduce or eliminate penalties
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Penalties are incurred by unfulfillment of the meeting
whether it be by a cancelled meeting or a meeting that failed to meet the
attendance requirements set forth in the contract (attrition). Many organizations incur these penalties
yet if the contract is written correctly, it is possible to reuse the money
paid (credits) for future meetings.
Too often, budget holders hoard these credits for their own use and
the credits expire.
It is also possible to Collaborate with external
partners to share and use penalty credits.
An example of a clause that may be listed in a policy
to share credits is:
"For penalties under $100,000, any meeting
sponsor within the organization may request use of the credit. Full credit will be given to the meeting
sponsor who uses the credit.
For penalties over $100,000, the original meeting
sponsor who incurred the penalty has a “right of first offer.” The meeting sponsor will have one week to
reschedule a meeting/event before the credit is made available to the rest of
the organization. The credit will be split between the original meeting sponsor
and the new meeting sponsor dependent on negotiations with the
supplier."
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56.
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Deposits
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Deposits should be avoided at all costs but many
suppliers require them. At a minimum,
do not pay deposits to preferred hotels and make that clause part of the
contract. Debi has saved thousands of
dollars for organizations by maintaining their money in the bank and
collecting interest when not paying deposits.
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57.
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Billing dispute recovery
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Studies show that a significant number of invoices (from
hotels and other suppliers) are inaccurate.
Yet, many invoices are undisputed and overpayments occur.
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58.
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Recover Value Added Taxes paid
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Meeting professionals and Finance are responsible for
obtaining the required documentation to reclaim Value Added Taxes (“VAT”)
when meetings/events are held in countries with VAT. This activity will
reclaim monies spent.
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59.
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Use of Meeting Planner Points
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While many organizations are not allowed to collect
any meeting planner points from hotels or other supplier due to perception
and ethics, some organization are allowed to collect these points.
A clause such as the following in the policy will
drive some site visit travel savings and maintain ethical responsibilities.
"Meeting planner points may be accepted and accumulated for site visits
or other business related travel. Meeting planner points may never be used
for personal travel or services.
Should meeting planner points be used for personal travel or services,
the staff member is expected to reimburse the organization for the value of
the points. "
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J.
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Supplier
Relationship Management
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Oversight
and two-way mutually beneficial supply chain relationships to maximize value
and competitive advantage
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60.
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Supplier risk-based SLA recovery
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When an organization uses risk-based Service Level
Agreements (SLA) and if the supplier does not perform as defined by the Key
Performance Indicators (KPIs) in the SLA, then the organization is entitled
to credits.
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61.
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Suppliers managing suppliers; transparency in pricing
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When one supplier oversees another supplier's service,
the organization may learn from the one of the suppliers that the other is
over-charging for services. This model may encourage more transparency in
pricing and the suppliers may keep each other honest in oversight and billing
for services.
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K.
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Forensics
and Fraud
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Use forensic practices to
uncover fraud
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62.
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Audit records and encourage staff/suppliers to be
aware of, and uncover
fraudulent activities
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Fraud is prevalent in meetings and events with cases
such as fraudulent expense reports (whereby meeting attendees may be
expensing items that were paid for by meeting budgets), and billing fraud (whereby
an employee creates a shell company and bills employer for services not
actually rendered).
According to the Association of Certified Fraud
Examiners, and as reported in their 2012 Report, fraudulent billing and
expense reimbursements cause significant financial loss. Based on 1,388 cases of occupational fraud
that were reported by Certified Fraud Examiners who investigated them,
fraudulent billing resulted in 346 cases or 24.9% of all cases with a median
loss of $100,000 and expense reimbursements resulted in 201 cases or 14.5% of
all cases with a median loss of $26,000.
Debi has uncovered thousands of dollars of savings from
the findings of numerous fraud cases through forensic research into supplier
billings and expense report review.
An example of a policy clause to reduce the double
expensing fraud would be: "Shuttle
services are commonly used for meetings/events. When shuttle services are
used, car services, taxis or other transportation modes are not reimbursable."
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