Working With Third Parties
Due to reduced staffs and a chronically flat
economy, many organizations are turning to third party services
to help manage and implement their meeting strategies. Finding
the right fit is the key to forging a successful partnership.
In this article, Crystal Anderson, CMP, marketing events
manager for Louisville, CO-based GHX, a health care-technology
company, and Walt E. Galanty, Jr., president and CEO of
Alexandria, VA-based AIM Meetings & Events provide their
perspectives on how to vett third-party planning companies, and
how to partner successfully once you've found the right match.
Finding a Partner
As the former executive director of an international trade
association for 16 years, before leaving in 1991 to launch his
own independent meeting planning company, Galanty - whose AIM
Meetings & Events executes more than 130 events a year -
has an insider's perspective on what meeting planners are
looking for when they turn to a third-party provider. He shares
his experience on what questions to ask when seeking a third
Not all third parties are alike, so start by getting some
background on the company, Galanty advises. "You have to ask a
lot of hard questions," he says. "Find out who their clients
are and how long they have worked with their accounts.
Specifically, determine if they work mostly with association or
corporate clients; the typical size of the meetings they
handle; and what kinds of services they offer that might
dovetail with what you are trying to accomplish."
According to Galanty, it's also important to know if they have
a bricks-and-mortar operation. "It's not that I think everyone
has to have an actual office to go to, but it is an indicator
of how established a company is. If you have a headquarters
with staff, chances are you are not going away for a while, and
you have some solid clientele," he says.
On pricing, what you pay will depend on the service. Planners
who are looking for site selection services will not pay
anything. The third party is compensated by the hotel to whom
the business ends up getting sourced. Typically, that is a 10
percent commission. Galanty says that some companies charge by
the hour, based on the services provided and the manpower hours
it will take to get the job done. If they have to travel to
conduct site inspections, negotiate contracts, handle housing,
registration, and be the on-site management, all that will
factor into the fee.
"At AIM, each client's fee structure is different. But,
typically our fee is based on how long it will take to complete
the task, from planning and execution to signing off on the
master bill," says Galanty. "Because we are providing
full-service meeting management for most of our clients, which
are typically 80-percent association, we like to bundle our
services. It gives us an opportunity to receive a percentage of
the meeting's financial success. For example, if we are asked
to sell sponsorships for an event, as well as promote the
meeting to new attendees, then we negotiate an additional fee
that would be based on the income generated by those services."
Consider the size of the company. The bigger its buying power,
the greater its leverage with hotel vendors, CVBs, destination
management companies, etc., at the negotiation table. Also,
what percentage of its clients are repeat business?
"Association clients tend to be very loyal, because when you
are working with an association, and they have taken the time
to vet you, which takes much longer than other clients, they
want to keep working with you because the learning curve can be
steep," says Galanty. "Check references, just like you would
for a new hire. There are no standards or qualifications to be
an independent meeting planning company. At AIM, we have a
30-point questionnaire that we ask our new clients, because we
need to right-size their meetings, in order to deliver their
goals and meeting objectives. I think meeting planners should
take the same approach."
Making the Most of the Partnership
In a typical year, Crystal Anderson, CMP, of GHX, plans and
executes dozens of meetings across the country, from an
800-person annual event to on-the-fly meetings for several
dozen executives at a moment's notice. To get it all
accomplished, she relies heavily on her third-party provider,
Melissa Ronacher, vice president of global accounts at
Scottsdale, AZ-based ConferenceDirect. Contract management is a
core competency of third party planning companies. In 2009,
when everything went bust, Anderson was suddenly swamped
working on reducing GHX's 2010 room blocks to account for the
attrition they expected. Ronacher helped untangle the mess. "I
regularly revisit contracts for future events and adjust where
we need to. There can be five or six renditions of a contract,"
Third parties will have data on what other clients in their
network have done to approach a variety of meeting situations.
"Because they track trends, like hotel rates and development,
it helps me stay on top of what's going on in the industry,"
Every year ConferenceDirect holds an event they call Industry
Insights, where industry experts speak on different topics and
issues. "As far as I am concerned, it is the most valuable
educational event that I attend. I've never missed one in the
last three years," says Anderson. "It's a day where you get
really tangible, in-depth information that you can use. Like,
what the hotel community looks like in terms of pricing
projections and new-build, things like that."
That's the kind of information that a third-party partner can
provide a planner that will help her keep her finger on the
pulse of the hospitality community all year.