Contract Mandate Yields Cost Savings on Meetings

Marshall, Minn. — A mandated corporate meetings policy that controls contract-signing authority and appropriates earned planner points into company coffers has saved 15 percent of meetings spending for Schwan Food Co.

And with a meetings technology tool now in place, the company's meeting manager aims to further consolidate data and drive savings.

Through the policy, which was mandated in November 2005, the company last year saved or avoided $750,000 in meetings spend, said Cheryl Hoffard, manager of meeting services. In attrition-charge avoidance alone, the company saved $43,000 by pushing a rebooking clause in a standard addendum developed with the help of Schwan's legal department.

"We're streamlining the entire process of meetings, when before you had one person doing the contract and then another do the air and another do the transportation and everyone was doing it a different way," Hoffard said. "It is now all done within meeting services and we are the first point of contact for meetings."

The company's U.S. air volume was a little less than $10 million in 2005, when 89 meetings were managed by the department, ranging from five to 500 attendees. Schwan delivers pizza, casseroles, ice cream and other frozen foods to homes.

The meetings department goes over every line in meetings contracts, substituting Schwan-approved addenda when the contract falls short. "Most of the hotel contracts we receive are different," Hoffard said. "Some are just a few pages and some are up to 13 pages. We read every contract and add our clauses to protect our company. We also work very closely with our legal department if we come upon some contract verbiage we do not understand."

Though attrition cannot be eliminated, Hoffard is seeking to extend the amount of time allowed for rebooking a canceled event to reduce penalties. Preferred transient hotels are used for meetings whenever possible, and this year the department plans to form a preferred vendor list of meetings-appropriate hotels.

The company also has begun to implement meetings technology products purchased at the end of 2004 from Santa Clara, Calif.-based OnVantage Inc.

"It would be very hard if you started a meetings program without some type of technology. We had so many spreadsheets all over the place," she said. "The new meeting software programs today can really save a meeting planner time."

A consequence for going against company mandate has not yet been set, while Hoffard's department works to educate company employees on the new policy. As the policy was implemented, employees were required to give up their earned planner points from hotels. Hoffard said she became used to turf battles as a travel manager, when she enforced a company policy to collect employees' frequent flyer miles earned on business trips from airlines.

After a $25,000 attrition fee was charged to the company in 2002, the need to manage corporate meetings became clear, she said. Hoffard spent the next months trying to track the company's meeting spend through the accounts payable department, credit card provider and corporate travel department. At that time, meetings management was a "free-for-all" with administrative assistants signing contracts, no policy and no central data collection.

"After I found out about the attrition payout, I started to compile our company-estimated meeting spend through our accounts payable department, corporate credit card and anywhere I could get my hands on the figures. It was just an estimate but an eye-opener," Hoffard said.

With approval from senior management, Hoffard put together a meeting policy recommending the use of the new meetings department for all events.

"My first goal was to build the trust of our administrative assistants," she said. "They hold a tight rein on their meetings and many times find it a fun part of their responsibilities."