. How to Negotiate With Anyone | Successful Meetings

How to Negotiate With Anyone

Knowing what you need from other suppliers is key to a successful meeting

8-10 Joan Eisenstodt

When it comes to creating a successful meeting or event, there's no denying that the most important factor is the host hotel, or, in the case of very large meetings and events, the convention center. That's why so many planners pay a great deal of attention to the negotiations and contracts they arrange and sign with these two key partners. But there are many other suppliers whom planners rely on to make sure the goals of the event are met, that attendees and executives running the meeting are happy, and that everything goes smoothly.

The destination management companies (DMCs), transportation suppliers, off-site venues, A/V firms and other partners are vital to the success of any meeting or event, but many planners -- particularly overworked corporate planners who may have other responsibilities as well -- often treat these partners as an afterthought. And that's a mistake.

"I think, a lot of times, people don't realize that they need to make sure they pay as much attention to the details with all other vendor contracts as they do with hotels and convention center contracts," says Sharmagne Taylor, CMP, president, and CEO of Houston-based meeting planning firm On-Site Partners. "There is a much greater risk of failure to deliver on the side of outside vendors than there is with what's happening in the hotel itself and in the convention center. Make sure that you are just as diligent about talking about everything that could possibly happen, positively or negatively, with those vendors."

She's not the only experienced professional planner who feels this way. "Many organizations don't do the same kind of thorough request for proposal [RFP] for the other vendors and services as they do for hotels," says Joan Eisenstodt, president of Washington, D.C.-based Eisenstodt Associates, who teaches contract negotiation classes for planners. "It's often sort of an afterthought, especially for smaller meetings."

The problem with this, Eisenstodt says, is that "the proposals that come from these other vendors -- from DMCs, transportation providers, A/V companies, production companies, and even some from decorators -- are, in my opinion, pure marketing pieces. It's a lot of copy without substance. It's more, 'These are all the things we can do. Sign this and we'll sort of figure it out later.' I'm appalled by that."


Budget Busters
It's not just a risk of the meeting failing to achieve its objectives, Taylor adds, noting that the smaller partners can still have a big impact on the budget. She points back to the experience of a client she had to drop a few years ago, when a parent's long-term illness forced her to cut back on work. Instead of replacing Taylor, the client just planned and managed the event on its own.

"They went $100,000 over budget on the event that I planned the previous two years," she says. "They didn't know what questions to ask, and they didn't monitor the things that I would normally monitor as a professional."

What happened, Taylor explains, wasn't caused by one big problem, but by dealing with seemingly small changes with suppliers, without knowing what to ask. "You know how much the hotel is going to charge, and you know what your [room-night and food and beverage] minimums are," she says. "It's delivery charges, setup charges, or rush charges, those kinds of things. They creep up into thousands of dollars when you don't know what to ask for when a change happens."

One example Taylor gives is that her former client planned a dinner at the hotel for 1,000 that jumped to 1,500, so they just told the outside decorator to add more tablecloths. "Being an event professional I know to ask the hotel to provide linens in this color," Taylor says. "They'll blend with the other 1,000 and you're already at budget on the linens."

One reason these secondary suppliers get short shrift in negotiations, Eisenstodt adds, is simply that meeting planners are busy, and many don't know what they don't know.

"When I look at my checklist for hotels, it's no different, in many ways, than what I do with these other vendors," Eisenstodt says. "In a hotel contract, planners get very specific about amenities, for example. Why would you not get specific about the services you're going to get from a DMC? If they're providing food, I want to talk about food safety and put that in there, even if they're subcontracting it. If they're bringing in décor, I want to know everything about the décor. What's it going to cost us? When will it be loaded in [to the facility]? When will it be loaded out?"

The flip side of course, is that suppliers need details if they're going to give the planner detailed bids and negotiate a detailed contract. "The onus is on us to provide them that look into what the program is," says Joanie Miskowiec Phillips, director, purchasing and industry relations, of Minneapolis-based MotivAction, a meeting and incentive planning firm. "What is the client trying to accomplish? It's looking at the event as a whole and really giving [suppliers] enough information so that they can give us good information back. When you talk to a lot of suppliers and partners, what you often [hear] is, 'If you can tell more information we can target your proposal a lot better.'"

This is particularly an issue when dealing with corporate meeting planners who are new to the job, or who also have other responsibilities, says Patrick Sullivan, president of Allied PRA New York, a DMC.  

"It's a big responsibility when your director or your CEO tells you, 'Go out and put this meeting together and bring me cost.' That planner doesn't know to ask, 'Well, what is our budget?' That's the No. 1 thing -- most of them come to the table without even knowing what they can spend," Sullivan says. "Then they want the five-star restaurants and all the beauty and creativity, and when you send [the cost breakdown] to them they say, 'Oh my God, that's so expensive,' and then, 'I presented it to the director and it's just way out of line.' That's why it's important that planners get the other meeting stakeholders thinking about the budget from the very beginning."


Destination Management Companies
When it comes to non-hotel supplier negotiations, there is no more important partner that the DMC, both because most planners consider the DMC their feet on the ground and because, many times, planners rely on DMCs to hire other suppliers such as transportation and catering firms.

 

"We are very stringent with them because the DMC is responsible for the transfers. They're responsible for activities. They've got so many touch points with the attendees," says Julie Benson, director, business planning & procurement, of Minneapolis-based Aimia, a major meeting and engagement firm. "There are times when we're going to need to bring in a major speaker, so we'll have to work with a speaker's bureau, or an entertainment broker to bring in major entertainers that a local DMC wouldn't be privy to. [But] the DMC is our local supplier that's in the destination."

In the majority of cases, the DMC is a full-service provider, agrees Rebecca Jones, director, industry relations, of Chicago-based BCD Meetings & Events.

"The DMC and the planner partner together and really create the structure of the program," says Jones. "What the DMC does with it can truly enhance the experience, from creating activities that match the demographic and the price point you're looking for, to creating the evening events that reflect what you're trying to accomplish."

For all that, what planners want and need most from DMCs is not creativity, but liability -- specifically, liability insurance.

For most clients, the primary "role of the DMC is to make sure that all the insurance and the liability coverage is there," says Sullivan. "Everybody wants to protect themselves."

Benson agrees. "We do rely on our DMCs to make sure that that's in place, and they warrant it in the contract," she says. As a result, she adds, the contract terms Aimia negotiates with DMCs are far more stringent and detailed than they are with other suppliers. "If we go to a florist, let's say, we make sure the insurance and indemnification are there, and the terms of service is completely defined," Benson says. "That's pretty much it."

What is not in the contract is the ability of DMCs to get flexibility from other third-party suppliers in the event of attrition or cancellation, Sullivan says. Yet after liability insurance concerns, it is one of the top issues for the planners.

"If the numbers go up, there's never a problem with that, but if the numbers go down, clients want to know, 'Is there a little bit of flexibility?'" says Sullivan. "DMCs work with a lot of the same suppliers over and over, so they do build that flexibility. It's not in the contract. It's really more of a partnership."

The amount of lead time is also a factor, Sullivan says. Like hotels, he notes, if suppliers can resell what was contracted or haven't racked up hard costs -- buying food or contracting with freelance staffers, for example -- they will often cut planners a break to build goodwill with a DMC that has been a good partner to them.

This is something planners should ask about when negotiating with a DMC and approving the third parties it recommends, Sullivan says. "The loyalty factor is, 'Have you worked with this venue many times previously? Were they exceptional? Were they flexible?" he says. "I think clients don't necessarily want to ask the hard questions … [but they] should, even if they have to ask the supplier directly. 'Is there some flexibility in your agreement if there's a terrible storm and my guests can't get in and we have to cancel the evening event?' Ask some tough questions up front."


Off-Site Venues
The broadest category of meeting suppliers, off-site venues include everything from small restaurants used for dine-arounds, to giant theme parks, museums, and other public spaces, to stand-alone catering halls and conference centers. All have their own issues that must be considered during negotiations, which is one reason why many planners contract for venues through DMCs.

"I've done a lot of dine-arounds for broker-dealer meetings in the insurance industry," Taylor says. "You want to make sure that you have looked at the entire process, from the time that the people board the buses to their likely behavior once they get there, to when they return. For example, if the restaurants are closed for your event, then obviously when it's over everybody is going to get back on the bus and go back to the hotel. But if you go [to a nightclub] on a night when it is open to the public and reserve it for two hours, you may have to negotiate for the attendees to stay and party at no additional cover charge."

When working with public spaces and museums, Eisenstodt says, it's vital to ensure that you are aware of the special restrictions they may have. These can range from a ban on red wine (and its potential for stain) by many museums to an inability to close early to allow for event set-up. And many require reciprocal liability insurance from the renter to cover potential damage to exhibits, Benson adds.

Then there's access. In 2012, Taylor brought a group to the Denver Museum of Nature & Science, but discovered that entrance to a popular Pompeii exhibit, which attendees expected to see, was not included in the rental fee. "When we rent out theme parks, sometimes the rides are included and sometimes you have to pay extra for certain rides or attractions," she adds.

Standalone conference facilities, on the other hand, are like DMCs and hotels in wanting to know the context, strategy, and desired outcomes of the meeting, says Christopher Kelly, president and co-founder of Convene, which has five custom-built day conference centers in New York and one in Washington, D.C.

"If the client can help us to understand at a higher level what they're trying to achieve, then we can have a conversation that's about more than tables, chairs, and square footage," Kelly says. It's also important to understand the difference between a conference facility and a hotel, he says, pointing especially to technology that wouldn't come standard anywhere else, such as built-in videoconferencing equipment.

"I don't think there's anything that has the ability to shape the outcome of their event more than the stability of the technology," Kelly says. "We find the large majority of planners are not asking detailed questions about the [available Wi-Fi] bandwidth and the venue's ability to effectively distribute and deploy that bandwidth to the devices in the room. I think that's a major oversight. If you don't have the right distribution, it's like putting a fire hose to a garden hose -- it just doesn't come out the end."



Transportation
Getting people to and from the airport or from the hotel to off-site venues and events is something that planners either negotiate and arrange themselves, or assign to DMCs on a roughly 50-50 basis, Sullivan says.

Either way, it is something that planners shouldn't cut corners on, the experts agree. One reason is the impact it can have on attendees' satisfaction with the event, right from the start. Most people have come to expect and accept that flying will be unpleasant. But add in a bad airport transfer, and frustrations can boil over.

"If you can get them in smoothly and they have a good arrival, that program's going to sing, because everybody will have a good attitude," says Sullivan. "Why try to save a dollar and end up getting bad attitude from the attendees?"

But beyond that, working with transportation suppliers requires a lot of negotiations about issues ranging from safety to quality.  Safety is, of course, paramount and it involves a lot more than liability insurance. Among the questions planners should ask -- and insist be written into the contract -- Eisenstodt says, are: "Where did the buses come from? Do you own the buses? How are they inspected? When were they last inspected? What's their safety record? Are the drivers employees of your company? Are they subcontracted? How are they covered by insurance? How are they trained? Are they alcohol and drug tested?"

Beyond that, it's vital to ensure that you know what is included in each transportation company's quote, Jones says. For all but the smallest groups, you want a dispatcher organizing transfers and handling changes or unexpected delays. "Is there a flat fee per person or per vehicle to go from the airport to the hotel, or is it per-hour?" she adds. "Does it include the pre- and post- hours the car needs to go back where it came from?"

If it's a large group or there is another big group in town, and you can't get enough local bus drivers who know the area, it's often worth going through a DMC and putting a staffer with that knowledge on the bus, Taylor says.

That's a service Sullivan always recommends. "The driver's job is to get [the attendees] there and get them back, and the guide's responsibility is to give the driver a little help with directions if needed, but also to work with the people and say, "You know, I'm sorry for the traffic. It's just like when people are on a plane -- when they don't hear anything, people get upset."


A/V and Entertainment Providers
When it comes to negotiating for A/V, the first thing planners must do is understand their needs, Jones says. "There is a difference between A/V partners and full-service audio-visual production organizations," she notes. "If you have multiple speakers, if you have keynotes, or if you have several executives doing presentations, do you need somebody to manage all that? Or do you just need a screen and a projector? If you have 50 break-outs to run, you need somebody who's really, really good in that element."

 

A/V is another field in which planners need to beware of proposals that are more like option lists than an enumeration of what equipment, staff, and expertise they will actually receive, says Eisenstodt. "There's labor involved, there's equipment, there's knowledge of equipment, and the ability to work with speakers who aren't as experienced," she says. "To me, those are all things that you've got to cover. I think planners and organizations get so hung up on negotiating price that they forget about the service side. Sometimes, the bottom line is deceptive."

If an A/V company says it has offices all over, you need to ask if they subcontract the labor and equipment, Eisenstodt says. Other questions to ask include whether the hotel or venue will charge for equipment storage, or impose a fee for bringing in an outside A/V company because they have an in-house provider.

Those aren't the only reasons why that A/V negotiations should include cross-referencing with the hotel or venue. "When you're dealing with entertainment, A/V production, and lighting, you've got to make sure they don't step on each other as far as timing for load-in and load-out," says Jones. "That can create big issues, especially if you have big-name entertainment or a bigger group to entertain."

And that isn't the only logistical issue with these suppliers, Jones adds. "My husband is a professional musician and he's got a pretty large band," says Jones. "They're often fighting with the catering team because they want to bring in their stuff at the same time -- setting up their staging and all that. It's really the key to have the timing in place and making sure they don't step on each other."

As for the entertainers, it's also vital to ensure they understand the nature of the event, Jones notes. "During dinner they have to be a little bit more low-key," she says. "Once people are done with dinner and [want to] go out and dance, you can kick in the live music. When it's a networking event and you have a 10-piece band blasting at you and you're trying to scream over them, the intent of the event can get a little lost."


Remember to Ask
One point Eisenstodt emphasizes is that planners shouldn't be afraid to say when they don't know something. "I remember when I did my first Washington, D.C., meeting," Eisenstodt says. "I had planned events, but not like that. I went to the hotel and I said to the salesperson and the convention service manager, 'Look, I'm new at this. I need you to tell me when I'm not asking the right questions.' People appreciate that."

That's especially true for associations and even companies in which people with other job responsibilities also plan events, she adds. "I don't expect them to know all this," Eisenstodt says. "It's not their full-time job. But they have to find a comfort level in saying, 'Please teach me.'"

At the same time, she adds, suppliers need to be better about not assuming planners know all the ins and outs of their pricing models.

"I'd like to believe people don't intentionally hide conditions and prices," Eisenstodt says. "They don't bother to say it because they figure, 'Well, if I know it, you know it.' Both sides need to be more transparent in how we operate."



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This article appears in the September 2015 issue of Successful Meetings.