Published in September 2006 in Training Magazine
Each year Minneapolis-based Cargill, an international provider of food, agricultural and risk management products and services, signs contracts with certain vendors to house upcoming programs. "We may not necessarily guarantee an exact amount of business," says worldwide travel service manager Lisa Kermode, "but we will make them a preferred supplier where they get first [opportunity] to bid on the business." She says the company may save approximately 20 to 30 percent on costs by entering into such agreements with venues.
Entering into a long-term agreement with a venue really is worthwhile, says Jeff Weggeman, vice president of sales and marketing for Philadelphia-based Aramark Harrison Lodging, an owner of conference centers, corporate training centers and specialty hotels. "They're looking for longer-out buys on multiple properties, so they can secure their demand before the properties sell out," he says of the training executives, chief learning officers and human resources directors he works with. "These meeting planners, from a training perspective, are saying, '[Since] I've got the demand, let me single-source it to somebody who understands our needs, who can deliver the service product we want, and we can sign early with them." Volume discounts can also be a perk of this arrangement, Weggeman points out, adding this can work well for trainers because training events are typically held all year long, not just during peak dates.
This way, companies can be rewarded for scheduling meetings during slow times of the year. Contracting with Aramark, for example, to hold a set number of events at one of its facilities, including during "soft" seasons, could save at least 10 percent on cost, he says.
The definition of "long-term" changes from year to year. Five years ago, "long-term" meant three years, but "last year, long-term was four months," Weggeman says. These days, he notes, Aramark is seeing contracts of one to two years.
Just as compelling as the price savings is the higher quality you get working with a venue that's already acquainted with how your company operates, Weggeman stresses. "When we start to understand what your business purpose is, and we start to do your training meetings as a brand, we start to know what's important to you, what your hot buttons are, what's worked toward your productivity goals," he says. "The return on the objective of the training is much better."