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 party company.

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," says Anderson.

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," says Anderson.

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.