Shifting Hotel Commissions & Strategic Meetings Management Structures

Genentech’s Amy Perrone, Cisco’s Carolyn Pund and Shire’s Monica Dickenson spoke with BTN editor-in-chief Elizabeth West.

BTN: Tell me how your meetings program is structured.

Perrone: I was originally hired to implement our meetings management tool and train users throughout the company to input their meetings and data, which I did. Doing that led to the development of our SMM program. We have an internal meetings department that works in conjunction with a third-party logistics provider for larger, more complex meetings. Genentech also has about 600 people throughout the company who plan occasional, simple meetings. A team of five from BCD M&E supports these. If you’re a Genentech employee, you have to go to the meetings team or the BCD team. You can’t do it on your own.

BTN: Are Cisco and Shire models similar?

Pund: Each one of our three region managers and India country manager are Cisco full-time employees who lead outsourced managed service teams. We offer venue search, sourcing and contracting, housing and room block management, planning and logistics, one-on-one executive management, program site delivery, event apps, surveys ... everything related to logistical event operation and technology. It’s a global standard because of [information security] and other requirements. About 11,000 meetings were registered in Cisco’s events portal last year. We touched about 4,000. There are many [small meetings] where an admin does an offsite but doesn’t need services. Those still must be registered for overall governance, budgeting and visibility.

Dickenson: We have business partners that are either in other regions or other lines of business. The line-of-business leads don’t report into the global meetings and events team, but their meetings are governed by the policy we manage. They are our key stakeholders and our customers. We also have local-country event planners who don’t report into either one of those groups. In terms of outsourced partners, we have three certified, global providers that can work across all lines of business and are managed directly by my global team. One provides sourcing and meetings logistics. Any meetings that require venue sourcing are routed through that organization, but we also have two other providers only for planning services. These can take over after sourcing is completed. International is broader in scope and includes a second tier of preferred suppliers.

BTN: Outsourcing isn’t required for meetings management, but clearly there are advantages.

Pund: In a managed service model, we buy the services needed to expand and contract resources at any given time. Per meeting, decisions about resources to provide—and whether those are internal or external—is largely driven by the meeting budget. If it’s simple, it’s going to be done by an admin. If they need some level of technology, maybe it’s the admin plus our internal team services. If it’s slightly larger, it could be a professional program manager using all our outsourced services. If it’s our mega customer conference or global sales meeting, you’re talking about working with a major agency partner.

Perrone: Genentech doesn’t want to be in the business of planning meetings. That’s not our mission. We research and make medicines that are going to be life saving or life extending. Anything beyond that focus is not our core business.

Dickenson: I agree. Outsourced support is vital. It allows us to maximize our existing resources and to help our employees be more efficient, compliant and effective in their core roles.

BTN: If companies don’t want to support, how do meetings leaders fund SMM programs?

Dickenson: You do have to really sell [regulatory, data security and risk mitigation factors] to executive leadership. They still may not want to give meetings leaders a budget, and that can make things really challenging. It forces strategic meetings managers to be very tenacious in their approach, not just in how to fund the program but also in how to provide a high level of service.

Perrone: I’ve had budget to run my program from the beginning. We didn’t know exactly how many meetings we were going to support, but we knew there were a lot and it was worth investing in. 

BTN: Do you rely on hotel commissions payments for funding, then?

Perrone: Commissions offset our costs.

Dickenson: Same here. It helps us drive policy, program adoption and market share to our preferred hotels as well as generate savings which further adds to our ROI.

Pund: We are a self-funded meetings program. Because of funding from hotel commissions, we are able to offer lower pricing in our service costs, which allows our internal team a value proposition compared to external agencies. There are clearly other benefits of having internal services: They’re behind the firewall, they’re completely conversant with policy, compliant to Cisco’s financial and reporting requirements, information security and data privacy requirements, etc.  

BTN: In the current environment, with Marriott, Hilton and IHG reducing commissions to 7 percent, do you foresee changes in your preferred relationships to maintain current funding levels and program structure?

Pund: Yes. We have increased our [number of] preferred partners. Our SMM sourcing team is the function that drives business to our preferreds, and commissions contribute to funding them. Without that team in place, the preference and advocacy is lost. 

Perrone: My conversation with the brands that have taken a hard stance on commissions is that they spend fewer resources selling to us because we have SMM programs in place. If they reduce the commissions and theoretically defund our SMM program, how many salespeople will they have to deploy against our company to target our 600 admins who plan two small meetings a year?

Dickenson: The relationship with our hotel partners is at the SMM level. Our policies and processes drive the business to their brands. I’m not sure the hotels understand this. For example, hotels market to our stakeholders and they think they win that business, but the person isn’t authorized to signing anything. They could do all the work and realize they just wasted their time. This is not a good use of anyone’s resources. SMM helps mitigate this.

BTN: Will commission become a negotiation?

Pund: It already has. There are hotel owners and property managers saying they aren’t going to lose an important piece of business over this and they will either go ahead and give the commission or find other ways to offset costs. I think there needs to be flexibility with this commissions question in order to win the business, not just hard and fast mandates.