The Next Big Thing in SMMP: The Unlikely Marriage of Event Marketers and Procurement
By: Eric Olson, General Manager
Active Network, Business Solutions
As meetings and event stereotypes go, there are two that have stood the test of time. Event marketing teams love to spend money; procurement teams love to save it.
So when Dell’s Global Events Marketing Director, Liz Lathan took the stage beside Strategic Meetings Management guru, Kevin Iwamoto at PCMA’s Education Conference in June, one might have expected sparks to fly.
Yet, the inevitable disagreement never materialized. Instead, the two laid out a vision for a new partnership between spend-happy marketers and their spend management focused procurement colleagues. And as shocking as the thought might be, this unlikely marriage may be exactly what the meetings and events industry needs to survive and thrive.
A Cost Crisis in Meetings & Events
The challenges of today’s meetings and event professionals have been well documented. Budgets have been cut. Results are under a microscope. And the demands of a younger, technology-addicted generation are putting pressure on age-old ideas of what a meeting or event should be. Yet, at the same time, there is another crisis emerging, according to Iwamoto. The cost of hosting events is rising quicker than the elevators in a high-rise hotel. Demand for meeting space is outpacing venue and hotel supply while travel costs are skyrocketing with the price of fuel.
“At any given time, management is going to say, ‘our cost of doing business is really high, we need to do something about this.’…And you need to have a plan in place to be proactive and not reactive…”
As a result, Iwamoto continued, something strange is happening. Event planners are turning to procurement for help in three key areas:
- Planners are working with procurement to create and monitor meetings policies and handle contract administration.
- Procurement is assisting with cost avoidance, providing visibility into spend so planners know where they can cut unnecessary costs, consolidate their supplier base and senior management can get spend transparency.
- And the two groups are teaming up to drive cost savings through smarter buying processes and more savvy negotiations.
In return, event organizers are creating better ways to drive results from meetings – delivering revenue from customers and improving performance of employees.
A Success Story at Dell Computers
Nowhere is this new partnership more apparent than in Dell’s newly launched Strategic Meetings Management Program (SMMP). In fact, the event marketing group actually pitched the office of the CFO on the idea for its program, claiming it could save more than $2 million a year.
Three weeks into Dell’s successful phase one roll out in America and Europe, Lathan admits, however, that the now-happy marriage to procurement wasn’t always friendly.
“Procurement first came to us a couple years ago and said ‘we want an SMMP.’ We told them to leave us alone. But, we did the RFP, we collected the responses and the end result was an excel spreadsheet that, when printed, was 6 feet tall by 7 feet wide. We looked at it, we laughed, we put it in the closet and cancelled SMMP.”
So, how did Dell achieve quick adoption of its latest attempt at SMMP? - Dell’s program took less than six months to implement fully on two continents.
It started with documenting three key things, according to Lathan.
- The Goal: The goal of the program was to track, not to govern, meaning Dell would aim to empower planners instead of restricting them.
- The Owner: Lathan and her team clearly outlined a partnership: Procurement would oversee contracting. Event marketing would own the events.
- The Funding: In alignment with the overall goal to drive savings, the funding, came from the program using a commission system based on measured savings. They would pay for the program based on actual savings.
Even with these clear guideposts, though, there were concerns. Planners worried that they would be forced to pick the lowest-priced option, denigrating the quality of their events and that the new program would slow things down and potentially damage relationships.
Early results have proven that those fears were unfounded, but Lathan credits that success to an approach that included three important tenants:
- The team agreed to some flexibility on the mandate, allowing for the continued use of 3rd parties in some areas.
- The program was set up in two phases, including a one-year pilot and a 2-year program with their SMMP vendor to allow for a hands-on approach to change management.
- Finally, the team agreed to roll out the program in phases by geography, starting with North America.
“We knew it wasn’t going to be easy. Change management is the hardest piece. We told people, It doesn’t mean that we can’t talk to our (hotel vendor) anymore. Just make sure it’s attached to the program so we can track and generate savings.”
And those saving were impressive. Early results, just months into their new SMMP, show 8% year-over-year savings on food and beverage and a stunning 25% savings on room nights.
According to Iwamoto, the results were only possible because of Dell’s smart approach to the planning process and the roll out. He recommends three things to planners considering an SMMP.
- Find a strong executive sponsor — something Lathan says she did from the start with Dell’s CFO. “By having someone way up high waving the flag on savings, we were able to attach our program to it.”
- Establish visibility into meetings spend and activity. The first step, Iwamoto said, is simply understand what you’re spending today.
- Build a business case. Remember Lathan’s plan to save $2M? Well, too few planners take on the diligence to build a business case, and set goals and targets required to get buy in across the organization.
Most importantly, though is stake holder management, and Iwamoto recommends knowing the motivations of all the stakeholders in the organization, something he calls “WIIFM” or “what’s in it for me?”
“If you methodically map out who your stake holders are and what their respective WIIFMs are, you’ll come up with a plan that makes them happy and gets buy in.”
If you’re considering a SMMP for your organization click here to unlock the ‘ Seven Step Guide to Initiate a Strategic Meetings Management Program’
Eric is responsible for driving global sales and operations for Active Network Business Solutions. Before joining Active Network, Eric was Vice President of Marketing and Media for a prominent education provider, specializing in online courses, virtual events and live conferences. In seven years he grew the company’s annual revenues from less than $10 million to more than $140 million, primarily through the expansion of its events portfolio.
This is a great article – great story, well told, with wonderful implications. I think it’s important the event dept. owns the events and the goal was tracking, not governing. We event marketers have gotten the message, but it’s reassuring procurement acknowledges that event marketing is not optional.
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