aka independent planning companies, continue to be a major force in the meetings industry as corporate and association planners -- strapped for time, personnel or resources -- seek their help with everything from site selection to turnkey event management.
But some planners are wary of outsourcing parts of their job to an independent contractor. Among common qualms are that third parties might threaten planners' jobs; the commissions hotels pay ultimately jack up the room rate; and it can be difficult to find a trustworthy partner who fits a planner's needs.
These issues were among topics M&C
discussed in a recent chat with two third-party professionals -- Jeff Sacks, CMP, vice president, association strategic account management, for Twinsburg, Ohio-based Experient, one of the largest firms in the business, and Tony Cummins, CMP, CMM, owner and director of The Meeting Department, a small Dallas-based consultancy.
Following are highlights of that discussion. (To view the free webcast, "Should You Use a Third-Party Planner?" and earn CIC credit, click here
> What do you tell planners who worry that hiring a third party reflects poorly on their competence or value?Sacks:
We have been having this conversation with clients since my first day in the business. My advice is to have a conversation with management about what your competencies are and what else could you accomplish if you outsourced some of your workload. When you outsource, it allows you to work on the stuff you want to get off your desk and get on to the other things you need to do.
On the association side, for example, it allows the team to spend time with other elements of an event, like content, speakers, etc., rather than worry about booking hotels or hiring suppliers. > Hotels pay third parties a commission. Is the client ultimately paying higher room rates or other charges?Sacks:
Many years ago, we negotiated room rates with major hotel firms that still are as good or better than what planners would be able to negotiate on their own. The commissions that hotels pay will not affect the room rate we get for our clients -- the costs are not hidden elsewhere in the hotel bill to make up the difference. The rates we get from hotels include the commission. In fact, our people watchdog those rates, to make sure the quotes we get from hotels are not affected by commissions.Cummins:
I watchdog these as well. In my eight years of business, I can sniff out and determine when the rates hotels give me are "loaded" because of commission. The rates I get are as good or better than what any in-house planner or large third party is getting. > How can planners find a reputable, professional third party?Sacks:
You should always get references from other planners, as well as suppliers who work with them -- A/V firms, destination management companies, etc.Cummins:
When considering independent firms, I recommend looking not only at references, but at the qualifications of the owner or top managers.What is their experience in and knowledge of the industry, and do they have credentials like the CMP or CMM? Do they have a long-term commitment to the industry? Have they filed a DBA -- a "doing business as" registered company name -- in the state where they are based? Do they have an established presence online, such as on a company website or a LinkedIn profile, and membership in professional industry associations like Meeting Professionals International and SITE? Do they have appropriate insurance coverage?
Additionally, you might want to ask if they collaborate with other independents who can provide a service outside the boutique firm's area of specialty. For example, I belong to a group of 13 other independents in the Dallas area called Independent Meeting Professionals Dallas/Ft. Worth [impdfw.com]. We share best practices, education and often partner with each other.> What are the key differences between a large third party and a small independent firm?Sacks:
When you decide to outsource to a large one or small, one of the greatest takeaways is a conversation about personnel. What do you have in-house and what do you need? Make sure the company you choose has enough bodies to fill those jobs.
Can the third party help you benchmark your information against like industries or their full portfolio of clients? We have the internal ability to look at other clients in the same industry and share their best practices.
Large firms also might offer strong purchasing power, which can, in turn, lower their clients' costs for elements like hotels, A/V, DMCs, technology. When you work with a third party that has hundreds of clients, you are a powerful force.Cummins:
The main strength of a small independent is our ability to customize everything from packaging to pricing, RFP development and contract terms for each client. We don't use a predetermined business model that some of the larger players follow.
> Once a planner hires a third party, how often do you work together?Cummins:
We customize how often we check in. Some clients are happy to have me do the site selection and contract and then step back and just do post-reporting at the end. For others, they might need us for more involvement on-site and travel logistics. It varies from client to client.Sacks:
For clients that use a multitude of our services, we have a projects team using tried-and-true practices covering everything from how we conduct our first intro meeting to how our post-convention meeting is handled. We always like to work with someone internally to champion us and be our contact. We don't need hand-holding, but we need an internal person to bounce things off of and make the final call.