At Whose Service?

How CVBs strive to please both members and meeting planners

dan fenton

 

San Jose CVB chief Dan Fenton felt a membership-based bureau was a conflict of interest.

A few years back, the San Jose (Calif.) Con-vention and Visitors Bureau eliminated its membership department. Poof, and it was gone. Members-only events went by the wayside. The bureau’s card-carrying members no longer had cards.
    “We wanted to make sure we recommend to our clients those businesses that are a match for them, not necessarily those businesses that pay $300 a year to be a member,” says Dan Fenton, bureau president and CEO.
    Hotels, the primary beneficiaries of the bureau’s marketing, still pay dues to the SJCVB, above and beyond the hotel tax, but they’re no longer called members; now they’re “partners.” From the hotel perspective, it’s a small change, but in San Jose, the hotels never minded paying membership fees. Besides that, though, all the other institutions, including restaurants, florists and the auto repair shop that wanted to join just to display the sign in the window, have no financial ties to the bureau.
    Nobody seems to miss membership. Indeed, discarding the program has given the bureau far more freedom to be an unbiased source of information for meeting planners. Take the meeting planner’s guide, either online or off. Before, it listed every business willing to pay to land a spot, even those that weren’t ideal for meetings. The guide might have been missing dozens of great restaurants, and if a major attraction or fantastic venue didn’t pay dues, it, too, would have been left out. Now, San Jose’s guide contains only the businesses that the bureau, with the help of meeting planners, deems most fit.
    Or what happens if a planner wants an honest recommendation regarding a local vendor? In memberless San Jose, the CVB doesn’t have to worry about offending businesses that don’t get to see every lead.
    In the past, says Fenton, “Lots of times, members’ feelings were that the CVB was going to give them some type of advantage or recommend them. That just created conflict.”
    The San Jose CVB is the most dramatic example in an industry taking a hard look at its membership structure. The current system is rife with bias: Bureaus that are paid by some businesses and not others are pressured to direct leads to the paying businesses in a process that is driving meeting planners elsewhere for information on a city. A number of bureaus are working to reverse that trend.

Finding Alternatives
Butch Spyridon

 

 

Butch Spyridon

Nashville, Tenn., and Richmond, Va., went without a membership program for years; now that the bureaus in both cities have begun to cultivate a membership base, each is trying to avoid the worn systems of the past.
    The Nashville Convention & Visitors Bureau broke off from the chamber of commerce almost three years ago; just over two years ago, leaders began discussing the best way to bring in membership.
    “It’s been an intentionally slow process with a lot of focus groups,” says Butch Spyridon, CVB president. “We want to do it right.”
    Nashville offers five membership categories at escalating prices. At the lowest level, members are listed in bureau publications. When businesses pay more, they get enhanced listings, receive leads and can be part of familiarization trips. The more a business pays, the more detailed the convention calendar it receives. Spyridon aimed to attract 100 charter members before the program’s rollout the first of this month.
    In Richmond, the current membership system if you want to call it that began three years ago as a marketing partnership among restaurants. Kendal Thompson, development manager at the Richmond Metropolitan Convention & Visitors Bureau, began working on the project both to promote the area’s great restaurants and to create a small revenue source for the bureau. Each paid a fee, and the CVB spent that on marketing. Any leads that came in were sent to all the businesses in the alliance.
    It evolved organically from there. Restaurants that caught wind of the program wanted to sign up. When bus companies, improv groups and a rental car company wanted to expand their marketing programs, they, too, were admitted to the alliance. “That’s where our expansion comes in: word of mouth,” says Thompson. -- J.V.


Member-free
The San Jose bureau is the only such entity known to jettison its membership; however, it’s quite common for others not to have members in the first place. As it stands, only about half (51 percent) of all CVBs have supplier members, according to a 2003 survey the most recent at press time of 150 bureaus by the Washington, D.C.-based Destination Marketing Association International (then the International Association of Convention and Visitor Bureaus). Many of these are too small for membership to make financial sense, but some have made a conscious decision not to accept dues.
    In Irving, Texas, a destination between Dallas and Fort Worth, the Irving Convention & Visitors Bureau has often considered implementing a membership program, but Maura Gast, FCDME, executive director, feels the negatives would outweigh the benefits. “One of the reasons we have not gone that route is because we believe we can be a better representative of the city and our industry without it,” she says.
    According to Gast, having a membership could cause any or all of the following to occur:
    "Limit the selection of local vendors the CVB can provide to planners;
    "Draw the CVB’s sales focus away from the hotels, where it’s most needed;
    "Sour the bureau’s relationship with the chamber of commerce, which maintains an active membership and might see such a move as competitive;
    "Force the CVB to deal in member politics, and
    "Not provide enough revenue to offset the cost of maintaining the group.
    Best of all for Gast is the satisfaction of having clean hands when it comes to connecting planners with suppliers. When a vendor comes complaining that the bureau hasn’t sent along enough leads, “we delicately remind them that they do not pay dues,” she says.
    Along those lines, member-based bureaus have to appease both public officials and, to some extent, every business that pays in. “We’re already under a magnifying glass with the city administration,” gripes Elise Rogers, vice president of development for the Albuquerque (N.M.) Convention & Visitors Bureau. “Then we have nearly 1,000 members who think they’re our bosses. That’s just the nature of the beast.”
    Most CVBs that have never had membership are charged with marketing smaller destinations, such as Kissimmee, Fla.; Arlington, Texas; and Hampton, Va. After all, it’s more likely that membership will be profitable if there are thousands of vendors in the city. There is, however, at least one notable exception. The Las Vegas Convention and Visitors Authority, the largest bureau in the country, if not the world, has never had a membership base. In fact, it has never even been discussed in a serious way.
    Membership isn’t necessary, explains Terry Jicinsky, senior vice president of marketing of the LVCVA. Hotel taxes on 135,000 rooms provide the CVA with quite enough of a budget. “If it’s not broke, don’t fix it,” he says.
    Even without members, the LVCVA and even the Irving bureau are hesitant to recommend one business over another. Planners are handed a list of every visitor service in the city and are expected to choose. Jicinsky claims it’s not overwhelming; for example, his list has about 30 destination management companies grouped together. 
    Dan Fenton, who prides himself on the San Jose bureau’s ability to offer just a manageable few unbiased recommendations, would respond, “How helpful are you? I’m not sure what people are gaining by using you.”
Dave Heinl, president and CEO of the Greater Raleigh (N.C.) Convention and Visitors Bureau, agrees. He has worked at the nonmembership bureau since founding it in 1987, but prior to that he worked in Seattle; Hartford, Conn.; and Portland, Ore., all of which maintained membership rolls.
    Heinl says the perception is that not having members allows him to represent his whole destination equally. For the most part, he notes, that perception is accurate. But the situation isn’t perfect. He can’t list every business in the visitors guide, and because such inclusion is based on a fee, he has little control over how many fast-food joints get placement or how many unique restaurants selling points for the destination don’t. Most meeting planner guides are compiled similarly (San Jose’s being a notable exception), which ultimately limits their value to planners.
    In the end, though, not having members has been a boon for Raleigh. “Before, I was spending a lot of my time talking to members,” Heinl says. “Here, we focus our entire time on the reason we’re here: to bring visitors.”

Getting spammed
According to planners, the most annoying part about working with a CVB isn’t about bias, but rather the bureau member’s most coveted tool: the convention calendar. Bureaus are obliged to provide members with a calendar of upcoming conventions, usually with contact information for each, six months to a year out.
    The stated reason is to allow businesses to staff accordingly, to give attendees the best customer service possible. The other, more ignominious reason is to allow members to begin prospecting for business. When the calendar is released, planners field a glut of calls from local businesses, especially DMCs, asking whether their services could be of use. “I get them all the time, and I hate it,” says Rochelle Colclough, CMP, director of meeting planning at the Council on Foundations, based in Washington, D.C. “I always wonder how this information gets out.”
    “The number-one reason meeting planners don’t want to use bureaus is they don’t want their leads distributed to the entire membership universe,” says Maura Gast, who proudly keeps the Irving bureau’s calendar under wraps.
    But for cities with large conventions, the calendar is essential to ensure everyone knows who’s coming. Even Las Vegas, which doesn’t have paying members, dispenses the calendar a few months in advance. “If a vendor chooses to have a more aggressive sales approach, there certainly is the opportunity for them to present their services,” says Terry Jicinsky. “We don’t make it touch-of-the-finger easy to get the phone number. We also don’t make it impossible.”
    Mike Lyons, CEO of GEP Philly, a Philadelphia DMC, says the practice is meant to help, not annoy. Meeting planners coming to an unfamiliar city might be happy to get those calls. “It’s something to rely on,” he says.
    Indeed, not all planners mind unsolicited queries. Cele Fogarty, a senior director at the Washington, D.C., office of association management company SmithBucklin, says anyone who calls before she sends out a request for proposal is given a shot at her business. “I need organized suppliers,” she says. Her only wish is that they would call earlier.
    In general, planners who don’t want to be cold-called should request that their names and contact info be omitted from the convention calendar when their event is advertised. In addition, they should demand to have “do not contact” printed by their convention’s name.
    “If you say, ‘I’m not fine with you sharing my information,’ they won’t,” says Deborah Sexton, president and CEO of the Chicago-based Professional Convention Management Association and former president of the Chicago Convention and Tourism Bureau.
    Then there’s the tried-and-true approach that works on most callers, whether they’re pesky businesses or bad dates. “I don’t call them back,” says Pam Ballinger, vice president of meetings and exhibits for Association Headquarters, based in Mount Laurel, N.J.

Getting an Unbiased Opinion
arlene sheff

 

Arlene Sheff, CMP

“Most CVBs won’t tell you who they actually recommend, because they like to treat all their suppliers equally,” says Arlene Sheff, CMP, senior meeting and event planner for The Boeing Co. in Seal Beach, Calif. “They’re just a resource for data, not for recommendations.”
    Sheff and other savvy meeting planners have learned to dig past the CVB to find trustworthy opinions. Here are some places to turn to find the very best vendors.
    Canvass planners. Collect at least a few recommendations on each supplier, from industry association meetings or even the bureau. The Greater Boston CVB compiles postconvention reports from meeting planners, which provide information about many of the city’s businesses.
    Ask the hotel. Sometimes it doesn’t matter if a supplier is good, if that company has never worked with the hotel you’re using. For security companies especially, solicit feedback from the hotel. When the issue is finding a hotel rather than finding a local vendor, planners often use a preferred hotel chain’s national sales office.
    Hire a site-selection firm. To save time, Arlene Sheff uses Meeting Sites Resource, a site-selection company. The company sends out requests for proposal and organizes the results on a spreadsheet, then leverages its buying power to secure a deal. The group might be slightly more biased than a CVB that makes no recommendations, but then again, that can be a plus for the planner sorting through proposals.
    “Out of an entire destination, we might pick three hotels,” says Tim Brown, partner of Meeting Sites Resource, based in Irvine, Calif. “A CVB would be hard-pressed to incorporate just three hotels.”
    Consult bridal books. For finding off-site venues, Sheff recommends pulling out a bridal magazine, which will list hundreds of restaurants with private dining rooms, event facilities and other services.
    Scout out reviews. For new restaurants that might not be members, read a local publication online. It will bring you up to date on the restaurant scene. -- J.V.

Reasons for membership
The vast majority of bureaus with members have been extremely hesitant to follow the San Jose CVB’s lead. After all, membership might have its limitations, but it also has its privileges. In some cases, explains Maura Gast, membership can simplify matters. For example, mailings to members are a great way for a CVB to maintain contact with the destination, and such contact would help the community understand that the bureau is charged to market more than just hotels, but also restaurants, florists and local speakers. Without mailings, “You’re not actively seen representing all the entities you represent,” says Gast.
    Bureaus with membership agree the system is only partly about the dues. The 2003 DMAI report showed that, on average, just 3 percent of total CVB funding comes from membership dues. “From our standpoint, it’s really about a partnership,” says Betsy Guetta, director of membership sales and services at the Valley Forge (Pa.) Convention and Visitors Bureau. “The only way we can prove that it is a good decision to come here is by showcasing our membership.”
    Also, the funds brought in through membership are private and therefore can be spent on gifts and alcohol, whereas in many jurisdictions, public funds from hotel taxes cannot, explains Elise Rogers. Without membership, CVBs couldn’t entertain clients the way they do.
    The St. Louis Convention and Visitors Commission has taken a hard look at its structure several times over the years, and each time, according to Bev Totten, vice president of services, the bureau realizes it’s better to have than to have not. Membership dues bring in a small (maybe 6 or 7 percent) but important slice of the CVC’s revenue, and it creates a point of contact between the CVC and local businesses. Plus, says Totten, “When you don’t have any members, everyone complains like they are a member.”
    It’s not necessary to have a dues-paying membership in order to get the most of the benefits, though. Even without a membership, the Irving CVB occasionally acts like it has one. A few months ago, the bureau held its first-ever “membership luncheon,” in which elected officials, patrons of the arts and community businesses were invited to discuss future opportunities to help promote the destination. This type of activity accomplishes the public relations of a membership program without having to deal with member complaints. The notion of a community roundtable has worked in Raleigh as well, where four times per year, representatives from the community meet with CVB executives to keep abreast of bureau happenings.
    The question is, do the dues diminish the quality of the bureau? Is membership good for meeting planners? The fact that the vast majority of large bureaus continue to have membership programs suggests that the model for the most part works. “Overall, I think meeting planners know that if they go to a bureau, they’re going to get the most accurate information on the destination,” says Michael Gehrisch, president and CEO of DMAI. As to the bias that membership creates, Gehrisch doesn’t think it gets in the way of honesty. “Of course they’re going to promote their members,” he says, “but if someone wants information on a nonmember, I think they would give it to them.”
    In almost all cases, that’s true. Yet, member-driven bureaus seem far more hesitant to discuss nonmembers with planners. For example, in Bucks County, Pa., tour operators often want to bring a group to the Bucks County Playhouse, a renowned venue that is not a member of the bureau. The bureau is obligated to steer the tour operator to a different theater unless the client puts his foot down.
    “Had we not been a membership bureau, it would have been easy to simply provide what the customer wanted at the start,” says Keith Toler, executive director of the Bucks County Conference & Visitors Bureau, based in Bensalem, Pa.
    The membership department of the St. Louis CVC has perhaps a little more leeway. If a planner asked Bev Totten about a nonmember, she would explain that it’s not a member but also give her opinion. But she wouldn’t suggest it to begin with. “We’re supporting people who support us,” she says.
    John Hendrie, CEO of Hospitality Performance Inc., a Merrimac, Mass.-based consulting firm that has worked with CVBs to set standards for members, considers the issue not limited to bureaus. “When you go to anyone who has an affiliation with other businesses, you expect them to refer those businesses first,” says Hendrie. “You’re basically promoting your buddies.”

A better model
Even CVBs with membership, however, have found ways to be fair when sending out leads for meeting planners. Years ago, bureaus would send out a planner’s lead to every member business, requiring those businesses to sift through RFPs that were a bad fit for them, and forcing planners on the other end to attempt to separate the wheat from the chaff. Since then, bureaus have begun refining leads, often with the help of software, so that just a few qualified members receive them. Some CVBs will then arrange the responses in a spreadsheet for quick perusal.
    “The old way, customers unfortunately would hear from people they wanted nothing, nothing to do with!” says Deborah Sexton. “It’s been many years since that model has been in existence for a sophisticated bureau.”
    In Indianapolis, for example, a relatively new system called Jupiter refines the leads, and as a precaution, an executive of the Indianapolis Convention & Visitors Association must sign off on any leads sent out. Even the members are happy about the change. “They feel better that they are getting leads that are well qualified,” says Susie Townsend, director of sales and services for the ICVA.

Pay to play
Shortly after the San Jose CVB called off its membership, the Sacramento CVB took a slightly smaller step that maintained the revenue stream but erased the bias that a membership can create.
    Leonard Hoops, vice president and chief marketing officer, converted the bureau’s membership structure, in which local businesses pay an annual fee to get a bevy of benefits, to a “partner-marketing” arrangement, in which the CVB offers buy-in opportunities for specific programs. The difference, says Hoops, is that now the bureau has stopped chasing members to join or renew. The extra members previously brought in by coercion weren’t supplying much revenue, anyway; once the costs of running a membership department were considered, the revenues came out to a wash. The new department, on the other hand, has increased total revenues by 20 percent, money that is funneled into sales and marketing efforts, rather than back toward membership programs.
    The basic partner-marketing structure isn’t all that different from the old membership structure. Local businesses that want to become basic partners are given a listing in bureau publications, a link on the website and invitations to partner functions. One key difference is, partner businesses are not promised any leads whatsoever, which frees up the bureau to recommend the best businesses, not the most loyal.
    The real money comes from strategic partnerships. The partner-marketing department, made up of the two former membership directors, works to provide revenue in terms of cash or goods and services, not through dues but through sponsorships. The department recruits local businesses to participate in marketing efforts; as an example, the bureau partnered with a minor-league baseball team that was aiming to promote a concert series at its stadium.
    “In the past, they’d be trying to get money out of us, and we’d be trying to get money out of them,” says Hoops. “Instead, we gave them publicity, and they gave us free tickets for their concerts.” Another example: A local coffee company, Java City, agreed to supply the bureau with its coffee in return for a small sponsorship. Not only did the office’s coffee improve, but the money saved on coffee jazzed up the bureau’s bottom line. These types of trades are not new, but they are being done much more commonly and profitably.
    “At the end of the day, it’s not a 180-degree turn, more of a fine-tuning of who does what to be more efficient,” Hoops explains.
    For many bureaus, including the Washington, DC Convention and Tourism Corp., the San Diego CVB and the Indianapolis CVA, partnership is the way of the future. For now, these bureaus are keeping their membership but also realizing funds from such types of partnerships. The ICVA, for instance, has members the Indianapolis Power & Light Co., for example that join up just to take advantage of the sponsorship opportunities.
    “They don’t need leads,” says Susie Townsend. “They want exposure.”
    In Sacramento, and San Jose, that type of arrangement is all that’s offered.
    “Nobody signs up with the idea of getting business anymore,” says Hoops. “We’re more interested in satisfying the customer, not the stakeholder.”