This article was first published in the Journal Of Selling And Major Account Management, Summer 2000.
INTERVIEW WITH STEVE RICHARD (continued)
K.W.: How do you change customer perception and get them to buy in to the GAM programme?
S.R.: Well I think first of all what has to be done is that you have to flawlessly execute against their baseline expectation before you can move the customer on from thinking that "one point of contact will help me with my pricing issues". Once you've done that and delivered a number of small successes the buyer starts to feel comfortable with you, and your approach and organisation and you can begin to lead him towards the Promised Land. By helping them with small successes you can begin to build the relationship.
K.W.: Can you give me an example of that?
S.R.: Sure. I finished a meeting two days ago up in New York with IBM where at the end of the meeting they said to me, "you are now the only supplier that we are going to deal with when piloting anything new. Everyone else, the Hiltons, the Starwoods and the other people will be the follow up people who will get it after you and I have piloted everything". That's the accumulation of one year's worth of work on my relationship with IBM since the early days when they were only interested in our solving pricing problems for them.
K.W.: What are the innovations that they will pilot with you?
S.R.: Well, we're looking at things that may appear pretty mundane but actually get at the heart of how we will do business together in the future. Last year IBM paid us over $2,000,000 in cancellation fees for meeting rooms. They paid us another $15,000,000 for meeting rooms they actually used. So, they're paying over 10% of their budget for meetings in cancellation fees, that's a huge proportion. The idea we're going to be piloting involves setting up an internal, that's internal to Marriott and IBM, electronic bulletin board where any meetings that get cancelled would immediately be put on this electronic bulletin board and sold to other IBM customers. If the cancelled meeting space is filled by another IBM opportunity the cancellation fee will no longer apply. Instead of paying the full cancellation fee the original meeting customer would only be liable for the difference. Everybody wins. We're happy because someone shows up to use the space, the original booker saves most or all of his cancellation charge and the new booker gets what they need at a potentially lower cost. If there is a difference in the revenue from the original booking that difference is settled within IBM.
Electronic purchase orders, bill submissions and electronic payments are also in the works. Electronic transmission of individual traveller folio data directly into their global expanse management system is now a reality. These initiatives get to the heart of their strategic initiative to move into a total B2B environment. Two months ago I was travelling in Europe with one of my customers with the aim of helping to figure out how they redesign their non-US strategy on consolidation of accommodation expenditure.
As the relationship has developed the focus has become increasingly strategic. My role has effectively changed from being a consultant on price to helping to resolve business problems to being an organisational-issue consultant. Not only does trust grow during this time, but the impact of problems also diminishes and a tolerance for mundane issues increases, they become minor irritations instead of decision-making factors.
K.W.: How does this kind of thinking impact upon the way you attempted to resolve the internal blocks to your GAM programme.
S.R.: Success breeds understanding. People need to be convinced of the value to them of what you are doing. The real issue is communication. The issue is demonstration of value frequently, the demonstration of success so frequently that it will overcome the inertia and the concerns of the people who are blocking your way.
We have devised a strategy that identifies multiple audiences throughout the enterprise who are critical to the success of the alliance programme. By constant communication we aim either to gain their support or give them enough information to continue to help them better understand the advantages of our strategy.
Having identified those internal markets we assign people to continually address them in order to gain their support. Our GAM vice president engages Marriott's senior executives on a daily basis with information on our customers, the market environment, competitive information and our successes. The regional global account managers engage all of the key decision-makers in their part of the world, from SVP on down to cluster directors by being involved in their organisations. Being on the agendas for their meetings, continually communicating.
For example, next Monday I will present the GAM story and strategy at the Director of Marketing Forum. Every few months we bring in all the new directors of marketing from across the world for school. I go and present our mission, vision and game plan to them and make sure they understand exactly who we are and what we do and our value to them. So we catch them from day one. We are then on the agenda of every single type of meeting throughout the organisation, when they bring all the general managers together for their annual general managers meeting, we're on the agenda. When they bring all the directors of marketing together we're on the agenda. When they bring all the Finance people we're on the agenda, even if it's just an hour. We're there to present, we're there to mix and mingle and do and be visible.
K.W.: So that's the communication element of it. Constant, ongoing, involving, but what about some of the real blocks? I remember you describing an individual hotel manager as walking outside his hotel turning round and in 360 degrees there was his world, he wasn't interested about anything that happened five miles away. Now how do you address that problem? How do you address the issue of country interests and well as local interests impeding the global strategy?
S.R.: I'll be honest with you, sometimes it is not easy. But you can't stop trying. In that specific case I used the "Push and Pull" analogy. Our team pushes and his team pulls. Even if they are only pulling in their backyard our Pushing will eventually have an effect. Creating a positive willingness to work together between 2 enterprises does indeed flow across and down. There is a positive cause and effect that will grow. When the GAM accounts are growing at twice the rate of all other accounts it is a good indication that it is working
K.W.: And how do you interpret that success in their terms?
S.R.: They may want more business from the GAM accounts, period. They may also want better information on the account and their competitors. And we help them with that. They may want better access to the accounts decisions makers in their backyard. And we can help with that. They may want help on setting pricing and strategy for the account. And we can help with that. They may want help in marketing to the account. And we can help with that. Just as the GAM acts as the consultant to the external customer so we play the role of consultant to the internal customer. If we work hard on the total "equation" we will get the right answers for both our customers.
K.W.: So in a sense what you're doing internally is exactly what you're doing external?
S.R.: If we were to draw a chart to show how we manage customers, all you would need to do is switch the names to show how we manage internal customer.
As I've briefly outlined above the process is very similar, in that it involves changing the customer's perception of the value the GAM programme. At one level the local hotel receives protection from the negative impact of dynamic market conditions may have on the external customer. If we have done a good job of developing a robust relationship with the global customer, that provides insulation against downturns in the market place. Our share doesn't go down when the pie gets smaller and that can translate all the way to the local market because they see their competitors business go down at a much more accelerated rate than theirs. Defending against erosion or downturn is just as critical as driving new revenues.
At a more significant level the global relationship creates new opportunities for local sales people giving them access to key decision-makers. There's a whole range of other non-financial values created. Just as we create non-financial values for our external customers, so we create non-financial values for our internal customers. By involving them in the process they get a sense that they're part of it, that they have some control, that they have some contribution. In more concrete terms we have adapted a customer review process that we use when presenting to very high level clients so that it can be used by the local sales teams to listen to the local customer about what their key drivers are. I absorb all costs for analysis and report writing that is generated and at the same time I have provided them with a major tool that distinguishes them in the eyes of the local buyer as not a sales person but as a mini consultant. The ability to listen to their issues, that immediately differentiates them from all of the other hotel sales people in the eyes of the customer.
K.W.: How have you addressed the issue of moving the sales people away from individual facilities to a more market focused location? How have you convinced local or hotel management that this is the way to go?
S.R.: It has been the biggest challenge. We are still working through this. There are some places where the nickel drops immediately and they move in that direction wholeheartedly. There are others that still need to get comfortable with it.
The challenge comes in a number of forms. There are some larger hotels that have historically controlled a large Salesforce and fear both a loss of control and a lack of enough accountability on the part of the new organisation, and there are the owners and franchisees that see it as potentially costing them more money. I'm over simplifying a very important dynamic that we are moving through at the moment. We are also moving through it successfully but at slower pace then we had originally hoped. We are very carefully conducting a baseline assessment on an enterprise level to see what we have done, what our hotels and owners think, what they want, what works and what needs work. This will give us our new challenges and bring all the parties and pieces closer together on the vision.
End of Interview
Key Learning Points:
The Marriott experience provides some valuable insights into how to overcome organisational barriers to the implementation of global account strategies. What the Alliance Account Team has identified is that a clear and cohesive strategy needs to be developed to promote the programme inside the organisation in similar ways to the strategies developed for external customers.
Critical elements of the programme include:
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Dr Kevin Wilson
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