Are You Managing Your Competitors or Are They Managing You?
By John Manderfeld, President, Marin Management, Inc.
Can you really manage your competition? Well, you can certainly manage your competitive relations and the impact your competitors have on your business. And, in good times and bad, there are ways for you to always come out on top.
Start by being realistic about who your competition is. Too often we like to flatter ourselves by imagining that we directly compete with hotels far more luxurious and packed full of more services than our own. A guideline that I use is that if a nearby hotel's rates are usually within 30% of mine-higher or lower-they are a direct competitor. And that means I need to treat them as a competitor.
Here's how with seven ways to manage the competition:
1. Build strong relationships with your competitors. Know that your competitors are not your enemies. In fact, they can be your best friends and your most active source of customers. Other hotels can send you more customers than any other single source. Treat your competitors with respect and consideration. Don't fight over the small things.
I knew a hotel executive who did not talk to a competitor for years over one hiring an employee from the other (and a couple even less important issues). The result: thousands of lost room nights from referrals.
Building strong business relationships is more than just an occasional friendly telephone call or lunch. Do something with the leaders of your competing hotels-go to a ballgame, entertain them for dinner or play a round of golf. Let's face it, when you cannot accommodate a single guest or a large group, you refer the business to someone you like.
I knew one smart general manager who regularly sent pizzas to the front-desk staff of other hotels that sent him business. It worked! He got a lot more referrals. Treat your competitors as well as your biggest customers, but compete, compete, compete.
2. Knowledge is golden. You need to know more about your competitors' features, services, policies, procedures and ways of doing business than they know about themselves. One example, of course, is rates. Hotel operators often check competitors' rates on Internet channels and think that is enough. It's not. You need to know their unpublished rates for every market segment-tour, government, discounts, city-wide events, and every kind of group. Your team should know competitors' rates for every volume corporate account.
It doesn't stop there: What is their complimentary room policy for tours? When does their sales office open on Saturdays? What audio-visual equipment do they offer gratis for meeting planners? Feel free to add a couple hundred more questions to your list.
I once knew a hotel director of food and beverage who, two years on the job, had never visited his biggest competitor just across the highway. Guess which hotel was winning in banquet and restaurant sales.
3. Use the information you gained to set the standards at your hotel. Set every sales policy and procedure to be more effective and customer-friendly than the competition. Redefine every guest service and every hotel feature to outperform the competition.
4. Outwork the competition. When I was a hotel sales director, I made it a habit to arrive a half-hour earlier and stay an hour later than my biggest competitor. I got a lot of calls they missed.
I enjoyed working weekends and holidays because that is when I booked many social events. One Fourth of July I booked a $250,000 corporate group for the following Labor Day. The decision-maker had been unknown to me and stopped in without an appointment. He signed the contracts after a short site tour. I asked the new client why he chose our hotel. He told me that he had been to the area's other hotels and I was the only salesperson working. "If they're not working on the Fourth of July, they won't be working on Labor Day" he told me.
He remained my friend and one of my biggest customers for years. The truth is that on that Fourth of July I wasn't really working all that hard. So, Woody Allen may have been right when he said, "Eighty percent of success is showing up."
5. Experience the competition from your guests' point-of-view. Stay at every competing hotel at least once a year. Write down six things each does better than your hotel. Challenge yourself and your management team so that those six will not be on next year's list.
You don't think you can be objective? The next time a friend calls to ask you for a free room, say no. Pay for him to stay at a competitor and ask him to write down everything the competition does better. It will be an eye-opener!
6. Be seen more than your competition. Get involved and stay involved in community events. People like to do business with people they know. If your competitors' management teams are known better than yours are, the competition will have a big edge on you.
There is a story told about Benjamin Franklin owning a small printing business. He made a point to go quite some distance to the docks every day-even several times a day-to pick up paper. Along the way he would call out a greeting to anyone within eyesight, calling them by name, of course. He even made sure that his old cart had a squeaky wheel so that he would be noticed and remembered. He certainly could have had the paper delivered-as did his competitors-but he wanted to have a reputation as being hard working, a reputation that gained him respect and new business.
If you don't have a squeaky cart, join service clubs, attend chamber of commerce events, work with your convention bureau, serve on committees and then do more. It seems inevitable that in every market the highest performing hotel is the one where management is the most involved in community activities.
Do you want to be a really tough competitor? Find out the charity supported by the chief executive of your competitor's largest client. Support that charity and show up at every one of their events. Soon you will have a new biggest client.
7. Talk about the competition. Your employees will be no more competitive than you are. At staff meetings and in casual encounters emphasize the challenges your team faces from capable competitors and challenge them to outperform the other team.
Don't file away those other hotel brochures and sales kits. Put them on display in your back office, sales office, employee break room and housekeeping areas. Your message will be clear: "We have to beat these guys; and we have to be sharp to do it!"
I can't deny that I love to compete. Maybe that's because with healthy competition everyone wins. Certainly the customers win; and certainly the better operator wins. But even the less-competitive hotel operator learns to do better.
John Manderfeld is president and founder of Marin Management, Inc., a hotel and restaurant management and sales-support company formed in 1990 and now operating more than 25 hotels. Marin Management, Inc. is based in Sausalito, California. He has served as president of the California Lodging Industry Association and currently serves on its board of directors. He is a frequent public speaker on hotel sales. Mr. Manderfeld can be contacted at 415-331-1061 or firstname.lastname@example.org Extended Bio...
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