A Case Study for Owners, Asset Managers, Heads of Sales and Management Firms
How CSM Achieved 9% YOY Rate Growth Coupled With 9.2% YOY Revenue
The situation: hard working v. effective
CSM, an owner, developer and large franchiser of well-know hotel brands, had a hard-working sales team. The return from the sales force was fine. Passable. Kept in line with the competition. But there were key elements missing between good and great.
Strategies, Tactics, Goals: Aren’t they all the same?
CSM had a clear vision and understanding of the overall financial goal needed to have a successful year. What was missing was the strategy that connected the goal to the tactics, which would have allowed them to assess, pivot and adjust.
- Teams focused on tactics, expecting to achieve the overall goal.
- What they experienced was activity fatigue and disappointment when they fell short of the goal.
Incentives and the greater good!
Sales teams had an incentive program that encouraged the well-known hunter mentality. What was missing was the connection between profitability and true revenue growth, then to inspire the sale.
- Incentives are powerful for highly motivated sales and revenue teams.
- Ill-placed they can take down profitability of any organization.
The sales and marketing teams were at war with the highly commoditized hotel sales environment, creating an exhausting conundrum. Clients and guests could book with ease through ever-growing purchasing channels, the most expensive channels to the organization.
- Sales team didn’t know how to compete to overcome that environment.
- Current customers, a once solid base, were reaching their expiration.
- Teams were unsure how to create value to approach new customers.
Strategy / Approach:
The sales, marketing and revenue management teams communicated effectively with each other and there was enough work to go around with not enough time to do it in. What they lacked was coordination within the team. Who needed to take what steps, take the lead, or collaborate to gain the most traction? Everyone was at the starting block, racing together. What they needed was a relay strategy to leverage each team member at the right time, with the right focus, the right result, and the correct hand off to the next team member. Installing key elements to the process was critical.
Organizations have a great number of goals that are crafted and communicated, yet teams rarely can see, thus understand the connective tissue between their goals and the larger organization. Moreover teams are often tactically driven, rather than strategically charged. CSM needed put the shoulder of the entire revenue organization behind a singular, simplified goal. To help them drill down without loosing context, we:
- Stratified goals, which were clearly derived from the overall financial goal.
- Refocused teams on strategy fulfillment within those goals rather than tactical activity within team execution.
Align, Align, Align.
Incentive programs are tricky. Vested interests, many moving parts, and the emotional energy dealing with compensation makes it complicated to see the essence of what behaviors are needed to create the right incentive program. CSM needed a program that at its core aligned the revenue management, marketing team, and sales force, and incentivized capturing targeted market segments. We helped them:
- Reengineer the compensation plan to drive the revenues that were valued in delivering the outcomes needed.
- Adjust the incentive plan to align sales force goals to the next level of revenue growth.
- Clarify the most profitable clients and guests.
As with the purchasing channels within the travel and hotel market, most industries have or will shortly feel the commoditizing of their space. Engaging customers in the described landscape takes a different approach than in years past. Yet companies continue to expect the revenue teams to drive revenue, and predominately from the rate or price side of the equation. The sales force, marketing team, and revenue management teams have to show up differently. In order to serve these demands, we helped CSM to:
- Reengineer how they engaged their customers.
- Involve the sales and revenue leadership in the learning, indoctrinating and coaching of the new process.
- Cement the ‘new’ into habit.
CSM enjoyed 9.2% gain in revenue year over year.
Through our work they had:
- Institutionalized deriving the right strategy from overall financial goals.
- Managed strategy, rather than weekly tactics.
- Aligned each expertise on the strategy and incented behaviors to drive the anticipated outcome.
- Engaged the most profitable customer that gave way to increased pricing.
- Have the path to repeatable results.