Not so many years ago, the great procurement debate started, with fearful comments from agencies about corporate bookers going direct to venues and the bean-counters stifling their creativity. In fact, the power of said bean-counters was so great that even venues and other suppliers began to worry. The entire value of the meetings and events industry was under scrutiny, while phrases like ‘return on investment’ and measurability were on every tongue. But, as is often the case with economic and commercial forecasts, predictions and reality are rather different.
ROI, measurement, demonstrable and perceived value are all still discussed and have become a highly important part of our working lives – and the industry is, on the whole, better off for it. Creativity is rife, only stifled where it was unnecessary or an over-the-top luxury in the first place and, rather interestingly the corporate bookers aren’t going direct.
Instead, we are seeing a clear trend in the opposite direction, with six of our top clients switching either all or most of their business from direct bookings to agencies in the last six months. The reasons are fairly clear cut and make commercial sense: in their need for an understanding of outgoings and expenditure, an agency allows them to keep track of their many event bookings across a myriad of venues.
This change in operational procedures has, however, had a fairly drastic effect on those of us who are independent venues – others within the CCE group concur. Essentially, our commission bill has gone up 68% year on year, without any increase in actual business – and that includes me confidently assuming the agency will not persuade them to go elsewhere. Like everyone they have their preferred partners, many of whom can offer huge discounts to agencies across a variety of properties nationwide.
However, before you think this is just sour grapes, it should be noted that I truly appreciate the position of agencies, understand their value and, in theory, have no problem with the idea of commissions. They bring us new business from new clients and, in the long term, I am quite sure the benefits will outweigh the short-term drop in profitability – usually in the region of 10% per booking.
Most of the agencies we work with are excellent, but unfortunately not all. Just a few rogue traders have done enough damage to make me, my directors and indeed colleagues at other CCE venues wary of being too polite whenever the words agency or commission are mentioned. Why, you ask…?
In short, more than one of those six top corporate clients has made it clear to their agency that they wish to keep using us. So clear, in fact, that the corporate booker still calls to check availability, still calls to organise the event, still shows up on site alone to run the event, and still follows up the event directly with us. The agency has one role – confirming the dates already held, for which they claim a healthy 10% and no doubt more from the client in ‘management’ and ‘venue finding’ fees. What exactly are these agencies doing for their money? We certainly see no involvement from them.
Working with agencies like this is hard work and demoralising, particularly when another agency, aware that our key client would book us with or without their help, doesn’t ask for commission. They understand we have a long-term relationship and, instead, focus on managing the client. Rather than acting as an impediment, they actually help the situation.
For the good of our industry, venues and agencies need to work in partnership, not against each other. Do they really need the commission if they are claiming a management fee – or vice versa. As a venue we need to demonstrate our value both to the agencies and the client, surely the same is true for the agents. We are thankful for the business we have worked hard to achieve, but taking fees from both ends risks the client/agency relationship as much as it does the agency/venue relationship.
_Kathryn Mais is sales manager at Lane End Conference centre_
