Growing up in Alabama, football was a religion and we showed our devotion at the altar of the SEC (the Southeastern Conference, not the Securities & Exchange Commission). You might worship in the church on Sunday, but Fridays and Saturdays were reserved for services conducted on the gridiron. Football, however, took on new meaning for me more than a decade ago when my niece suited up at age 4 and played her first game of “bunch ball.” In this new “football,” there are cleats but no pads; shorts instead of pants and the ball is round. Through the years, my respect for the game grew as I noted that there are no time-outs in soccer (except for a very short halftime…no marching bands or baton-twirlers) and the players remain on the field for both offensive and defensive series. Soccer is more finesse than power; more touches (feet, no hands) than tosses. As a result, soccer players have to be agile, swift and above all, well-conditioned.
A couple of weeks ago, after a particularly competitive game, it occurred to me that soccer has a whole lot in common with business. So I interviewed Spencer Ward, coach of the Colorado Real U16 girl’s Athletico team, to get his take. A native of the UK, Spencer started playing soccer there when he was 6, progressed to Academy Level soccer (we know it as semi-pro) and then to coaching both boy and girls teams while pursuing a successful commercial real estate career. And to my surprise, Spencer shared with me that he consciously developed his coaching style to reflect business strategies that he has learned and integrated over the years. “Most of the kids I coach will not make it to pro ranks as the competitive expectations are extremely high,” he said. “It’s important to me to teach concepts that they can use as they grow and mature, not only on the soccer field, but more importantly, in real life.”
The United States Youth Soccer Association celebrated its 37th Anniversary this year. According to its website, youth soccer grew from 100,000 players in 1974 to 1-million players in the early 90’s. Today, US Youth Soccer registers over 3.2-million players annually, ranging from ages 5-19. No doubt, many members of today’s hotel sales teams played soccer when they were younger. And if they had a coach like Spencer Ward, then they have been subliminally exposed to basic business principles as early as kindergarten. How can we leverage those early coaching strategies to our benefit when assembling an invincible hotel sales team? I asked Spencer to collaborate on a list that will help give you a competitive advantage.
- 1. Building a team. Spencer and I spent much more time discussing the importance of building a good team than we did discussing winning and losing. A team may be a group, but a group is not necessarily a team. According to Barbee Davis, “Teams normally have members with complementary skills and generate synergy through a coordinated effort which allows each member to maximize his/her strengths and minimize his/her weaknesses. Team members need to learn how to help one another, help other team members realize their true potential, and create an environment that allows everyone to go beyond their limitations.” Spencer emphasized the fact each team member brings a different dynamic to the group. “It’s the coach’s responsibility to recognize the strengths and weaknesses of each individual, both physically and mentally, and then to place them in the right positions to succeed.” According to the position played, some players get the ball less often than others, yet each team member is vitally important to the execution of the play. A well-rounded team has bench strength acquired through targeted development of alternate players with an objective of seamless substitution.
- 2. Practice. Vince Lombardi, the revered Green Bay Packer coach, believed that “Practice does not make perfect. Only perfect practice makes perfect.” Spencer agrees. He says that “practice, along with training and fitness” are vital components in determining whether a team can compete at its highest level. And part of that responsibility lies with the team player himself. Spencer wants players that are “full time, full on, learning all the time.” Scheduled practices are just one element of preparation. The players themselves must also commit to maintain their fitness level, to take advantage of additional training opportunities and to devote time to practice outside the regular schedule. Planned practices enable a team to work on drills as well as mental and physical conditioning. Individual practices allow a player to focus more on improving his own individual performance, thereby becoming a more valuable asset to the team. How does this work with a hotel sales team? Provide practice and training sessions for them by incorporating continuing education and role-playing as part of your weekly sales meetings. And encourage them to pursue independent study through webinars and other online educational venues.
- R-E-S-P-E-C-T. A healthy dose of respect is essential. Spencer discussed how having respect for each other as well as for the competition, officials, coaches and parents creates a well-rounded, mentally strong player. “You don’t have to like someone you work with or for, but you have to respect them,” Spencer said with emphasis, noting that “professional etiquette” is high on his list of must-haves. And for Spencer, if the respect isn’t there, “then you need to move on.” Respecting others often leads to enhanced self-esteem, as the player learns how to be confident, worthy, successful, and admirable…without excessive arrogance.
- Communication. In soccer, Spencer wants his players to concentrate on building mental muscle as well as physical prowess. Soccer is more about finesse than power and communication among the players is essential for the perfect execution of a play. Hustling, energetic play is very important on both offense and defense. Each player has a role: the defenders, the mids, and the strikers. Talking is easy; communication requires a higher skill level. Why? It includes listening. And most people are just better talkers than listeners (especially 16-year-old girls and salespeople). Remembering to communicate in the heat of battle can be darn near impossible. If the team understands that active listening is a vital part of communication, then you’re well on your way to success.
- Measurement. Some things stand out in a person’s mind and Paul Sistare’s focus on measurement is one of those for me. Paul’s message as president of the management company he led (and my former boss) was consistent, “If it can be measured, it can be achieved.” Not everyone is comfortable with this type of scrutiny. Why measure? Numbers help us move from subjective analysis to objective analysis, defining performance and making reality more visible. It’s up to the coach to collect and interpret both team and individual stats relevant to the team’s performance. With proper communication and mutual feedback, this knowledge helps individuals, teams, and the entire organization grow in the right direction. Additionally, it allows the coach to avert crisis management through the deployment of proactive instead of reactive strategies.
- Strategy. The formula for success includes both long-term and short-term strategies. All too frequently, however, short-term tactics hip-check long term strategies, resulting in…you guessed it…a perpetual state of crisis management (see #5). The objective of short-term strategies and tactics should always be compatible with the long-term vision. Listen to the coach, “In soccer, the kick on goal for a score is just the culmination of a play that started with the first move on the ball. It’s all about the development of the play.” A sound strategic foundation, and a commitment to it, is essential to meeting your objectives and achieving success. Making it up as you go along just won’t cut it in today’s competitive market.
- Risk-Taking. If you don’t take risks, then prepare to be average. And that’s okay for some people. Just not for members of an invincible team. In soccer, many of the most aggressive, risk-taking players frequently get yellow-carded. Some coaches actually incorporate it into their game plan. My niece, Amanda Dawson, is one of those players. I asked her how she felt about taking a risk. “I play at an equal or greater level of aggression than my opponent. And if that results in getting a yellow card, so be it. I’m willing to take that risk to get ahead in the game.” I couldn’t have said it better myself. The key here is in managing the risk in order to reduce the fear. People are innately either risk tolerant or risk-averse, but we face risk in some form or another every single day. Billy Shankly, the legendary Liverpool FC manager said, “If a player isn’t interfering with play or seeking to gain an advantage, then he should be!” Taking a risk requires mental toughness. A risk-taker must be able to shrug off mistakes, bad breaks, taunts and lousy calls during the course of a game. Dwelling on them is a mental faux pas. Teach your players how to be brave, tough and aggressive and prepare yourself for the end result. If you’re not allowed to fail, then how do you know when you’re succeeding?
- Return on Investment. In competitive soccer, parents make a substantial financial investment and Spencer feels compelled to ensure that they are receiving a return. ROI is the extent to which the benefits exceed the costs and some elements of measurement are subjective. I went to the experts (team parents) for clarification. “First and foremost, I want to know that Amanda is having fun while playing and that her passion for the game is fueled by her experiences on the field, “ says Mary Dawson. “Next, I measure how effectively she applies what she has learned from competing at this level to her everyday experiences. Ultimately, how she deals with inconsistent referee calls, team dynamics and the inevitable politics of the managing club reflects how Amanda will handle her school work, her personal life and, eventually, her professional life.” In Mary’s opinion, it’s paying off. Sue Plummer commented on the risk vs. return as it relates to injury. “Though some parents whose kids are playing at the highest competitive level may see the investment going toward a potential college scholarship, they have to face the fact of injury and possibly the end of their child’s playing career.” Personally, Sue was most focused on the investment return directly impacting her daughter, Jenny. “Soccer keeps her fitter and she has developed a ferocious work ethic and discipline, mainly due to understanding that the most rewarding things are those that are the most challenging.” Sue affirms the “life lessons” ROI, adding that Jenny has learned that “life is not always fair and I can only control what I do, not what others do.” Companies make financial investments in employees from the day they start the search to fill a position. Recruitment costs, base salary, taxes and benefits, office space and equipment, orientation and training all add up to significant dollars. If turnover is high, these dollars go right into the “red” column. Choosing the right person for the job has real fiscal implications. We measure the financial investment in our sales team in concrete ways like room night production and revenue growth. Still, the intangibles must be considered: Are they having fun? Is the team in demand (market value)? Are both personal and team objectives being achieved? Do they have the opportunity for professional and personal growth?
- 9. Coaching. Each player is different and coaching styles must vary. There is no better tool for improving performance than understanding and ministering to an individual player’s needs. What makes a good coach? First and foremost, knowledge of the game, from basic skills to more advanced theory, plus the ability to clearly and effectively communicate that knowledge to the players. Next, staying up-to-date on the latest innovations. A great coach listens with an open mind to new ideas from peers to players and he motivates behind a positive attitude and enthusiasm for the game. The best coaches focus on performance goals, not outcome goals. According to Spencer, most coaching manifestos don’t even mention winning. And win or lose, a great coach acknowledges the successes as well as the failures. As a leader, a coach must be prepared to be a disciplinarian, setting up rules and taking action when the rules are compromised. Above all, the coach must set a good example. Inevitably, the players mirror the coach.
- Game Plan. Coaches start each season with a playbook, much like a hotel’s business plan. A playbook contains scripted plays designed by the coaches to maximize their team’s competitive advantage. The hotel’s playbook is its business plan which also includes the budget, marketing plan staffing guidelines and capital expenditure plan. Once the playbook is complete, a game plan is developed for each week’s opponent. Coaches reach into the playbook to extract the plays (strategies) that give them the best chance to win the game. In a hotel, segment strategies are like game plans. Each should have a clear message, measurable objectives, a focused plan of attack and realistic, achievable expectations tied to the hotel’s budget.
Is your sales team invincible? In today’s leaner workforce, we are all expected to do more with less…a time when “invincibles” really shine and their impact is felt company-wide. Don’t expect them to just show up on your doorstep, however. They are in high demand and must be pursued; once hired, nurtured. “Invincibles” are strong, positive, vocal…visionaries who can see the big picture and motivate others. They are our future leaders. So to end, I turn once again to Billy Shankly, “I want to build a team that’s invincible, so that they have to send a team from bloody Mars to beat us!” Amen, Billy.
Yesterday, Glenn Haussman’s column in Hotel Interactive, “Why Experts Are Begging You to Raise Rates,” added to the rhythmic drumbeat being heard throughout our industry. I wrote an article on the same topic last week, citing research presented by hospitality heavy hitters from around the country. Thanks, Glenn, for keeping the pressure on those who are risk averse when it comes to raising rates. Revenue management principles remain the same yet many in our industry are too timid to move the rate quickly and efficiently when demand (both in the markets and at their hotels) supports the decision. I see this especially prevalent with group business. It’s time to stop emulating Jimmy Neutron (just because your friends are named Cliff, would you jump off them?) and become the leader in our comp set. Sure, we may make a few mistakes, but the revenue stream improvement when we are right will more than make up for it. Count me in!
Cathy Enz, I could kiss you! During the Cornell Hospitality Research Summit last month, Cathy, a Cornell professor, delivered results from her seven-year study of the hotel slump in the U.S. She found that hotels that held rate or priced above their comp set had predictably lower occupancies. But the real kicker: their bigger RevPAR gain more than made up the revenue loss. Bottom line: “Deep discounting doesn’t do much.”
Even the Wall Street Journal is weighing in. An article in October’s Money Hunt, “Raising Prices Pays Off for Some,” Emily Maltby highlights the conundrum facing everyone with a product to sell: Raise prices? Lower prices? Let them ride? In this article, only 12% of the small business owners surveyed were raising prices. A whopping 88% were either lowering prices or holding firm. Research published in the McKinsey Quarterly reveals that rushing to lower prices, even if it attracts more buyers, generally doesn’t put a company ahead. And here I was thinking that the hotel industry was the only one with prices dropping faster than a cliff diver in Acapulco (though not nearly as gracefully).
Remember when you first heard the term “yield management”? Later, along with a little tweaking, yield management became “revenue management” and, lately, I’ve heard the term “revenue optimization” thrown around. Bottom line, isn’t it all about selling rooms at the right time, in the right place, to the right people, with the right length of stay, at the right price?
I understand that this sounds all well and good in theory. But let’s face it—with staff cut-backs and everyone expected to do more with less, research, analysis and strategic planning may be taking a back seat to answering the phone and checking people in. It seems as if each market has a hotel who thinks they can steal business by lowering rate. When everyone else follows suit, they drop their rates once more. They continue with this strategy until the entire market finally fits Einstein’s definition of insanity: doing the same thing over and over again expecting different results.
Some markets have been seeing recovery both in rate and occupancy though in the last couple of weeks, economic research firm e-forecating.com, in conjunction with STR, announced that the Hotel Industry Pulse Index dropped in September. Evangelos Simos, chief economist of e-forecasting.com is concerned. “September’s report gives us pause and provides questions to the sustainability of the U.S. hotel industry recover.” In other words, it ain’t over yet.
So, if you’re going to panic, at least panic constructively. Step back, take a deep breath and consider these suggestions:
Avoid thinking like Jimmy Neutron. Jimmy: “But dad, all my friends are gonna be there!” Hugh: “I know, son, but if all your friends were named Cliff, would you jump off them? I don’t think you would.” In other words, just because hotels in our comp set are lowering their rates, it doesn’t mean we should lower ours, too. We have access to rate-shopping tools designed to monitor comp set pricing tactics. Though handy, sometimes we become too reliant on the data alone, resulting in pricing decisions based on what the competition is doing, not necessarily what is best for us. Stop allowing the competition to control your strategies. Use Revenue Management 101 to move rates higher when it’s right for you.
Value Rules! Let’s take a look at a study recently conducted by Epsilon, a leading marketing services firm. Only a third of the people they surveyed were sure of where they wanted to stay when making a hotel reservation. The number one buying point for all of the customers they surveyed was price. Not that four-letter word RATE. PRICE. Providing value through creative packaging doesn’t mean you have to compromise on rate. The dictionary defines value as “the worth, importance or usefulness of something to somebody.” Create unique meeting packages, value-driven IBT packages and dynamic leisure packages comprised of items that are of significance to the market segment being targeted. When describing them, use benefit statements to reinforce their value.
Channel Management has never been more important. And you won’t hear me go on about dumping the OTA’s. Goodness knows we’ve heard enough about that lately. It’s all about where you distribute your inventory, its value on that channel and, think like an operator here, the profit represented by each booking. It’s the mix that matters. Keep in mind that the only part of revenue that you can take to the bank is the profit.
We’re not in Kansas anymore. There’s no “waiting until we get back to normal.” This is it, Dorothy. Refrain from depending on strategies that were working two years ago. Rate management has become a game of who blinks first. Make adjustments for shorter lead times, different arrival/departure days and more diverse booking channels. Booking windows are much shorter now with last minute deals as common as knockoffs in Chinatown. When making decisions, remember Wethern’s law: Assumption is the mother of all screw-ups.
Reports of rate and occupancy improvement are welcome news but a sustained recovery is dependent on the decisions we make now. It’s time to stop cannibalizing the market and work together to recapture the pricing power that we abandoned in alarm over declining demand. Continuing to participate in mindless price wars is not helping your business which means it’s not really helping the economy either.