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Lead Spam and the Increasing Commoditization of the Meetings Industry

It started with a stream of tweets earlier this summer by PYMLive, the live event Twitter account of Plan Your Meetings (PYM), a “free educational and social resource for people who plan corporate meetings and events”:
What's going on with hotels: 2 yrs ago they were sucking wind. Today, RFP volume has increased by 300% from 2006-2007
Despite having 300% [increase] in demand, hotels only close 1/5 of what they had closed- less than 3% of RFPs [because] of lead spam! 
Lead spam is crushing hotel sales teams!
Hoteliers get the same lead from multiple sources because of third parties. It wastes time to answer all those leads
When I questioned what, exactly, was meant by “lead spam” @PYMLive explained:  “eRFPs [are] sent out to 18-20 properties [instead of] 4-8. One hotelier said that they'll sometimes get the same RFP from 3 [different third-parties].  The author was reporting from one of the Plan Your Meeting (PYM) Live 2012 event at the Westin in Charlotte, NC.

This got me thinking… was this yet one more sign of the increasing commoditization of the meetings industry?  So I posted a poll on LinkedIn asking, “On average, how often does your hotel, meeting venue or CVB receive the SAME lead from multiple channels or sources?”

With only 17 respondents, this poll won’t give us more than a tiny glimpse into the state of the industry.  But I thought it was revealing that none of the respondents said that lead spam was NOT a factor.  Two-thirds (11 of 17) said they encountered lead spam on average once to three times per month.  Three people said they faced this issue one to four times per week, and another three said five or more times per week.

Admittedly a few responses to a poll or posts on a social media platform do not make a trend.  But where there’s smoke, there is fire…

One-on-one conversations with colleagues and clients put a different spin on the story.  One corporate director of sales & marketing of a major hotel brand said her central reservation group desk is plagued with multiple leads for what is obviously the same piece of business.  She complained that it wastes countless hours of her staff’s time, and demoralizes them because they see responding to these leads as an almost total waste of time.  Processing these leads also erodes the group desk’s credibility with their hotels because very few ever convert to definite business.

At property level, one Midwest hotel director of sales confided that he had instructed his sales managers to ignore leads from certain third-party site selection companies.  “Especially when the group history doesn’t indicate a pattern of travel to the Midwest, why would we waste our time responding when we know they’ll likely go to Vegas or Orlando?”

The issue seems to be affecting hotels much more than Convention and Visitor Bureaus (CVBs).  This could be because some CVBs are measured on the volume of leads they produce, versus the number of room-nights they close.  Lead spam in some cases could be favouring some CVBs’ position.

I see this as an ethical issue that sooner or later should push the industry to action:
  • Is it ethical for third-party planners or site selection firms to field RFPs if they have not been given the mandate by the end user?  I realize this is how some firms position themselves to get the business (“Let me get this out to our partner suppliers, and then you make the decision to hire us”), but is it right?
  • Do end users – corporate, association and government groups – realize what burden this issue is placing on suppliers, potentially increasing the cost of doing business?
  • What are industry associations, MPI, PCMA, and others, doing to open up the dialogue and bring attention to the issue?
  • Lastly, but more importantly, what are the recipients of lead spam willing to DO to counteract this trend?  Will hoteliers finally stand up and say, “No more” or will they continue to bow down and hope to scrape by?  What should assertive meetings industry suppliers, those that don’t want to play these games, do to attract business that is genuinely qualified?
Stay tuned for next week’s post for some answers!