Lead Spam and the Commoditization of the Meetings Industry – Some Answers

Last week we discussed a disturbing trend observed in both the U.S. and Canada: the increasing number of multiple leads sent to hotels and CVBs, for the same piece of business, from competing third-party planners and site selection companies, often using multiple electronic channels.

This is what we’ve come to refer to lead spam.

It’s a situation that creates confusion amongst different sales contacts (for instance at a brand’s group desk and at property level), wastes time and often generates unnecessary work.  I see it as one more unfortunate move towards the commoditization of hotels, CVBs and even other meetings industry suppliers.  Soon, if suppliers don't wake up, organization will do away with sales managers and just replace them with people who can process electronic leads.  GONE will be the relationships so many meeting professionals love this industry for.

Scary scenario, isn't it?  But what can be done about the situation?

I questioned Kristi Casey Sanders, VP Creative/Chief Storyteller for Atlanta Metropolitan Publishing, publisher of Plan Your Meetings, billed as “a free educational and social resource for meeting and event planners.”  Kristi’s tweets were the ones that originally alerted me to this trend.

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'm not quite sure how this happens, but I don't see any gray area on this point. If you were not hired by the planner to source their meeting, intercepting the business and acting as a representative is confusing at best. I realize that the proliferation of non-professional planners in this industry may make some of them easy prey for this kind of poaching, but third-parties and site selection firms need to be direct about their intentions. And if they are going to send out RFPs on a planner's behalf, the planner should be contracted to them so they understand they shouldn't be asking other people to do the same thing.

Do end users – corporate, association and government groups – realize what burden this issue is placing on suppliers, potentially increasing the cost of doing business?

I don't think they do, unless they've been in an educational session that addresses it. They are outsourcing the work or using online systems where they can send as many RFPs to as many properties as they want. Or they're sitting by their email inboxes cursing hotels for not getting back to them, completely oblivious to the reason why so many RFPs go unanswered.

What are industry associations, MPI, PCMA, and others, doing to open up the dialogue and bring attention to the issue?

I know Mike Mason, the ZEO of Zentila is a tireless advocate for the end of lead spam. He's been leading sessions that address this and how to craft better RFPs for our 2012 PYM LIVE Events. He also is a prolific writer, who has written columns about this for different publications. But I don't know that this is on the association radar yet. The focus on education there tends to be mostly towards strategic meeting management, new trends in meeting design, technology and budgeting tips.

Lastly should the recipients of lead spam willing to DO to counteract this trend?  

I know that on the hotel side, a lot of properties are signing up with Zentila, an online sourcing engine that specializes in booking short-term meetings. The planners using the system are restricted to contacting only a handful of properties. Those properties see who they're bidding against and are notified when the business goes elsewhere, so it closes the loop and incentivizes hotel sales teams to reply to the RFPs within a 3-hour window. It was basically designed to solve the pain of lead spam and the circumstances that were creating it. 

I think on the planning side, meeting and event planners need to be more concise with their RFPs and stay involved in the sourcing process. Narrow your focus to what could work for your group instead of sending out a scattershot call for bids. 

If planners do outsource their site selection process, they need to ask their vendor how the RFP process is conducted.  Some large independent third party franchises teach their people to send massive amounts of RFPs out rather than targeting their requests with the philosophy that more options will increase the chance of securing lower rates. I think that all it does is perpetuate the lead spam problem and shows a disregard for what makes a group unique. That's why I (and many independent planners) draw a big distinction between these big-box third parties and boutique planning firms. 

Hoteliers often carp about how bad and incomplete the RFPs they get from planners are. But I hear the same thing from planners: that what they receive from the hotels aren't filled out or filled out wrong. The CIC tried years ago to standardize RFPs with APEX software to streamline the process, but the only really attractive user-friendly version I've seen is what Zentila launched this year.  

That's key: You've got to make things simple, easy and fun to use, otherwise the people planning meetings are going to continue to abandon this part of the process. When they do, it falls to the third parties and independents who are just trying to get business and make a commission, which creates the vicious lead-spam cycle.

We thank Kristi for bringing us these insightful comments.

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!