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May 12, 2010

John Hooker:The value of a service supplier

The director of JHCP, which specialises in change management programmes for the meetings, events and hospitality industry, calls for a re-evaluation of the role of the service supplier.

In today’s world of cost constraint, among a myriad of other challenges, it’s too easy to forget the value that service suppliers in the events industry really offer buyers within the supply chain.

It’s far easier, it seems, to be able to somehow ‘get a feel’ for the cost of a room or a transfer than it is to put a price on the value of a service, whether expressed in hours or as a fixed fee.

Going direct is, therefore, seen by some to be a value route, especially when buying accommodation and/or ground services straight from the vendor. 

There is a myth, too, that buying direct gets a better price. While this is sometimes true, in a large number of markets, the best price can be achieved through local specialists, such as destination management companies (DMCs), which have the relationships and purchasing power that results in a keen price – even with a profit margin for the supplier.

Making assumptions
So all is perceived to be fine until either a volcano sneezes or the reality of managing a room block 3,000 miles away becomes a challenge. It’s then that service supplier becomes the ‘ash free opening in the skies’, and the assumption is made that they will sort the problem and stem the lava flow as part of the ‘service’ simply because they are on location and know that particular venue or supplier.

But has this ‘service’ element been agreed in advance by either party, or is it the assumption that the supplier will blow away the smoke in order to protect those elements of the ground programme that have been confirmed?

Fairer collaboration
Look at it this way: have you tried asking the plumber, when he is fixing your tap, to re-hang the door in the hallway while he’s at it, just because he has a screwdriver – and for no recompense?

This is often the case when it comes to clients and agents suddenly finding they have management issues with, say, a hotel or even a restaurant that they contracted direct. Instead of jumping on the train (more reliable than a plane these days) and meeting onsite to sort out the issue, it is all too easy to ask the local DMC to dig out their screwdriver and go fix the problem.

The supplier, most likely the DMC, invariably finds themselves in a no win situation and caves in to the request. The result is someone gets screwed because someone else does not want to get screwed. Not an ideal form of collaboration that is for sure.

Loud and clear
The problem within the industry is that expectations are not really laid out from the outset, and that can be as much the fault of the agent to the corporate or the DMC to the agent. 

We also need to value the expertise and specialisation that each service supplier adds, and that means a thorough evaluation of their service proposition.

So whether you’re an agent or a DMC, a production house or a freelance specialist, make sure you are clear about what you provide, the cost of providing it, how you really do add value and why it’s worth paying the price.

John Hooker is the founder of JHCP and specialises in change management programmes in the meetings, events and hospitality sectors globally

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