Quality vs. Price: Going Through Procurement

• Business moves in cycles: In good times, companies invest, build, and become more magnanimous; in lean times, they tighten their belts. But with every ebb and flow of the economy, there seems to be a net increase in cost-consciousness. Companies always seem to emerge from volatility more streamlined than they were before.

• For meeting planners, that trend has heralded a shift in their transactions. In the past, many planners have been more or less autonomous, perhaps because other executives saw them as the experts with all the right connections. Corporate event planning was relationship-based. • But now, especially at larger companies, there’s a pronounced emphasis on return on investment (ROI). As a result, meeting-related contracts and preferred-vendor relationships are likely to be negotiated through the company’s procurement department.

That’s supposed to be good for the bottom line. But meeting planners know that without proper guidance, procurement departments are likely to make mistakes in choosing meeting vendors—mistakes which may, perversely, lower long-term ROI. Because they are not experienced in the day-to-day realities of events and meetings, they may not recognize situations where the best value does not necessarily mean the lowest cost. Hotel space, catered meals, audio-visual setups, keynote speakers, and the like are not simple commodities; they are complex entities with subtle differences in added value.

So in a time when planning meetings may mean getting purchasing approval from the company’s procurement department, how can event planners communicate their needs and continue to plan outstanding events?

The Experience Gap

Procurement departments like to create preferred-vendor relationships based on volume sales. They also tend to gravitate toward single-vendor solutions in which one provider can address multiple needs.

But this tendency can edge out vendors who have formed long-term working relationships with event planners. And strong relationships can mean the difference between a hiccup and a catastrophe during the course of an event.

Things go wrong during meetings and conferences. Planes are delayed, boxes are lost, computers refuse to play PowerPoint presentations. It’s inevitable, and part of the meeting planner’s job is to make quick adjustments and find remedies. They might, for example, work with the venue to rebook rooms for later times or scramble for a replacement laptop.