What are the profit centers in your hotel? You probably think of conferences, weddings, parties, meetings, tourists and other visitors. But there's another way you can add to profits without adding any more products or services. I call it "The Hidden Profit Center", and it exists in all types of business organization—including your hotel.
One definition of a profit center is "an activity or group of activities that create revenue". The Hidden Profit Center can be found and exploited through the use of applied communication in a way that gets things done well. What does that mean, and how does it create revenue?
There's a great deal of talk in business about the importance of communication, but I find that usually that's all it is: talk. That's because most people haven't made the connection between communication skills and the bottom line. The line is there, but only if we're talking about applied communication. This doesn't mean promotional or marketing communications; it doesn't mean annual reports and other messages to the public; it doesn't mean news releases and shareholder announcements.
The skills of communication are fairly simple to define: writing, reading, speaking, listening and non-verbal communication such as body language, tone of voice and expression. Applied communication is the term I use to mean the myriad ways we use these skills in the interactions we engage in every single day at work. Poor performance in these areas is costing North American business millions of dollars every year, and your hotel is no exception.
Here are three examples that may sound familiar.
- After the conference is over, the meeting planner refuses to pay for unused bedrooms. She says she didn't know about this provision, even though you know there is an "attrition clause" in your contract.
One of the most common barriers to clear communication is the inappropriate use of jargon. Jargon is a useful communication device when used within a group of people who all understand and use the same "inside language". It's inappropriate whenever we move outside that group, including dealing with clients. You know what an attrition clause is, and you know where to find it in your contract. But don't assume your client will know. And even mentioning its existence isn't the answer, because a peculiar thing about jargon is that people rarely admit they don't understand it, so your client will probably just nod agreement.
The result can be lost immediate revenue, possible follow-up expense to recover the money, and certainly loss of future business from this client—as well as others to whom they spread the word of their poor experience with your hotel.
So what can you do? I suggest you refer to the attrition clause either during your sales conversation with the client or in the letter enclosing the contract—or both. You may do this already, but the important thing is how you say it. Here's some possible wording:
"Ms Client, please take a look at paragraph 23 on page 3 of the contract. It's called the attrition clause. In our discussion, you agreed that your attendees would use xx bedrooms in connection with the event. The attrition clause provides that if you don't use all these rooms, you must pay $xx for each room short of xx. For example, if you use just xx rooms, you will owe $xx. If any of this is not clear, do give me a call and I'll be happy to answer any questions you may have."
Now, since this is all plain, straightforward language, the client has no excuse for pleading ignorance of the contract provision.
- A salesperson talks in glowing terms to a prospective client about your state-of-the-art exercise facility and swimming pool, only to lose out because the group consists of elderly people, many of whom have disabilities. Efforts to backtrack fail dismally.
Whenever I work with salespeople, they glibly tell me they "sell benefits, not features", but unfortunately I've too often found those same people don't really know the difference! An exercise facility is a feature of your hotel. It may well be a feature of which everyone is very proud, but it's still just a feature. The difference is that a feature is something important to you, while a benefit is what's important to your client.
Let's go back to that exercise facility and pool. If you are trying to obtain a conference whose attendees are young professionals whose lifestyle might be assumed to include exercise, the benefit to them might be the ability to stay fit during the conference by not interrupting their workout routine. If you know the attendees will have children with them, a benefit might be peace of mind because you provide supervised swimming for them while the adults are at the conference sessions. If the group consists of elderly people with disabilities, then your exercise facility probably doesn't represent a benefit for them.
Don't be guilty of "feature dump" selling. It's poor communication at its most expensive.
- A client calls with a question before a booked event, only to find the salesperson has no more answers because it has now been passed along to the catering people. The client knows nobody in the Catering Department.
This is the ultimate turn-off for someone who has just entrusted the success of an event to your hotel. The unspoken message is that the client doesn't matter to you any more and you are on to more important matters. Oh you may not intend it that way, but that's the message that comes across loud and clear! If the answer the client needs is indeed available from Catering, you have three choices. You could pass the client along to Catering, but at least provide the name and extension number of the right person; you could offer to obtain the information from Catering and call the client back—making sure you do actually call back; or you could bring the appropriate Catering person on the line and introduce him or her to your client, reiterating the client's question before excusing yourself politely from the conversation.
The last method is the best communication, the best client service and the best relationship building device.
If these and the many other possible examples of poor applied communication are happening in your hotel, they are costing you money. Make a point of educating people to reverse the process and plug this revenue drain, and you have found a profit center that already exists in your hotel, just ready and waiting to be exploited.
About the Author
Helen Wilkie is a professional speaker, workshop facilitator and author of "The Hidden Profit Center—a tale of profits lost and found through communication". Visit www.HiddenProfitCenter.com or www.mhwcom.com. Reach Helen at 416-966-5023 or hwilkie@mhwcom.com and find out how she can help you find and exploit YOUR hotel's Hidden Profit Center.
Information on Helen's book 'The Hidden Profit Center'.
