Overcoming Rate Resistance—Among the Sales Staff

Conversations stopped as Fran walked into the meeting room where the sales staff of the 263-room Park View Hotel had gathered. The director of sales surveyed the anxious faces that turned toward her as she approached.

" Lighten up, folks," Fran said reassuringly. "This is a strategy session, not a wake. I know you’re all aware I had a meeting with the general manager last week, and he’d like us to make a few changes to our marketing plan. I’d like us to sit down together and brainstorm ways to solve some problems we identified in our meeting."

Fran passed around a handout as the salespeople took their seats. The objections started as soon as they began reading the agenda.

" Get rid of 5,000 room nights of our corporate contract business? That’s crazy!" said Angela. "Most of my best accounts are corporate preferred. I worked hard to get those accounts and I’m not dropping them now."

" Where are we going to find the customers to replace these 5,000 room nights?" Michael asked. "You can’t just expect that kind of new business to come strolling through the door right away."

Murmurs of agreement filled the room. "And how am I supposed to break it to my accounts that they’re not going to get their preferred rate any more?" asked Tanisha. "I wouldn’t know what to say, and I don’t think I could sound real convincing."

Fran raised her hands. "Let’s take this one step at a time. Here’s the situation. The hotel has too much contracted business at a low rate. We need to replace about a third of this business – about 5,000 room nights – with higher rated transient and group business. I just want to evaluate which accounts we should keep, which ones might accept a higher – but still discounted – rate, and which ones don’t make good business sense to keep."

Fran stood up next to a flip chart and uncapped a marker. "Let’s set up some criteria for reviewing our contract accounts. What kinds of things should we look at? I’ll start."< span> She wrote, "Keep accounts with attractive arrival/departure patterns."

She continued to write as the staff began calling out ideas.

After a refreshment break, Fran called the group together again. "Great work, folks. Now, let’s think about how we’re going to replace that contract business with some new business that will bring in more revenue. I’d like to make a list of market segments and sources we could solicit more strongly. Then we can evaluate which areas we should concentrate our sales efforts on. Any ideas?" Fran worked the flip chart again.

That job done, Fran turned to the issue that Tanisha brought up earlier: how to tell clients about the change in the hotel’s corporate preferred rate policy. Together, the staff decided they would be more comfortable and effective if they had scripts to work from.

Fran assigned two of the sales staff to write some scripts that everyone could use when talking with their accounts, whether they were increasing their rate or eliminating their preferred rate. As the meeting adjourned, Fran still heard grumbles from some of the salespeople. "My work’s not done yet," she thought, and began planning her next steps for helping her staff accept these new rate changes.

Discussion Questions

1. What are some of the criteria the sales staff should use to evaluate whether a corporate contract account should be retained or dropped?

2. What factors should the staff consider when determining new sources of business to replace the displaced contract business?

3. What would the scripts look like that the sales staff could use when talking to clients about the rate change? Write an actual script.

4. How can Fran help her staff become comfortable with the changes in the hotel’s rate structure?