State your budget and save time

.. and events will benefit, says John Fisher, Director, FMI Group

When you walk into a shop, with the intention of buying something, you generally have a pretty good idea of how much cash you have in your pocket or what you might expect to pay for the item you are seeking. The only decision then is whether to pay slightly more for slightly better quality. It’s called consumer choice.
So, why is it that when you buy corporate services such as events and travel the buyer almost always says the budget is secret?

There then follows a long and complicated dance between supplier and buyer, trying to guess how much money the other partner has at their disposal. Any travel supplier can provide a room in a barn with straw or a suite in a 5 star hotel…but how much money you have is crucial to that venue search?

The answer from the corporate buyer is often inscrutable. Tell me about your barn, they say…what type of straw is it? Does it have a window? Would this be a twin room? Are there any donkeys in it?

It is blindingly obvious that the buyer is very likely to want a 4-star, business hotel, close to the transport system, which includes meeting facilities. So why do we all have to waste time talking about out-of-town, pop-up properties on industrial estates simply because they may work out to be $10 cheaper per night?

After many days of negotiation it turns out that the client has a fixed project budget of say $50,000 and desperately wanted to include in the programme a hosted visit to a specific world heritage site, for example.

The only reason to be prevaricating about the hotel cost was to release enough cash from the budget to do that once-in-a-lifetime trip for delegates.

As the former US Defense Secretary Donald Rumsfeld was reputed to have said: ‘We don’t know what we don’t know’...his now infamous ‘unknown unknowns’. So it’s very hard to guess what’s in the buyer’s mind when the budget always remains a closed book.

Believe it or not, suppliers are presenting costs every day of the working week and often at weekends. So they are masters at estimating costs at the drop of a hat. With up to say 50 or more cost categories for even the most simple event it is all part of experienced advice to be able to trade one benefit against another and find a solution that matches the budget…if only we knew what it was!

Buyers will no doubt say that by telling a supplier the budget they will be stitched up with a poor bargain. That may have been true in the era of quill pens and horse-drawn carriages. But these days the internet makes costs so transparent that the days of taking advantage of buyers in this way are long gone. Indeed, clients are always the first to remind you that ‘they have just been on the Internet’ and found a much better deal than the one you are offering, so you should try again.

If I know the budget from the outset, I can plan the event in its entirety and offer advice about how to save money on things that don’t really matter and invest in items where quality does matter. I can still provide an itemised cost. So you can cross-check any specific line items such as room rates, if you think you don’t trust my ability to buy well on your behalf.

So, the next time a project comes up, why not just tell the supplier what the overall budget is. That way you get informed and accurate advice about what your budget could actually buy, rather than the dance of dullness that limps on for weeks until such time as neither party no longer wants to be on the dance floor.

Keeping track of delegates
Are hosted buyers the answer?

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