Solve Vanishing Lead Time
Has booking lead time for your jobs vanished? Try these customer retention management strategies to make booking lead time reappear and boost profits in the process.
By Tom Ross | August 2014
In the later stages of the recent recession, Alert Management Systems was approached for help by one of its largest tent and event rental clients, a company responsible for supplying tents and equipment for thousands of events each year.
Although business was good and overall rental revenue was increasing by more than 30 percent per year, the owner was concerned that the business climate had changed in a subtle but extremely important and difficult metric. She was convinced that critical booking lead time was vanishing. The company was feeling the strain and expense of last-minute emergencies like never before.
Heroic “saves” were beginning to feel almost routine, even for large, prestigious events. Her hunch was that her clients were running increasingly lean in their own staffing and budgets, and that the recession had forever accelerated client expectations, making large events harder to manage profitably.
The last week before each event was particularly chaotic and expensive because of increases in the number of last-minute changes and the need for expensive subrentals or rush purchases to handle overbookings.
While the company’s service desk was adept at handling a backyard barbeque that suddenly grew into a block party a week prior to the event, managers and planners were used to having months or even a year to plan for a major charity ball or an outdoor wine festival with a hundred tents. The time crunch was affecting resources and morale throughout the company, especially with the increase in overall business volume.
To help the business owner analyze this customer retention problem, we developed a special report with our report writing software that measured over several years of data the booking lead time between the initial bid and the confirmed reservation for thousands of events.
After crunching the numbers, our lead time analysis discovered the owner’s intuition was correct, especially for events that were more than $5,000. Average booking lead time before reservation confirmation had dropped by an astonishing 18 days from the previous year’s average.
A key insight of this lead time analysis was that most of the larger events were annual, suggesting that the rental company should take steps to encourage customer retention and earlier confirmation for annual events.
Customer Retention Management Solution #1:
Focus on annual events
How well you handle annual events is critical because you can plan as much as a year in advance versus perpetually playing catch-up. Here are some customer retention management suggestions based on input from Alert customers.
- Identify all events that are annual or otherwise recurring in your computer system at the time you take the reservation and establish a system to track, monitor and assign responsibility for annual events on a monthly basis.
- For many events, a great way to get started earlier for next year is by sharing photos or short (AVI or iPhone®) videos of the just-completed event in a meeting with your client as part of your quality review process.
- When it is time to present a specific proposal, clone last year’s reservation—with this year’s prices—and get it to the decision maker or project manager with suggestions for making next year’s event even better. For even higher rates of customer retention, include a critical path (ideally, a series of sensible deadlines) showing specific dates for consultation and confirmation of each event component.
- Use photos or videos as attachments to your proposals to set the mood in your negotiations for next year. Using the latest event rental software, event media and other documents can be stored as an integral part of the digital contract file automatically. No paper needed!
- The more specific details you provide, the easier it will be for your client to make an earlier decision. Use contact management software features to prompt staff to send personalized reminders (via email or print, according to customer preference) to help stay on schedule and confirm reservations as early as possible. You can even send timely alerts via text (SMS) to help keep the event planning process on track.
Customer Retention Management Solution #2:
Early-bird offers and other incentives
Because booking lead time is valuable even for a one-time event, why not create an early-bird incentive as part of all your bids? It can be set up as a redeemable coupon in your proposal, which your computer system can easily track, and expires if it is not redeemed in time. Some studies have shown that an offer like this is better if it is expressed in dollars ($300 off, for example). A percentage discount (10 percent off, for example) is less tangible, but it has the advantage of moving up or down with the size of the event.
Either way, making highly specific, time-sensitive offers is the key to getting measurable results. If your software is capable, you can monitor how much the incentive “cost” you (if you weren’t going to provide a discount anyway) to determine your actual ROI.
It may seem that booking lead time vanished into thin air with the recession. But making it reappear doesn’t require a magician’s trick—just sound, measurable customer retention management strategies that make it easy for clients to choose you early in their planning process.
Original article published on InTents Magazine. Original post can be found here