Master Hogan Copy 2012 Update Effective Sales Management Planning Forecasting Budgeting
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This document summarizes a presentation on effective sales management given by Dr. John J. Hogan. The presentation covers four main topics: mapping out a sales plan by acquiring customer knowledge and planning market mix; preparing and revising sales forecasts by knowing competition and price policies; aligning expense budgets with forecasts by reexamining budgets and re-bidding contracts; and evaluating opportunities by examining amenities and credit policies and monitoring cash flow. The presentation provides practical advice in short sections on each of these topics to help attendees improve their sales management.
Master Hogan Copy 2012 Update Effective Sales Management Planning Forecasting Budgeting
- 1. Effective Sales Management: Short and Long-term Planning, Forecasting, and Expense Budgeting Why are we here today? Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 1
- 2. John J. Hogan, Ph.D., CHE, CHA, MHS A career hotelier and educator, with 35 years experience Industry certified; past recipient of the American Hotel & Lodging Association’s Pearson Award for Excellence in Lodging Journalism, as well as operational and marketing awards from international brands Author of weekly columns for a number of global online services - published more than 400 articles and columns Co-authored LESSONS FROM THE FIELD – a COMMON SENSE APPROACH TO EFFECTIVE HOTEL SALES Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 2
- 3. John J. Hogan, Ph.D., CHE, CHA, MHS Clients are associations, international brands, management groups, convention bureaus, academic institutions Taught college level courses at three different universities over a 20-year period, while managing with Sheraton, Hilton, Omni and independents Created/developed a blended learning system as Director of Education & Cultural Diversity for world’s largest hotel chain Has conducted an estimated 3,200 workshops and classes in career Expertise and Research Interest includes: 1. sales management and training 2. turn-around and revenue management 3. professional development 4. customer service 5. leadership and executive education Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 3
- 4. Agenda 1. Mapping out Your Sales Plan 2. Preparing and Revising Your Sales Forecast 3. Aligning Your Expense Budget With Your Forecast and Sales Plan 4. Practical Approaches to Opportunities in the Market Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 4
- 5. Mapping out Your Sales Plan Acquire & use good selling knowledge • Finding out who your customers are • where they are coming from • how they came to select your business/product • why they use your business/product • how often will they need you and how much they spend Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 5
- 6. Mapping out Your Sales Plan Plan A Good Market Mix It is extremely hard to be all things to all people all the time, which means knowing your proper customer base. While one does not want to turn away potential, understanding the mix of business reflects how much of what type of business you're doing. Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 6
- 7. Mapping out Your Sales Plan Try New Things • FACT: most successful entrepreneurs would not be where they are today if they didn't take a chance and try new things. • Come up with new ideas to promote business and don't be afraid to put them into action. • Examples - Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 7
- 8. Preparing & Revising Your Sales Forecast Know Your Competition – specifically your direct competitors. A thorough knowledge of the competition can help you size up your strengths/weaknesses and determine where you can compete the best: is it location, price, size, product, service or amenities? The idea, of course, is to sell your positives and to expand your market share profitably. Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 8
- 9. Preparing & Revising Your Sales Forecast Research & qualify your multiple price policy Understanding/measuring selective discounting. Do you know which special rates are generating business for you? Periodic reviews of all rates help establish the multiple-rate policy that's right for you. 3rd party sites – evaluate if they help your profitability and/or cash flow. Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 9
- 10. Preparing & Revising Your Sales Forecast Sell Aggressively! • Aggressive and assertive are not synonyms. • One means hard hitting and the other confident – in challenging economic times, those professionals in sales must have some of both attributes to book the business. • One can be aggressive while still being friendly, credible and sincere. • Being tenacious, following up and ensuring customer confidence all add up to success. Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 10
- 11. Aligning Your Expense Budget With Your Forecast and Sales Plan Re-examine all operating budgets • Annual budgets usually prepared 6 months before the beginning of any year in advance, which often means projections could be as far out as 15-18 months. • While most of us projected potential trouble in 2009, few of us anticipated the international financial meltdown that unraveled in late summer/fall 2008. • It is time to re-evaluate all operating budgets immediately and determine planning for action steps that need to be taken NOW. Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 11
- 12. Aligning Your Expense Budget With Your Forecast and Sales Plan Initiate aggressive, but realistic goals for achieving specific expense savings • Link to changes in the operating budgets you have just re-forecasted. • There will be revenue lines projected at lower levels and the expenses associated with them should be identified. • Zero-based budgeting – positives and negatives Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 12
- 13. Aligning Your Expense Budget With Your Forecast and Sales Plan Competitively re-bid all significant vendor and supplier contracts • It is not being suggested to break contracts, but every company in every industry is feeling strained resources these days. • Discussions on terms, pricing, quantities, payment schedules and other factors are all items that should be analyzed short term and ongoing. • A wide range of services and products, including utility purchasing options that might offer incentives or access through energy cooperatives. Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 13
- 14. Practical Approaches to Opportunities in the Market Evaluate carefully product/guest amenities • Straight forward decision if you are independent • If part of a brand, there are agreed upon standards that perhaps may be delivered in alternate ways. • Chain management may be open to options if the guest experience is not diminished. • Consider approaches that are green in nature and a service that is optional rather than wasted or unused products that requires staff services Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 14
- 15. Practical Approaches to Opportunities in the Market Examine every part of your credit policy • Credit is an essential part of the business cycle • The current global financial crisis is at least partially mired due to credit snafus. • Are you in fact are lending the use of money when extending credit? • What is your proper balance when considering the use of credit as a potential feature? • Care must be used when considering credit – even large companies have been known to renege on credit yet it can be an important point of difference. Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 15
- 16. Practical Approaches to Opportunities in the Market Plan and monitor Monthly cash flow (forecasted and actual) • Too many entrepreneurs new to an industry disregard the difference between cash flow and profits • Even some veterans do not fully appreciate the value of monitoring cash flow. • While any business needs both to survive, cash flow is the more indispensable of the two. • Cash flow basically refers to the flow of cash into and out of a business over a period of time - what is needed to keep the doors open while trying to make a profit. • Without adequate cash, one cannot pay suppliers, taxes, meet payroll, market itself or operate professionally. If an adequate cash flow is not maintained, there is the very real danger of bankruptcy or going out of business. Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 16
- 17. Practical Approaches to Opportunities in the Market • Planning & monitoring inflows/outflows of cash = top priority • Planning ahead for seasonal fluctuations and unexpected emergencies allows for dealing with challenges and at least partially reduces stress. • Knowing where you are in cash positioning allows you to also maintain more open and constructive relationships with suppliers, banks, staff and business partners. • By monitoring cash, you can better anticipate potential problem spots & conceivably lessen or avoid a liquidity crisis. • In this type of economy, the potential for shortfall in business levels is real, which means cash flow will likely be diminished. • Being able to deal with this underperformance in advance will definitely help bridge the challenge. Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 17
- 18. Maximizing Involvement and Results Recap Mapping out Your Sales Plan Acquiring and Using Good Selling Knowledge Planning a Good Market Mix Trying New Things Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 18
- 19. Maximizing Involvement and Results Recap Preparing and Revising Your Sales Forecast Knowing Your Competition and Specifically Your Direct Competitors Researching and Qualifying Your Multiple Price Policy Selling Aggressively Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 19
- 20. Maximizing Involvement and Results Recap Aligning Your Expense Budget With Your Forecast and Sales Plan Re-Examining All Operating Budgets Initiating Aggressive, but Realistic Goals for Achieving Specific Expense Savings Competitively Re-Bidding All Significant Vendor and Supplier Contracts Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 20
- 21. Maximizing Involvement and Results Recap Practical Approaches to Opportunities in the Market Carefully Evaluating All Amenities and Packages in Your Offerings Examining Every Part of Your Credit Policy and Practice Planning and Monitoring Monthly Cash Flow (Forecasted and Actual) Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 21
- 22. Contact Information Membership and Learning Resources www.HospitalityEducators.com [email protected] Speaking Engagements, Hospitality Consulting, Training, Expert Witness, Litigation Support www.HoganHospitality.com [email protected] Sites Under Construction for Online Learning www.HotelTrainingToYou.com; www.HospitalityTrainingToYou.com 602-799-5375 Direct Line Dr. John Hogan, CHA CHE CMHS Copyright 2012 Dr. John Hogan, CHA CHE CMHS All Rights Reserved
- 23. Questions/Comments? THANK YOU! John J. Hogan, Ph.D., CHE, CHA, MHS [email protected] 602-799-5375 Copyright 2012 All rights reserved 4/13/2012 Dr. John J. Hogan 23