Thinking Outside The Vendor RFP Process In Hospitality Digital Marketing
Beyond website design, building a direct online revenue channel encompasses strategy, technology, and marketing expertise.
The Current Vendor RFP Process is Intrinsically Flawed
The RFP fashions a buyer to pick the most qualified service/product and price through an unbiased decision-making process. The RFP process works well for commoditized products (housekeeping supplies, linens, laundry, etc.) where the RFP allows the buyer to compare “apples to apples” to determine the best price and trusted vendor. The RFP does not transfer to the web and in this article we explore why this approach is outdated when it comes to digital marketing in hospitality.
Beyond website design, building a direct online revenue channel encompasses strategy, technology, and marketing expertise. Top digital firms take a robust and comprehensive approach to the web channel by accommodating user behavior on the three screens (desktop, mobile, tablet), tracking website campaigns using analytics, integrating different technologies like dynamic content personalization, dynamic rate marketing, reservation abandonment tools, social media, SEO, SEM, online display advertising to convert more. In addition, there needs to be a core understanding of business needs, budget planning, and industry terminology. In the fast-paced world of web marketing no RFP can truly convey the situation and needs of the hotel company.
Is the hotel set up to fail if charged to initiate an RFP? Who at the hotel is equipped with the latest best practices in web marketing to sufficiently and adequately prepare a vendor RFP? Very few hotel companies have the bandwidth and depth of knowledge to adequately identify the digital needs of the property. Nor can the property adequately describe its wants and needs in the digital space. Who has the bandwidth to be thinking 24 months from now? Lastly, who at the property can afford to devote considerable time to research and prepare a vendor RFP that asks the right questions, conveys the right objectives and provides a solid framework for evaluating and comparing one digital technology and marketing firm to the next?
For the hotel, RFP process can easily takes 50+ hours from beginning to end. On the digital technology and marketing vendor side, time to review, respond, and present takes upwards of 25-40 hours. Typically, three vendors compete and with all parties combined the entire RFP process will cost upwards of $25,000-$30,000. Beyond the cost, this process consumes the time and energy of multiple people and departments who will need to reengage on an average of every two years.
Common observations on the RFP experience:
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It serves as a tool to fulfill administrative requirements or to simply “shop around” when in fact the digital marketing/technology firm has already been privately selected.
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On paper, every digital technology and marketing firm can present itself at its best and can creatively diminish any weaknesses or embellish any strength.
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The hotel does not know what questions to ask to get to the heart of what the hotel needs.
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Digital marketing and technology firms can easily make promises and fall short on delivery and meeting expectations. Over-promising and under-delivering has become modus operandi for a number of players in the industry.
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Some hotel companies never follow up and leave the evaluated vendors in limbo.
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When management changes, the hotel company is more likely to go into a vendor RFP without evaluating the results and contributions of their current vendor, which can disrupt existing relationships and potentially impede the successes to date.
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Given the arduous process of the vendor RFP process, there could be a sense of entitlement on both sides that could result in a mutually caustic relationship from the onset.
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Digital agencies may propose lower costs to win the contract and introduce additional fees later only leading to resentment and regret.
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Hotels will often push needs beyond the original scope in the vendor RFP and use the proposal as leverage to get more services without paying.
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Not all digital agencies are the same but as mentioned, any agency can demonstrate on paper its superiority to solve any problem and deliver any service. Behind the scenes an agency can outsource and end up costing the hotel twice what is originally proposed in additional fees.
Where do we go from here?
Now it is time to look at some alternatives. We describe three models that nicely fit with the hotel industry that could reduce or replace the traditional vendor RFP process outright. Note that more than one model can be used in the evaluation and any engagement still requires that the hotel conduct a standard due diligence, which includes an examination of the agency portfolio, recommendations from existing clients, review of the track record with case studies, and industry reputation.
The Scorecard Model is the most pragmatic of the three alternatives to the vendor RFP process. The most challenging part of the vendor RFP review process is trying to line up each potential digital technology and marketing firm’s response to compare “apples to apples.” The Scorecard enables the hotel company to list the key areas needed to be addressed in list form and eliminates the need for long and drawn out narratives, unless requested.
Each digital firm is scored in the form of a point system or check box. The hotel company can develop its own uniquely designed scorecard or use the HeBS Digital Scorecard as a starting point to evaluate a potential Digital Marketing Partner. Click here to view a sample Digital Technology & Marketing Firm Score Card.
The second model is the Digital Marketing Partner Interview model. While it may resemble the vendor RFP process, the interview is structured to not focus on specific problems but evaluate based on management philosophy, values, and culture. The marriage analogy is appropriate here. A successful marriage is not based on whether the spouse balances the checkbook or shops for the right brand of soda. A successful marriage comes from the underlying values that each person shares.
No two properties are alike and the same applies to potential Digital Marketing Partners. Certain client types fit better with certain agencies. For example, full-service hotels, complete with a restaurant and meeting space, have completely different business needs compared to select-service properties. Not all Digital Marketing Partners are the same and each has its strengths, specialties, weaknesses, and vulnerabilities. Hotel companies should learn and understand the philosophy and values of the potential Digital Marketing Partner to find the right fit. Not all digital marketing firms are the same, especially when it comes to being vertically focused.
At HeBS Digital we recently published an article called “The Top Ten Questions to Ask Your Digital Marketing Partner” that can nicely serve as a starting point for the hotel when it comes time to conducting the Digital Marketing Partner Interview.
Sample questions that can be used for the Digital Marketing Partner Interview:
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Do you understand the unique needs of the hospitality industry?
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How does your agency view OTAs in the hotel’s online revenue mix?
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How will you structure the support team for my account?
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Which services will be provided by a third-party?
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How often do you recommend senior management meet to discuss progress?
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What are your procedures for handling conflict with the client agency relationship?
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Do you have clients in the same hotel class as ours? Can I interview a couple of these clients?
The Digital Marketing Partner Interview allows the hotel company to identify, and over time, embrace the Trusted Partner model which is a mutually beneficial and evolving relationship built with a long-term commitment to each other. In this scenario, the Trusted Partner becomes an extension of the hotel company’s team and part of its brain trust. This Trusted Partner works toward common goals and objectives and provides solutions and solves business needs. The more the property invests in the knowledge and expertise of the Trusted Partner, the more the agency can invest back in customer service, timely turnaround, and scale allowing the hotel to focus on what it does best – sell rooms.
The Trusted Partner Model makes both the hotel company and digital firm owners in the success of the relationship. A proactive digital firm continually brings new ideas, latest trends, and best practices to the client. The hotel company embraces these new ideas and takes meaningful risks to rise above the norm. At HeBS Digital we often incorporate hotel clients – large and small – in pilots, betas, A/B tests to evaluate avant-garde technologies or innovative digital marketing initiatives and, based on positive results, implement these new solutions to the benefit of our hotel clients.
Characteristics of the Trusted Partner Model:
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Committing to each other
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Addressing problems/concerns upfront
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Respecting lines of communication
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Maintaining realistic turnaround times and expectations
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Treating each other fairly and equally
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Willingness to learn and listen
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Partnering in pilots and taking mutual risks
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Billing transparency and timely payments