Reggie Aggarwal, Founder and CEO of Cvent, speaks in a slow deliberate fashion. When asked to describe his approach to business, he replied, “Running scared always, and the paranoid survive.” Perhaps those hotel managers who do not embrace his computerized group RFP system are the ones who should be scared.
In 2008, Cvent solicited about $60 million worth of meeting RFPs on behalf of prospective meeting planners to hotels in their system. (Meeting value defined as guest room sales plus ancillary charges.) In 2011, just three years later, Cvent's throughput is expected to reach about $4 billion. For perspective, Reggie estimates this to be about 10% of the total worldwide group meeting business. Impressive, yet with lots of room for growth!
Reggie accomplishes this with a staff of 850 that helps manage 500,000 events in 50 countries. These numbers led to a further $136 million investment, which according to the Wall Street Journal, is the biggest US software deal since 2007 and the largest in the history of the events technology industry.
But it wasn't always this way. On 9/11, Mr. Aggarwal's business was a typical, budding dot-com with 126 employees and very limited revenue. When the bubble burst and reality hit, his immediate goal was survival; leading him to shed 80% of Cvent's staff. As he put it, “Sometimes you need to be dumped in cold water to wake up.” Looking retrospectively, he thinks this allowed him to effectively get back to fundamentals.
In speaking with Reggie, he claims success has come from a focus on corporate culture. His team, with over 90% of all senior managers having been with Cvent for ten or more years, thrives on a culture of a company that maintains its innovation and entrepreneurial spirit. Reggie calls this ‘core energy.' His concern is that the outer organizational rings start losing their core energy, and in doing so, it becomes just a ‘job,' something he wants to avoid at all costs.
Cvent's mission is to make it easy for meeting and event planners to do their jobs. Cvent offers four products: an event management solution, strategic meetings management offering, web surveys tool and the Cvent Supplier Network-a free online marketplace that connects event planners with venues. The latter is of particular interest: by offering the Cvent Supplier Network to the planner for free, Cvent is irresistible. After all, why canvass five hotels separately when one single RFP issued and managed through the Cvent system will provide all of the information necessary to make a final decision? Moreover, the Cvent Supplier Network has meetings-specific search criteria and the ability to make apples-to-apples comparisons of RFPs received from venues. For example, while both respectable in their categories, a Four Seasons and a Four Points should probably not be directly compared in an event search.
For the hotel, Cvent offers a wide variety of opportunities on the Cvent Supplier Network from basic listings, through to special promotional programs designed to raise the awareness of the property in front of targeted meeting planners. All of this is priced in accordance with the level of participation that the property seeks. Since a lot of the materials that you use in responding to an RFP are boilerplate, the use of the Cvent system should allow your sales team to focus on the differentiating elements unique to the proposed meeting.
But thinking that participation in Cvent is the panacea to building your property's meeting ‘funnel' is somewhat naïve. According to several hotels that I spoke to, and corroborated by Cvent personnel, Cvent success requires a three-part strategy.
First, make sure that your hotel is in Cvent and that the information is completed in all aspects of the Cvent website (also known as forming a rich profile). As Reggie aptly said, “Hotels need to be where their customers are.” Second, Cvent encourages hotels to respond to RFPs quickly. It makes no sense to do all the work to get an inquiry, only to see the request languish. How fast is adequate? In the world of the Internet, 24 hours appears to be the target response time. Your sales staff should manage accordingly. Third, depending upon your business needs, you might consider some of the promotional packages offered by Cvent within their system. This element of the strategy should be tailored to the individual property, and from my perspective, rationalized along with other marketing programs such as Google Adwords.
With all of this automation, I asked Reggie if a property still needed a sales team and could manage the Cvent system without them. He was adamant that the Cvent Supplier Network was never meant to replace a sales team or to change the relationships between planners and suppliers; rather, it's meant to compliment your current efforts and serve as an additional avenue to get your property in front of highly-qualified prospective planners. Sales staff is still needed to close the sale. Importantly, with Cvent improving the qualification of prospective customers, your sales team will be more focused on closing sales thereby improving their close ratios.
I started my interview with Reggie asking him if he had a vision for Cvent. He replied, “To be the Microsoft Outlook of the industry.” To me, his vision is sound, but perhaps a more appropriate metaphor is the sole OTA of the meeting planner channel. He is well along the way to accomplishing this vision.”
(Article by Larry Mogelonsky, published in eHotelier on January 10, 2012)