A pharma company can hold hundreds, if not thousands, of meetings a year. When meetings occur on such a large scale, it's
easy to lose track of where they are taking place, what vendors are being hired, and if participants are satisfied with the
experience. That loss of control can have a negative impact on a company's bottom line, and on its employee and client satisfaction
ratings. In other words, what you don't know can hurt you.
Pharmaceutical companies allocate up to two percent of gross revenue for events, making it one of the top four controllable
expenses in most corporations. Companies have traditionally targeted air and hotel costs as low-hanging fruit for savings
by procurement departments. But there are many other components to a meeting.
Consolidating data across all meetings can result in significant cost savings, and also can provide powerful strategic information
for sales and marketing, compliance and other departments. In particular, consolidated data allows planners to affect four
You would think that identifying where a pharma company spends its money on meetings would be simple, but most companies do
not have the processes or systems to track meeting activity. Meeting spend is traditionally hidden in divisional budgets,
with each brand spending its own budget in that way that it sees fit.
However, a meetings consolidation program centralizes corporate-wide information, standardizing operational procedures for
tracking meeting activity. That information can then be used to measure services and negotiate preferred contract terms with
Bargaining power In a consolidation program, a tracking system rolls all meeting budgets into a single database. The data provided is often
surprising: Most companies discover that they significantly underestimate their spending. For example, one global pharmaceutical
company estimated that just one of its divisions spent $40 million a year on meetings. After one year of using a consolidation
data collection program, the company tracked almost $50 million and expected final costs to be even higher. This gave them
an incentive to extend the program to several divisions, and then globally. As the company continues to track its spend at
hotel chains, it is well-positioned to negotiate greater room discounts, free meeting space, and food and beverage discounts.
In a decentralized environment, the individuals responsible for planning meetings select vendors, and costs are typically
invisible to the company's procurement department. One pharma company used more than 100 vendors to manage its meeting planning
functions, completely diluting its ability to successfully negotiate vendor offerings. In a consolidation program, companies
can implement a preferred vendor program that limits the number of vendors it uses. In most cases, 100-plus vendors are reduced
to 10 or less. And preferred vendors are more willing to provide aggressive rates for a guaranteed volume of work. In the
end, this allows companies to more effectively manage vendor relationships, improve service, and save costs.
For example, a preferred hotel program (as opposed to booking property-by-property) greatly improves discussions at the national
hotel chain level. Hotel chains are very motivated to offer standard concessions and preferred terms when working with pharma
clients, which book hundreds of meetings a year.
Risk aversion One of the biggest challenges related to meetings is controlling financial risk when changes of plans occur. A centralized
data system can help effectively manage—or avoid—risks in the areas of attrition and re-booking cancelled space. Attrition
penalties accrue when a hotel or caterer is not notified by an established deadline that attendance will be lower than the
initial count. And if your meeting is canceled after a contracted date, your company is liable for a percentage of the cost,
unless you can re-book the meeting at a later date.