Managing for profit at the last minute

A client recently told me I should refer to the week before an event as the “Golden Week,” because that’s when you make (or lose) all your gold! Last-minute changes under stress can undermine profitability for a myriad of reasons, causing expensive over-booking problems, pulling errors and costly second trips. A change on one order can scramble labor and setup resources across multiple events. Just ask any busy dispatcher, driver or delivery crew member what can go wrong when you make changes at the last minute. You will get an earful.

Alert Management Systems once did a study for its Party Rental Advisory Council, a task force that meets once a year as part of its annual user conference. We asked a simple question: How many reservations change, on average, in the week prior to the event? We pulled data from three large tent and event rental companies, aggregating about 100,000 contract records over multiple years. The stunning answer: more than 70,000, or about 70 percent, had last-minute changes. No wonder there can be so many problems.

A number of best practices for managing last-minute changes were recommended by the advisory council, and they are often incorporated as automated features in event rental software systems. Although there are many more, here are the top four powerful steps you can take to protect your profitability:

1. Reservation confirmation:
   Automating the reservation confirmation process is the single most important factor in reducing last-minute changes. The customer must be able to review and approve the final version of the reservation before it becomes a crisis to make a change.
2. Reservation pull period:
   Automate the process of notifying your reservationists when accessing a reservation in the Pull Period, which is typically set to start one week prior to the event. Reservations in the Pull Period are to be handled with a specific set of “rush” rules that you must communicate and enforce across the company to protect profitability.
3. Real-time warehouse notification: Establish automated procedures for alerting the warehouse staff immediately when any changes occur on a Pull Period order. Ideally, in larger organizations the automated notifications should go to all affected departments, not just the dispatcher’s office. The notification includes a “Change” version of the reservation itself, clearly highlighting any line items that have changed.
4. Reservation change fees:
   Changes made during the Pull Period are potentially expensive and disruptive. Even if you can use the prospect of a nominal fee ($50) to limit the customer to a single session of changes, you are still ahead.

-Tom Ross