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Why Do Sales People Always Fight With Operations?

Profile photo of Steve DiGioia Submitted by Steve DiGioia March 28, 2016

When I previously discussed this topic on one of the popular hospitality websites last year I got a lot of grief from those in the “sales” side of the business.  They thought I was being too harsh and putting the blame on them for all the ills of bad service.  Now it’s your time to judge for yourself.

2-Men-Fighting

In the world of business there are many components that make up a successful venture. All must work as a team with one vision in mind, the health and prosperity of the company. But business is also a daily battle.

The procurement/purchasing department is responsible for getting the necessary goods in house that are needed to manufacture a product or support a service. But they are bound with the task of not getting more than is needed or risk having too much available capital tied up in inventory. That makes sense.

But what if they are tightening their belt a little too much and under-order based on business needs? This will negatively affect the customer in some way.

The marketing department is responsible for spreading the word about the product(s) or service a business offers. Regardless of their methods; through print, television or internet advertisements, through social media and direct mailings, they are the driving force that keeps the company’s name/product on the public’s lips.

Much is dependent on their successful marketing efforts. If they fail, any potential new customers, as well as existing customers, will not learn of the benefits of the business.

Let’s now focus on the two departments that are the front-line of the most businesses; Sales and Operations. This is where the predictable differences (battles) lay when it comes to which is more important.

No industry is better represented with this challenge than that of my industry – “hospitality“, hotels in fact.

There is friction between those who “bring the business in vs those that make it happen”.

Each has a distinct, and conflicting, view on how it should be done.

Sales

Most hotel sales people are broken down into two categories; room sales and meeting space. Room sales will focus on “getting heads-in-beds” and booking as many rooms as possible, whether through individual guest bookings or group business.

Those in charge of booking meeting space are further segmented into corporate business, social bookings (birthday parties, anniversary parties, etc.), weddings and maybe even golf events if applicable. There is even a SMERF category, which stands for Sports, Military, Entertainment, Religious and Fraternal.

The sales staff all have one thing in mind, to book as much business as possible. And why not, their compensation is based on a percentage of revenue generated from the events booked. If they don’t book, the hotel will not have any business and the sales person will not get paid. Seems cut and dry to most.

The restaurant manager usually doesn’t need to worry if sales are down because their job performance is not based on that. The housekeepers hourly rate is not affected when sales are down, though yes, their overall hours may be lowered.  The front desk agent still gets paid even with a poor performing sales staff. Or do they?

When hotel sales are down this puts enormous pressure on all departments to cut hours and do more with less. If it gets too bad staff will be cut or laid–off based on the lack of business. Also, the sales staff themselves may be let go if they can’t produce. Sales personnel are under constant demands to produce revenue. This revenue is not only actual but projected.  They have a tough job.

Projected revenue is used to make budgets, to plan the next marketing campaign and for the large investment of capital improvements in the coming year. This gives the sales staff power, power to chart a course for the future of the company. But many times it gives them the power to sell events with no consideration of the cost of doing business. This is where the problems start.  Now on to:

Operations

This is the backbone of any hotel. No matter what is booked, and at what price, the operational departments are responsible for making the guest’s experience as special as they hope for, and even to go above and beyond their expectations. But this comes at a cost, the highest in the business; labor.

Labor costs, or “payroll” is usually the largest of the “non-fixed” costs of a hotel. When an event is booked at a low rate it still must be serviced, and done so within the hotel standards and the same business costs, regardless of the revenue generated from that event.

For this example I will focus on the areas of the Food and Beverage Departments and how they respond to the demands of a corporate meeting event.

This department is divided into two sides; the “front-of-the-house” and the “back-of-the-house”. The Culinary Department and all their support staff are the back of the house. They usually do not have any direct interaction with the guests, hence the term back of the house. The Banquet Department consists of the wait staff, bartenders, housemen (who setup the rooms) as well as the managers, and is called the front of the house since they are in direct contact with the guest.

When a sales manager sells or ‘books” an event they are not responsible for what it takes to make the event happen. Whether it is a small event of 10 people or a large multiple day event, their primary focus is to book the event and get the information needed for the operational departments to make it happen.

But is that really their only responsibility?  Here is where I get into trouble…

What good is booking a small event when the cost of servicing the event is more than the revenue generated from it?

Yes, this small group can be the start of a long-term relationship with the customer and may lead to multiple future events as well, but what if it doesn’t?

The chef is still held accountable to the food cost and what it is as a percentage of revenue. He is tasked with keeping his labor costs down as well. But just because there may be a small event to service his quality, presentation and freshness of the food prepared must still be first-rate. Too many of these small-profit events do not allow the chef to efficiently run his department in the manner expected of him.

The banquet department then must get into the act. Setup staff as well as waiters/bartenders are next in line. Are we to think that the sales manager that booked this group realize that the waiter may be paid based on the revenue of the event? Low revenue = low pay.

Does the sales manager know that the revenue generated from the bar for ten people during dinner is not enough to cover the cost of the bartender’s hourly rate or the cost of setting up the bar?

Probably not.  So they don’t worry about it.

Then there are the situations where “sales” will discount the price of the event in order to make the sale. “If I didn’t discount the price they would have booked somewhere else” is a common phrase from the sales staff.  But “operations” can’t get a discount on the cost of food or lower the hourly rate of the staff needed to service the event. But we gave a discount to the event anyway.

When month’s end rolls around it is the chef and banquet manager that must sit in the boss’s office and justify why their costs are too high and not in line with budget. They are the ones that must explain to the customer why something was not done “as promised from the sales manager” when they may not have been provided with the information. And what if the compensation or yearly bonus for these positions is dependent upon them staying within their budget?

It is very easy for operations to downplay the value of these small groups because of the reasons already mentioned. “We’re not making any money on this group” someone may say, so their best staff is not scheduled to service it. “Just get the food out” is said in the kitchen, so the food presentation is not up to par. What is the ultimate outcome? A poor experience for the customer.  This can NEVER be acceptable!

I will not fault a customer for asking for, or receiving, a low price. But we still must treat this as one of the best customers we have in order to continue the relationships we value in the hopes of more business in the future.

This is where the battle begins…

It takes a concerted effort for “sales” to understand what it takes in order to produce the expected results, and top customer service, for the events they book. And the “operations” must realize that if no business is booked and revenue doesn’t walk in the door then positions may need to be eliminated and the business will suffer.

The challenge is for all parties involved to work as a team, understand the expectations and responsibilities of each, and find the best solutions for the health of the business. Until that happens, the battles will continue.

What “sales versus operations” stories can YOU share with me? 


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Profile photo of Steve DiGioia
As a customer service trainer, coach, author and speaker, I use my 20+ years of experience in the hospitality industry to help companies and their employees improve service, increase morale and provide the experience their customers’ desire. The best part of my job is changing the mindset of employees to become customer-first focused and developing their skills to make them the best they can be. My book “Earn More Tips On Your Very Next Shift…Even If You’re a Bad Waiter” is an easy-to-follow training method that can be used across all industries, resulting in better customer retention and repeat business for your company. It's the blueprint for teaching "WOW" customer service. I continue my original customer service, leadership and management-based writings on my blog and am a featured writer/contributor to many of the hospitality industry's leading publications such as eHotelier, Hotel F&B Observer, Hotel News Resource, Hotel-Online, Customer Think, Bizcatalyst 360, and many more.

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16 Responses to “ Why Do Sales People Always Fight With Operations?” Leave a reply ›

  • Profile photo of Sunday William Profile

    Hi Steve,
    This is pretty a common story that relates not only to the hospitality industry you belong to. In most other industries, there is always this conflict between/among functional departments – Finance vs Operation, Sales vs Production, Marketing vs Production, Purchasing vs Production, etc.

    The overall goal of the company should actually be the ultimate target of any functional department. Although conflict between departments e.g. sales vs operations cannot be completely avoided. The onus is laid on the managers to find a balance where the roles of both departments are optimally utilized so that corporate goal would be achieved.

    Managers should also find a balance to ensure that cost is minimized and revenue is maximized within the various departments.

    This departmental fights cannot be completely avoided because of individual or department goals but a good manager will ensure that the fight brings about opportunity for improved informed decision that will ultimately bring and keep customers even as the company makes profit!
    Sunday William recently posted…How Has Repurposed Content Helped In Converting Your Target Audience?My Profile

  • Profile photo of Sarah John Profile

    The reason(s) why sales and operations always fight in any organization depend on the management.

    I am putting it on management because they are responsible for providing these functional areas with job descriptions.

    If after a particular fight, management is unable to resolve the conflict then the fight will continue.

    Anything can lead to fight between departments and mostly it has to do with ‘who is better’ or ‘who gets better compensation’.

    Management should be clear about defined goals for each department and must ensure that conflicts are resolved justly whenever they crop up since they cannot be avoided completely.

    Sales and operations are both important. One cannot succeed without the other!

  • Profile photo of Celine Profile

    Hi Steve,

    There would always be conflict between various departments as long as personal interests are in place.

    There is this “ego” trip that most departments often embark upon and this is often displayed at the expense of organizational objectives.

    Sales are important and operations are important but the areas of conflict often emanate where their roles intersect.

    Why do they always fight? Its pure ego and craving for supremacy!

    • Profile photo of Steve DiGioia Profile

      I would add “resistant to change” too Celine. Without being willing to change to “what’s in the best interest of the company” allows the ego and supremacy issue to fester. Thanks for adding to the discussion.
      Steve DiGioia recently posted…Here’s How to Stop Getting Calls At Home On Your Day OffMy Profile

      • Profile photo of Celine Profile

        Yes Steve, resistance to change is another reason sales and operations will fight.

        It becomes necessary for organizations to always find a common ground to resolve any form of conflict that could fester in between departments.

        Being proactive about resolving conflicts before they fester will help avoid disastrous conflicts that could bring about bad blood in an organization!

  • Profile photo of Robert A Kearse Profile

    Steve:

    My deep appreciation for an incisive analysis that was very nuanced and not at all glib and simplistic.

    The organizational conflicts that you describe are in fact fundamental and inherent to any large corporate entity.

    As you indicated part of the conflict stems from the different forms of compensation that workers experience.

    No cure in sight for that one.

    Its up to management to minimize the damages from the inherent conflicts where the MAGNITUDE of such conflicts are dynamic.

    Good managers definitely do earn their pay.

    Thanks again for your thoughtful analysis.
    I have bookmarked it for future reference.
    Robert A Kearse recently posted…

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    • Profile photo of Steve DiGioia Profile

      Hello Robert, thanks for your comment here and on my blog.

      I have received so many “negative” comments on this article, as mentioned above, when it was previously posted. I believe they came from those that didn’t really “read” the article to understand the reasoned arguments I tried to make.

      I didn’t take a definitive stance on one side or the other, even thought I do feel strongly about “my side”, and worked to explain the motivations of both.

      Can’t please everyone, just as sales versus operations will continue for some time to come…

      Steve
      Steve DiGioia recently posted…Here’s How to Stop Getting Calls At Home On Your Day OffMy Profile

  • Profile photo of Winford Moore Profile

    Of course, departments in an organization would always clash because of conflict of interest.

    Sales and Operation are two key departments that want one thing ( to make the organization grow) but in a different way.

    It is good if there is fight but that should not make the organization lose hold of its vision for each department and the entirety of the organization!

  • Profile photo of James Ling Profile

    For me, any fight between departments is caused by how the management sets the ball rolling in the first place.

    Healthy fight is permitted because it provides room for learning.

    What should be avoided by management is that fight between sales and operation that may eventually affect the whole organization negatively!

  • Profile photo of Amit Sharan Profile

    Conflicts between sales and operations are often regular. As long as there would be a common ground to exercise their individual skill and aura of “superiority”.

    For me, I think sales should always listen to operation for good rapport and communication!

  • Profile photo of Paul Profile

    The conclusion of this post should readily be expressed. Whatever it takes for improved team work for the overall benefits of the organization must be embraced. Thus, you are right about this

    The challenge is for all parties involved to work as a team, understand the expectations and responsibilities of each, and find the best solutions for the health of the business. Until that happens, the battles will continue.

  • Profile photo of steven Profile

    Hey Steve,

    You are right about this: ”
    There is friction between those who “bring the business in vs those that make it happen”.

    Each has a distinct, and conflicting, view on how it should be done.”

    At the end, the areas of conflict must be ironed out to pacify each department and ultimately the manager.

    A strong management would not mind a conflict that is healthy for growth but if it affects the customer, then there is a deeper problem to be dealt with!

  • Profile photo of Carl Profile

    Well, the conflict between sales and operation would always be there. This is because each department would always want to prove its superiority than over the other.

    A common ground must always be sought by managers so that, at the end, what will matter would only be the satisfaction of the customer!

  • Profile photo of Black Profile

    Sales is important just as operation is important. Whenever there is an over bearing of one department over the other, conflict easily generates.

    Supremacy of functions is often the cause but it really boils down on how management views the separation of powers eventually.

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