When You Have Lemons...

How do you handle an unpleasant and difficult situation? How can you turn it around and convert it into a positive one? I was faced with just that scenario recently.

I’m sitting at a breakfast meeting, across the table from the sales manager of a major hotel telling him my organization has just decided to drop it’s multi-year, multi-thousand dollar contract with him. And this right after he has made their best deal ever and offered some serious additional incentives. He is clearly pissed. He says there is nothing left to talk about and stands up to leave.

What would you do? Can you imagine turning this around, so that not only does he leave happy, but a couple of short months later he contacts you to offer YOU business? Read on if you want to see how this happened.

Here's the background and story:

I'm on the board of directors of the Toronto Summer Music Festival, and am also the chair of the corporate fundraising committee. In that role, my job is to oversee all corporate sponsorship of the festival (banks, etc), but also the in-kind donations such as hotel sponsorships. So every year one of my jobs is to meet with some of the big Toronto hotels and negotiate deals.

Toronto Summer Music is now celebrating it's fifth season. Virtually since our inception, we've been dealing with two of the top hotels in Toronto (we'll call them Hotel One and Hotel Two here) for hosting our visiting artists and faculty for the concurrent academy. Why two hotels? Well, one of them is very close to our main performance venue and the academy (five minute walk), but it is a little pricier than the second (five minute cab ride). So for budgetary reasons we've had to make deals with both and split our room nights between them. Both are excellent, first rate hotels, with great reputations both locally and internationally, and we've had nothing but positive feedback from our artists and faculty for both. However, the fact remains that Hotel One is more expensive than Hotel Two, slightly more exclusive, and closer to us as well.

Over the years I've gotten to know the sales managers at both hotels. I’ve even become friendly, in particular, Hotel Two’s sales manager. For example, in the course of conversation at a meeting some time ago I found out that the sales manager for Hotel Two was something of an amateur singer and liked jazz, so I mentioned to him that I had a jazz trio that played club dates occasionally, and offered to add him to my email list.

Fast forward to last year, when we were doing our hotel meetings to discuss deals for the 2010 season. Sitting down in our meeting with sales manager of Hotel Two, he pitches us a deal: He says Hotel Two would like to be our exclusive hotel sponsor this year. He realizes they are further away and therefore not as convenient, but he's willing to offer us an incredibly low room rate, plus he'll throw in limo rides to and from his hotel to the festival venue via a deal with Hotel Two's livery service. He also has good ideas about how to market the festival to hotel guests (displays in the hotel's restaurants, etc) and is willing to broker a meeting with Hotel Two's livery service for us to discuss an airport transfer deal for our artists. In short, he's bending over backwards to be helpful. This deal is sounding very good, and the administrative director and I are seriously considering accepting.

Next, we meet with Hotel One. They give us their discounted rate for 2010 (not nearly as good as rate from Hotel Two). We then tell them that Hotel Two has offered us this unbelievably low rate in exchange for being our exclusive sponsor this year. We are convinced that we're done with Hotel One as a sponsor, because we believe there's no way they'll be able to match Hotel Two's rate. Leave it with us, they say, and we'll see what we can do.

A couple of weeks later we get a response: they've agreed to match Hotel Two's room rate, but for that THEY want to be our exclusive sponsor. Well, this worked out better than we could have ever hoped. We now have a super low room rate from the closer, more exclusive hotel, and we have the added benefit of being able to put all our artists and faculty in one hotel, which simplifies things hugely from a logistical point of view. We take this to the board of directors, and they vote unanimously. It's a no-brainer.

BUT, we're faced with the problem of going back to Hotel Two's super nice, friendly, and helpful sales manager and delivering the grim news. This is not going to be easy. And guess who's job it is? You guessed it: chair of corporate fundraising. I have to break up with him.

So, reluctantly, I send him an email requesting a meeting to discuss sponsorship details (sounding as vague as possible so as not to arouse suspicion). He suggests a breakfast meeting at Hotel Two's restaurant. I show up there, and shortly after, he arrives. We shake hands and he asks if I'd like to order anything. I'm very aware that I have bad news to deliver and that he may not want to stick around long after he hears it, but I also don't want to tip my hand too early, so to be polite I ask if he's having anything. He says he's
going to have the fruit plate. So I order one as well to be sociable.

Now that the order's been placed, he turns to me and asks what this meeting is about. I tell him I'm not going to beat around the bush, and recount the whole story of what happened at our meeting with Hotel One, how we never expected them to be able to come down that low, and that while we are extremely grateful for all that he has done for us, the board has voted to go with Hotel One as the exclusive sponsor, primarily because it is closer and more convenient. I apologize profusely and continually, and as I'm talking I'm looking at his face and can tell he is not a happy camper. When he finally breaks the uncomfortable silence it is to say "Well, serves me right for going into a meeting without knowing the agenda". There's a long and awkward pause as we look at each other across the table, which is broken ironically by the server delivering the two fruit plates. He then says "You're welcome to stay and enjoy the fruit plate but if you
don't mind I'm going to excuse myself and go back up to my office as we have nothing left to talk about."

So here is the turning point. Many would say "I understand", and just let it end there, but for some reason I feel for me this is not an option. Thinking fast I tell him that I only ordered the fruit plate to be sociable and if he's leaving without eating his I will leave too. But, I say, why can't we stay and have breakfast together? "What is there to talk about?" he says. I tell him we have a lot to talk about. "We could talk about our travels: you just got back from the Winter Olympics, I just got back from South East Asia. We could talk about what's new in our lives, or we could talk about music." I must have disarmed him, because he agrees to stay and be sociable. At first it's a little stiff (understandably), but by the end of the breakfast meeting he's smiling and we're both relaxed and friendly. After a respectable amount of time we shake hands and say our goodbyes. I follow up a few weeks later with a note on official letterhead thanking him and the hotel for all the great work they have done for us and apologizing once more for having our relationship end this way.

And that’s the end. Or is it?

To my great surprise, a couple of short months later I get an email from this very same Hotel Two sales manager, asking if my jazz trio is available to play at a function they are hosting for their top corporate clients! So: I drop him as a business client after a multi-year relationship, and he turns around and offers me work. How does this happen? How do you take a situation where you've canceled a man's business after he's bent over backwards to help you, and where he should rightfully be pissed off, and turn it around so that after a few short weeks not only is he not mad at you anymore but he's offering YOU business opportunities? I'm not entirely sure myself -- it seems almost magical to me. But I like it.