6 steps to corporate hospitality days that work
What part should corporate hospitality have in your marketing mix?
A free day out at the rugby or an all expenses stay at a luxury hotel has become par for the course for many people in big business. They are happy to be entertained by clients and prospective customers who vie for their business.
But does the world of corporate hospitality justify its claim on the marketing budget of a growing business, or is it just an expensive excuse for a jolly?
Nick Daniels, director at 80-strong IT recruitment company, Preferred International, is in no doubt. “We've invested £21,000 over a four-year period as a member of Challenge Business' Business Club, giving us access to three networking events and three sailing days each year. I stopped counting when £250,000 worth of business had been won through contacts introduced to us at these events.”
With a bumper year of sporting events looming in 2004 – from Euro 2004 football in Portugal to the Olympics in Greece – corporate hospitality is centre stage. And it can clearly be a powerful tool in the world of business, but only if it's handled correctly.
“I recently took out eight prospective clients for a day's shooting at Holland & Holland,” explains Nick Learner, MD of PR company, The Crocodile.
“Most of our target audience are in IT. Most are men and most of them like guns. It cost about £1,000 to entertain them for the day and we've since received business from most of them, and the promise of one particularly big job is also in the pipeline. It was certainly a good investment.”
Anyone considering corporate hospitality as part of the marketing mix has to get their objectives right. While the soft benefits can be helpful – stronger relationships with key partners – the ultimate outcome has to be adding to your bottom line.
This can, however, take time with different obstacles to be negotiated along the way. Sarah Hemingway, business manager at Arla Foods explained: “We hold a number of corporate hospitality events every year with the objective of building relationships and getting to know people better. Stronger partnerships mean that, if difficult business situations arise, it's easier to deal with them. Some of our accounts have a history of difficult trading relationships but, because we've invested time in getting to know our clients, these have improved greatly.”
Choosing your event
The first question most ask is “how much will it cost us?” One school of thought says the amount you spend should depend on the potential return from the client or clients you invite. If you are working on developing £20m worth of business, spending £20,000 on an event which makes that company feel special is worth the outlay.
But according to catering and support service company, Sodexho you don't have to go overboard to impress. Their research found an average spend per person of £350 to £650 per event when they asked companies about their budgets.
“Responses varied, depending on company size, and some anecdotal evidence suggests that some companies will spend as little as £70 per head – on a posh dinner, for example,” says Alastair Scott, Sodexho's sales and marketing director.
Overflowing coffers are therefore not the most important factor. The key, says Mike Marshall, who runs Mike Marshall Events, is in the event you choose.
“It's what you do that counts. It doesn't necessarily impress people any more to be invited to the Monaco Grand Prix than an event in the UK.”
So if you ensure that your events are within easy reach of your guest's home or office you will get more people to attend.
Tailoring your event to your client is another factor, which is as important as the budget. Successful events begin with setting objectives, identifying the right people to entertain and finding out what they will respond to.
Just because you, as MD, are a big West Ham fan, doesn't mean your clients will want to give up their precious leisure time to go and watch them play a game. Instead, organise a box at The Oval or a day at the races and you might well find you have them eating out of your hand.
“Lots of our larger clients analyse their client base and ask questions to build up a profile of what they are interested in,” says Ivor Mason, MD of corporate hospitality specialists, Eventmasters. “That way they know that the clients will say yes before they ask.”
Nick Daniels also adds that it's important that the hosts have a genuine interest in the entertainment. He says his firm “wasted” money on corporate hospitality in football because employees weren't interested. “You have to pass on your passion on to your customers. We are all into sailing and it's really paid off.”
Not just a question of sport
While sporting events are the obvious choice for entertaining, other events, such as a night at the opera or a visit to the Chelsea Flower Show, now allow creatively minded companies to entertain a broader set of clients. But most professionals agree that sport still maintains the edge.
Whichever way you go you have to make sure that you pick something which will allow you to achieve your aim of spending time with your clients, so the event has to be just right. Make the wrong choise and you could be wasting your money, says Mason.
“If you invite 10 people to the British Open golf you might have two hosts and eight guests. But if two guests want to follow Tiger Woods, two want to stop in the marquee and two want to stay on the ninth tee, you can spend a lot of money on a day that allows little opportunity to spend time with the right people.” An event where all guests stay in one place – such as a day at Lords – is much more effective.
“You're with your guests all day, there's not a lot going on and it's not as intense as golf or tennis for example, so you can talk without being hushed,” he advises.
Alternatively, a participative event can offer even more opportunity for getting to know people in the right environment. Simon Walker runs Challenge Business, a company that organises corporate sailing days on racing yachts. He says active events allow the opportunity to really get to know each other and click.
“People are totally involved, pulling the sails up, winching, working together. People get to know each other in a natural environment and have conversations with guests as they move about the boat. From the host's perspective, you have a captive audience.”
Getting it right begins long before the event itself. How far in advance to start your arrangements depends on the nature and size of the event itself, your guest list and your budget, not to mention whether you are going to organise it in-house or use a specialist firm.
First you must decide whether to run one big annual bash or a series of smaller events to cater for different tastes and build momentum. Smaller companies might focus on one annual event, supported by more manageable activities on an individual basis throughout the year. This is the approach adopted by Bob Dearsley chairman of public relations firm ITPR.
“We hold an annual corporate hospitality event at the varsity rugby match at Twickenham,” said Dearsley. “It costs approximately £150 per head including tickets, meals and drinks, and it has proved a successful way of building relationships with clients and giving them an opportunity to network.”
Nick Daniels believes three Business Club events and three sailing days every year offers the right number of opportunities to forge relationships and build momentum, while Mike Marshall claims, though a number of different events are often preferable, there's no hard and fast rule.
“One year a business might put all its budget into one special event, like a client of ours is doing at Euro 2004 next year. It depends on the business and its aims,” says Marshall.
Jo Sherring, of Peter Parfitt Leisure, claims some of her clients sat down in September to plan their spend for 2004, while others will book one month before. But her advice is not to book less than six weeks in advance if you want to get your first choice of events.
“Of course it's a supply and demand issue. For example, because of the Rugby World Cup fever, we could probably sell packages for Twickenham ten times over – England vs Ireland in March is already sold out,” says Sherring.
Ivor Mason reinforces this message. “People need to get dates in the diary at least three months in advance. Executives are very busy people. If you don't book them, someone else will.”
While DIY corporate hospitality can be fine for some events, such as Ascot, getting the professionals in takes more planning. But tread carefully and, if it's a ticketed event, don't take chances.
“Look for the word official,” says Mason. “This means the company is appointed by the venue and you won't find yourself in a field outside. We get our tickets from the venue so you know they are bona fide.” He adds there's also a pecking order at work, and firms that have been officially appointed – and therefore their customers – benefit from the best seats.
Ask to talk to existing clients and get a feel for the firm's work. Alastair Scott also advises businesses to choose a firm that has an affiliation to a trade body. “Most of the organisations have some sort of validation procedure, such as the Corporate Events Association (CEA) – they don't let just anyone in.”
Getting the guests
Once an event is booked you still need to ensure that people commit what's often their precious leisure time. If you don't get the full commitment of your guests it could backfire, from both a financial and from a status point of view if you are forced to entertain guests in a half empty room.
The invite needs to be relevant, for example face-to-face with your contacts if you have a personal relationship, or an eye catching invite that shows imagination and commitment on your part.
Marshall, also advises companies to follow up any acceptances in writing to show the client that the event has been booked and that it's a formal agreement.” Another way to ensure attendance is to have a ‘with partners' event – the chance of getting a key decision maker is far greater if you take this approach. Once the partner is committed they rarely change their mind.”
On the day
But getting your guests to the event is just the start of it. Ensuring that you achieve your objectives is down to a number of common principles, regardless of the nature of the hospitality.
Don't think you can relax once the day arrives. “An event has to be run with military precision and research is invaluable. For example, when we take clients to dinner followed by a show, I will walk from the restaurant to the theatre beforehand to see how long it takes, and I will visit the theatre to see where our seats are so there's no confusion when we arrive. Even if an event management company runs it for you, you still need to take responsibility,” cautions Sarah Hemingway.
Another golden rule is ensuring you have enough hosts to make guests feel relaxed and valued. Mason advises businesses to work on a ratio of one host to every three or four people to achieve this and maximise networking opportunities. Make sure employees attending the event are good at hosting and, if necessary, hold a brief beforehand.
And of course, don't forget that you are at work, however much you might be enjoying yourself. “Don't get more drunk than your guests,” advises Jo Sherring. “It would spoil all the hard work. Even though the idea is that everyone is relaxed and has a good time, there's a certain amount of etiquette needed.”
Finally, follow up your event with a letter or a phone call and, if you have forged new business leads, keep them hot.
A ‘thank you' for attending won't go unnoticed, nor will a memento of the event, such as a photograph of the day. As Nick Learner says: “It's more about the hospitality than the corporate.”
THE COST OF?
?Taking 10 guests to Puccini?s La Boheme opera at the Royal Albert Hall in February, including box, drinks, supper, programme, performance and event management ? ?2,290 plus VAT (with Peter Parfitt Leisure).
?A day at the National Hunt Festival in Cheltenham in March for 30 guests, including course admission, car parking, morning coffee, four course lunch with wine, afternoon tea, and complimentary bar ? from ?7,170 (with Peter Parfitt Leisure).
?Trip on the London Eye for 24 people (ie one capsule) followed by three course lunch at County Hall ? ?4,320 plus VAT (with Team Tactics).
?Tickets for 15 people to watch England vs Wales rugby at Twickenham in March, including match ticket, complimentary bar, four course lunch in marquee, post match refreshments and celebrity guest speaker ? ?7,875 plus VAT (with Team Tactics).
?Taking six people to see Barcelona vs Real Madrid over a traditional Spanish fiesta weekend, including flights, three nights in a five star hotel and match ticket ? ?5,970 (with Keith Prowse).
?A series of 10 wine tasting evenings at the Hotel du Vin in Winchester for 12 people, including dinner, wine, wine tasting and instruction ? approx. ?10,000 (depending on wines).
?Chartering a yacht for 12 people for a day in the Solent, including instruction, professional skipper and breakfast, lunch on-board and afternoon tea ? from ?2,100 (with Challenge Business).
?A trip for five ?ladies? to Ragdale Hall, Leicestershire for a day?s pampering and beauty treatments ? from ?750 plus VAT (with Mike Marshall Events).
?A two day trip to Nice for six people to see the Tennis Masters Series in Monte Carlo, including return flights, transport, one night?s accommodation, top seats and lunch ? from ?5,700 (with Peter Parfitt Leisure).
?Three night package to the Olympics in Athens in August for 20 people, including flights, transfer to events, tickets for two events and accommodation ? from ?60,000 (with Peter Parfitt Leisure).
Traditionally it?s the men who?ve had a monopoly on corporate entertainment. However, the growing number of women involved in business has shifted corporate hospitality trends to accommodate their tastes. Mike Marshall Events, organises ?ladies only? initiatives. For the second year running, Arla?s Sarah Hemingway recently worked with Mike Marshall to organise a ?top and toe? day for 12 female clients at Ragdale Hall health spa.
Guests were transported to the venue and enjoyed two nights accommodation, meals and health treatments to the tune of ?6,000. ?It was relatively inexpensive. It gave us a chance to talk about anything but work and get to know each other in a more relaxed environment,? says Hemingway. ?The return is immeasurable if it?s done properly.?
Arla has also held day trips to Paris for female clients, where guests travel on Eurostar and enjoy sightseeing, lunch and shopping before returning home.
?People are so busy it?s difficult to really get to know each other in a work environment. The whole idea was to come up with something attractive to people, that would encourage them to create some precious time with you,? she adds.
Corporate hospitality at work
One MD, who is living proof of the maxim that it?s more about the hospitality than the corporate, is Mark Ormerod, of mobile phone accessories distributor Dextra Solutions.
The company booked three Challenge Business boats to take part in Cowes Sailing Week this year and, due to the event?s success, has booked four for next year. Each boat was sponsored by one of its customers. ?Because telecoms is such a competitive business, sailing was perfect, offering competition as well as camaraderie. It had to be something really different to attract people who are being invited to events all the time.?
With managing directors having to take their turn on bacon butty duty in the galley, the same as every other crew member, sailing is a great leveller. But surely there?s also an element of risk. Couldn?t two nights and two days together in close proximity prove a recipe for disaster?
?Yes, things could have gone wrong,? conceded Ormerod. ?But at least when sailing, people are busy all the time and are all focused on the same goal. It?s also so well organised that the racing skippers who are provided for the trip are able to create the right atmosphere.?
P>DEALING WITH AN EVENTS AGENCY
?Find out if they are an official supplier of the event you have in mind.
?Ask if they are affiliated to the relevant trade body.
?Ask for references from happy customers.
?Find out how much money they require up front.
?Find out what their level of involvement is ? will they do everything from sending out invites to following up if necessary?
?Meet the people who will be dealing with your customers before you commit.