To some, events such as a trip to Ascot, a test match or rugby international provide the perfect opportunity to network with key contacts and, ideally, generate new business. To others, however, they are little more than an unproductive way to drain your profits. But corporate hospitality can be a useful tool for growing businesses. Keeping your existing clients happy is a lot more cost-effective than trying to find new ones. So, if you’re going to spend a fortune on entertaining clients, how can you make it pay?
This time it’s personal
Tailoring the event to your audience is a must. Tim Draper, MD of City PR firm Financial Village leaves little doubt as to his views on the matter: ‘The more personalised the hospitality, the better.’ Researching your audience beforehand should help predict what will attract them to attend in the first place and ensure they have an enjoyable experience.
‘Events like driving days seem to be most effective as there’s no alcohol involved and people chat with a clear head,’ he adds. ‘The problem with, say, a corporate box at a football match is that people often get blind drunk and forget who’s taken them in the first place. You’re not likely to get future business from that.’
Simon Kearsley, managing director of finance software developer Symmetry, has sat on both sides of the fence – as a guest and a host – and he largely agrees with Draper’s summation. ‘I’ve been invited along to plenty of things as a guest and the ones you tend to remember are the events that force you to get really involved,’ Kearsley recalls.
Getting your money’s worth
Kearsley’s experiences affect the way in which he now utilises Symmetry’s hospitality budget. ‘We looked at the traditional stuff like rugby tickets or a trip to the Cheltenham Gold Cup, but decided that’s a bit tired – you don’t get much for your money anyway. Instead, we sponsor a boat on the Global Challenge yacht race and get to take 12 guests out sailing twice a year. It’s a great way of getting very close to business partners and clients.’
To Ric Yerbury, chief executive of Elevation Events, Kearsley’s comments hint at the real secret to using hospitality effectively.
Elevation operates at the highest end of the market, offering ‘elite access,’ to prestige events like the Ryder Cup and F1 race weekends. Its clients are a mix of large corporates and investment banks. Yet, Yerbury maintains that to have a positive impact, ‘you have to realise it’s about spending time in an informal setting with key decision-makers. This means making it special for them, as it has to be something they are willing to take time out of their schedules to attend.’
Making it count
It makes sense to invite a mix of happy existing clients and prospective customers to hospitality events, so the former’s satisfaction with your company influences the opinion of the latter. Though you’re unlikely to sign a key contract while cheering on the runners in the Champion Hurdle, you may just forge the necessary contacts to secure a major deal several weeks or months down the line.
In terms of measuring the effectiveness, one option is to keep a database of the cost of each event and the subsequent increase in business, though it can be difficult to ascertain whether any increase was down to the event. A more useful alternative is to compare the cost per client of all the hospitality events they have attended and correlate this to the business from that client. This should then help you more effectively plan future events and whom to invite.