What exactly springs to mind when considering corporate hospitality – fancy a pint? Probably not. However, does simply treating your clients to lunchtime drinks fall under the hospitality umbrella? It may be that the only idea many companies have of corporate hospitality is taking 10 of their most respected clients to dinner or booking a hospitality box at a major sporting event. But there’s more to hospitality than plying clients, prospects and journalists with wine and canapes, convincing them of your new business strategies whilst at the same time slowly but surely inebriating them.
So what exactly is corporate hospitality, where has it been and where is it going? According to Sarah Webster, communications director at industry trade body Eventia, hospitality is, ìthe form of face-to-face marketing that assists in enhancing the relationship between an organisation and its current and potential customers through interaction in a non-sales environment.î Hospitality has also been described as ‘free entertainment offered by a company to customers or trading partners… as a way of winning their favour’ (Encarta definition). Hospitality is therefore used to ‘enhance’ already existing relationships as well as win the ‘favour’ of those being treated, whether they are existing or prospective clients, suppliers or the media.
This ‘free entertainment’, it seems, can be anything from treating 10 clients to dinner at a local tandoori, to hosting a champagne reception for 300 prospects; from entertaining 200 clients in a hospitality box at Aintree to arranging a celebrity autograph for a client’s son.
However, corporate hospitality isn’t just a sideline about occasionally promoting your business, your brand, your place in the market; it’s now seen by some as an essential part of a B2B marketing spend, and is sometimes even allocated a separate budget entirely.
Hospitality history
Corporate hospitality has changed vastly over the last 10 to 15 years. Historically, it was typically used to treat clients, giving them VIP status for a day or more, and was traditionally held at spectator sports events such as the Grand National at Aintree race course, international rugby games at Twickenham, the Henley Regatta and the Wimbledon tennis championships. Hospitality budget 10 years ago were often not measured, and were the first thing to be cut when times grew tough for a company.
However, it has evolved since then to meet the needs of a changing market and has become more deliverable in terms of return on interest (ROI). Companies started to apply standard business disciplines to their hospitality packages, have begun to identify what was most likely to appeal to the changing sample of clients and understand how this could be strategically used as part of a marketing plan.
Corporate hospitality has changed greatly since its heyday in the 1980s. Heather Westgate, managing director of marcoms agency TDA, comments: “Nowadays it’s hard to justify spending the money without seeing any specific return – things have changed massively since hospitality was just seen as a ‘jolly’.” In this respect, the strategy and sense of using a targeted audience is more than obvious.
Andrew Cook, sales director of events company Unmissable, sees this change of market in the context of the influx of women into senior business decision making rules: “Twelve years ago Kathleen O’Donovan at BTR was one of the only female finance directors. Now, 20 per cent of FTSE companies are female …corporate hospitality has had to adapt to the change in the target market.” This change has involved moving away from more typically male-dominated spectator sports and has grown to incorporate many different branches of the hospitality tree.
Webster of Eventia sees that hospitality hasn’t necessarily changed as such, but has simply ìbroadened out in relation to the target markets that are also broadening.î This, she says, could mean that she is invited, for example, for a spa day at The Sanctuary, rather than being invited to Henley Regatta – an event that, with research, a company would realise she wouldn’t like to attend.
The use of hospitality
Hospitality is often utilised as a marketing tool, used by companies to deliver messages to clients, prospects and journalists in informal settings. It can prove an ideal vehicle for strengthening existing relationships, forging new ones or simply as a way of rewarding those clients who continually supply your business with their trade.
After all, a business would not be anything without its clients, and the ‘you scratch my back, I’ll scratch yours’ deal is definitely pertinent. Westgate, at TDA, explains: “The objective of corporate hospitality is generally to build and cement relationships, so while it will be a social occasion, you do need to plan ahead and take a strategic approach to make sure that both you and your guests benefit.”
In the current economic climate the focus for hospitality is increasingly on generating quantifiable returns from the investment. Cook at Unmissable, concurs: “Some may view corporate hospitality as a freebie and a big party, but in this economic climate more companies want to see ROI on their hospitality spend by ensuring that their key messages are delivered, they achieve standout from their competitors and gain greater credibility from their clients and staff.”
However, an event that benefits client, prospect and business doesn’t have to involve blatant marketing techniques, or ‘corporate bribery’ as hospitality has sometimes been called. Andrew Colwell, marketing director of LBM, comments: “Corporate hospitality is definitely part of the strategy from a client-services perspective. It’s not something necessarily used to win new business, it’s a separate entity to develop relationships with existing clients. It’s not necessarily an acquisition tool, but an integrated approach.”
It seems that CH is just as much a way of reinforcing client relations as serving up your company on a plate to prospects. He adds: “We don’t use corporate hospitality to win new business, we use it as part of a program to develop existing relationships – so a great percentage of those attending corporate hospitality events are existing clients.”
Corporate hospitality is making headway away from its previous champagne and caviar neverending budget days, towards becoming a well-used tool in the marketing industry’s belt.
Getting it right
So how do you use corporate hospitality successfully? The following tips should prove useful.
1. Understand your objectives
Before selecting an event, or even deciding who to invite, the objectives should be determined, understood and kept in mind throughout. Deciding what you’d like to achieve is paramount. Objectives may include: an increase in sales or motivation, increasing brand awareness, securing new custom or encouraging prospects, encouraging existing customers, or simply saying thank you to loyal customers.
2. Understand and research your audience
Researching the audience (and consequently selecting the function) is vitally important for maximising any kind of return on the organised event. According to Webster of Eventia, “doing your homework” is the main constituent of gaining anything from the organised hospitality.
3. Choose the right event
An effective hospitality event is one that sticks in the minds of those who attend. Consequently, the heat is on when it comes to sourcing the right place for the right people. Getting it wrong could have drastic consequences for your figures and your reputation; not only dissuading prospects from having anything to do with you, but even discouraging existing clients from continuing an active relationship.
4. Money matters
Hospitality has come a long way – from being the first thing to be cut out of a company budget, to being allocated its own budget entirely, as previously mentioned. However, a large budget isn’t necessarily the main constituent of successful hospitality. The effect and impact an event has on a guest is far more important than how much money has been thrown at it – a big impact doesn’t necessarily mean big bucks.
5. Spreading the word
Decide what technique you will utilise to invite your selected audience, whether it’s by email, newsletters, word-of-mouth or by posting traditional printed invitations. The way you invite a guest should also be appropriate to the relationship you have with them. For example, if a guest is someone you speak to every week, it may be more appropriate to mention the event during a conversation, rather than simply sending a formal invitation through by mail. The invitation should be seen as the start of the event, so it’s good to make sure the event seems exciting right from the outset. Remember that plenty of notice needs to be given to your audience.
6. Timing is everything
The timing of a hospitality event can prove essential. For instance, holding your event on the same day as several other big industry events is not a great idea. Not only will the chances of your guests actually attending decrease, entering into hospitality ‘wars’ with your competitors could end in the event not being as successful as was first hoped.
It is also wise to consider the general time of year you are to be holding the hospitality. Westgate at TDA, holds hospitality all year round: “There are so many parties going on in December that we often organise Christmas events between February and May, when there’s nothing else going on.” Choosing an appropriate time to hold the hospitality can contribute greatly to maximising ROI on the event.
7. Following up
If corporate hospitality is to be used as a specific strategy, it should be followed-up in some way. This could involve gathering feedback from the audience who attended, either informally or by using something as formal as a questionnaire. However, the appropriateness of the technique needs to be considered in relation to how formal or informal the hospitality has been organised throughout.
8. Frequency
Likewise, an event should not just be an annual occasion that proves to be the only contact you have with a client, and hence the only chance of receiving feedback. Westgate, of TDA comments: ìrunning good, regular, transparent reviews with clients is an excellent way to gain feedback, almost on a daily basis – you shouldn’t be reliant on a specific event to make sure your clients are happy.î Hospitality, therefore, can be utilised as more of an ongoing review process, rather than a one-off event that needs to be formally measured.
