By Tina Benson, an Overdrive contributor and founder of Team Tactics
Hospitality within business can bring recognition, additional business and important contacts to those companies which recognise the importance of providing enjoyable, memorable experiences for their clients. But why should it be so important and how can you facilitate corporate hospitality if your business isn’t large enough yet to have hospitality staff of its own?
The first thing to consider is that 21st century corporate hospitality isn’t the modern version of schmoozing clients in pursuit of increased sales… that model is so last century. By contrast, contemporary corporate hospitality demonstrates far more in terms of intangible benefits:
Taking the time
Using a hospitality company to lay on an event for yourself and your clients facilitates vital time together in a relaxed and enjoyable way. It’s a chance to really get to know each other without the more formal distractions of boardroom agendas and time-pressed schedules.
Loyalty and links
As human beings we tend to feel loyal towards those we know value us… and it’s exactly the same in business. An invitation to an exclusive event, laid on by specialists is an ideal way to demonstrate to a client that you really value the opportunity to work with them, and one which is likely to be reciprocated with loyalty in business dealings.
Although networking is a vital part of business, it can be extremely hard to find the time necessary to devote to this. Holding a corporate event for existing, undecided and potential clients is an ideal opportunity to network in a way which makes your company memorable for the right reasons, not just to those you’re entertaining, but through referrals and recommendations too.
The entertainment is laid on, those existing clients who already know that you’re great to work with are all relaxed and enjoying themselves, the buzz is positive… so when would be a better time to launch your latest product or service than as part of a hospitality event? Rather than having your sales and marketing team visit all of your clients separately it can be far more cost-effective, fun and memorable to get everyone together to generate excitement and enthusiasm by launching something new as part of the day’s entertainment.
The fiscal fringe benefits
Moving on to money, it is of course quite difficult to actually calculate how much fiscal benefit corporate hospitality can create. There are many variables, including:
- The industry or sectors you are in and those that you might be trying to break into.
- How much of your budget you can allocate to hospitality in the first place.
- The costs and actual value for money offered by any corporate hospitality company you use to deliver your corporate entertainment. This is particularly important for businesses without in-house hospitality staff – you’ll really want to ensure a return for your money by using only a reputable company, with testimonials and a proven track record in delivering those memorable experiences which will, in turn, make your company memorable to those clients.
As such, it’s difficult to assign an equation to the concept or to quantify the return. However, knowing to expect a return of investment into corporate hospitality is a starting point which many companies tend to forget; you’re not creating an event out of kindness, it’s all part of that business plan and if you’re spending some of your profits by buying in the services of outside hospitality firms, you should be expecting at least a percentage return. This may take many forms though, including gaining the interest of fairly new or undecided clients, or retaining those existing customers who appreciate the hospitality as the relationship building stepping stone it is – to stay the course with you.
For growing businesses, the thought of parting with your profit without even a whiff of potential return can be daunting, but entertaining, thanking and raising your profile with existing clients through corporate hospitality can work out far less expensive than new campaigns to gain a whole raft of new clients or customers from scratch. Moreover, who wants to return to those early days of scratching around for new clients and offering profit-reducing initial discounts, when you can build on the solid foundations of your existing clients? It’s generally recognised in business that it can cost anything between 4 and 10 times more to gain a new customer than to keep one, so it makes plenty of financial sense to look after those existing customers. Marketing budgets seem readily allocated to attracting new customers, yet the cost of the customer-care benefits offered from corporate hospitality companies might be just a small percentage of the costs of marketing for new ones.
So, if you have a hospitality budget but don’t want to invest it in hospitality staff, then the services of the right hospitality company can be the way to make it pay dividends… in all of those intangible and fiscal ways which can really help your business make its mark.
Tina Benson is the founder of Team Tactics, a London and Kent based corporate hospitality service in operation since 1996.