That’s entertainment

Corporate hospitality is about getting to know the people you work with or for. Face-to-face meetings mean the development of a different relationship than one conducted entirely on the telephone; wheels are oiled and communication increases.

Hospitality is also recognised as a useful motivational tool for suppliers, clients and employees alike.

Although few experienced buyers would question the value of well-targeted corporate entertainment, the industry’s image has suffered various setbacks in recent years.

When budgets began to fall during the recession, and redundancies hit most firms, the image of champagne-swigging executives at lavish events was not well received by employees, shareholders or the general public.

The perception of corporate hospitality at sporting events has been tarnished by the excesses of the heady Eighties, when entertainment was largely taken for granted and boxes were conspicuously empty after lunch or at half time.

Not only were sporting enthusiasts angered by what they saw as the waste of much sought-after places at prestigious events, but companies were not getting a good return on their investment. Large groups of guests and liberal supplies of food and drink were leading to a lack of focus on the host organisation.

Thirdly, the preponderance of “cowboy” agencies offering black market tickets, inflated prices and disappointing products has stopped many buyers in their tracks.

However, the recession has had some positive effects. Notably for the entertainment industry, the marketing focus in many commercial organisations has shifted from hard selling to building relationships with clients, suppliers and staff and maintaining customer loyalty.

So corporate hospitality has not fallen by the wayside. Rather, buyers are treating it in a different way – more as a serious business tool, providing value for money. The forum of entertainment is now being used to achieve quantifiable benefits. It is a more sophisticated industry.

Ros Gunston, director of Langston Scott, the corporate hospitality broker, stresses that the market is buoyant. “We are finding that corporate hospitality increasingly has its own cost centre within larger organisations, which will be headed by an experienced buyer responsible for organising events. Until re-cently, the entertainment budget was creamed off PR, marketing or ad budgets – now it is recognised as a separate discipline.”

Jerry Starling, managing director of Kit Peters Extraordinary Events, has witnessed the changing market. “More and more money is being pumped into relationship-building activities, and corporate entertainment has established itself as

one of the key marketing tools of the Nineties. A much more serious attitude to events is prevalent. Clients have recognised the value of gathering key people in one place and there is a large growth in accountable, highly-tailored business events.”

The traditional face of corporate hospitality, at prestigious sporting events, is by no means on the wane. The UK has a vast range of sporting occasions, more so than any other European country – the British Grand Prix, Royal Ascot, Henley Regatta, Wimbledon and The Grand National are some of the more high profile. But buyers are now approaching such events in a more targeted way.

It is now perceived that a number of small groups spread across the year is better for business than hosting one big occasion. Entertaining is more successful if done on a one-to-one basis. Taking the time to become better acquainted epitomises the value of corporate hospitality.

Payne & Gunter marketing manager Roger de Pilkyngton agrees. “If the ratio of client to host is too high, businesses might as well simply send their guests the tickets and tell them to have a good day. Buyers are now being careful to choose events where they will be in a position to spend time with their guests, and are taking smaller, containable groups.”

Cavendish Hospitality managing director Jim Bignal adds: “The average size of group that we deal with has dropped from about 20 to seven. This indicates more considered buying patterns. Hosting organisations are also more careful to take guests to an event which will interest them – it is no longer a question of the chairman’s choice of sport or location.”

At the peak of the profligate Thatcher years, events such as Henley Regatta were overburdened with corporate entertaining. The infrastructure was overloaded, standards were not guaranteed and there were just too many people. “Now that attendance has dropped, the event has regained its ‘exclusive’ status,” says de Pilkyngton. “Guests can be made to feel special again, providing another aid to effective communication.”

A recently-published survey by Sponsorship Research International provides the most up-to-date information on the perceived value of corporate hospitality from the point of view of the invited guests.

Senior managers who had attended an event as the guest of another company were asked for their experiences of hospitality, their preferences and the degree to which hospitality was admitted to affect loyalty and brand preference. The research was conducted in March 1994.

Notable findings from the UK sector were that nine out of ten respondents regarded the practice as generally worthwhile; and 74 per cent saw it as a way of “building a relationship with a company I haven’t dealt with much before”. The elements of a corporate event most important to respondents were the other guests, the quality of both the seating and the accommodation, and efficient organisation. Although most would not confess to being directly influenced by corporate hospitality when deciding future contracts, loyalty to companies who had entertained in the past was evident from the survey.

Respondents were asked if they preferred existing or specially-created events, or whether they enjoyed themselves equally at either. Overall, 65 per cent of respondents claimed they would enjoy both – for those who preferred specially tailored events, it was often due to a desire to participate, or because the event was seen as unique.

Innovation in the entertainment industry is increasing all the time. This is not because demand for traditional events is dropping, but in any industry, there are a finite number of senior decision-makers. These people may well have been wined, dined and entertained into a state of hospitality fatigue, and it is down to the host to provide something different.

“The game is on to organise the best event and invite key people before your competitors do,” says Gunston.

The Business Entertainment Directory – which will become Hollis Business Entertainment when the second edition is published in October – is the bible for corporate buyers. It lists an enormous range of choices, from clay pigeon shooting to sailing; rally car racing to ice karting.

Tailored unusual events are also on the increase – treasure hunts, themed days in country house hotels, ballroom dancing or team-building competitions such as mock game shows and video productions.

Although demand for creativity is enormous, the type of activity must be matched with the expectations and requirements of the guests. “If you have a specific message to communicate, keeping away from the big traditional events can be more effective. But there are always executives who will not appreciate participative events,” advises de Pilkyngton.

The benefits of corporate hospitality may be increased if buyers invite their guests’ partners. Not only does this gesture recognise the role that spouses play in supporting their partners through the hassle of commercial life, but it is also likely to boost attendance at events.

Starling advises buyers to treat each event as a serious marketing proposition. “We ask our clients to set out their objectives for the event – is it motivational, a reward, or an attempt to create new business? Then something can be designed specifically to meet those objectives, just as for a PR or advertising campaign. We can measure the results against the original brief to justify all expenditure.”

He maintains that demand for this structured approach is increasing. “The number of companies who ask for measurable results is rising. The recession has meant that events have to be accountable.”

Methods of quantifying results differ according to the type of event. “We can simply evaluate events, which is a softer method. This involves satisfaction surveys and general questionnaires. Measuring the success of an event involves commitment from the beginning. Buyers have to think hard about why they are hosting the event and what they hope to change as a result of it. It is then possible to match objectives with results in a scientific way.” Techniques include pre and post-event interviews, questionnaires, telephone surveys and analysis of new business.

A good example of a quantifiable event is one organised by Elegant Days. Marketing manager Richard Hoare explains: “The client was a computer software company, and the objective of the day was to entertain the ‘on-sellers’, those who recommend the product. The company also wanted to introduce a new product and make sure these key people understood its benefits. We tailor-made a treasure hunt, conducted in vintage Rolls Royces and all the clues were based around this product.

“This was a combination of communication, learning and enjoyment, and guests could be tested afterwards for their information retention.”

“If I was a finance director allocating budgets,” concludes Starling, “four per cent on the bottom line would be more attractive to me than the comment ‘everybody had a jolly

good time’.”