Entertainment must deliver a good return

Corporate hospitality has often formed part of the business armoury in the battle to get consumers spending. But now the days of indulging in good champagne may have given way to a new sense of sobriety. Difficult market conditions are dictating a shift away from pure glamour and glitz to focus on core brand messages, relationships and values.

Companies specialising in corporate hospitality are now being forced to offer clients something different. Whether this is because businesses are cancelling plans as a short-term cost-cutting exercise, scaling down their marketing or simply don’t want to look ostentatious, it requires a wholesale change in what is offered.

P&MM Events & Communications executive director Nigel Cooper says his company has developed a range of “recession busting” solutions for a number of clients. “Hospitality doesn’t have to be tickets to Wimbledon or a box at Old Trafford,” he says.

Cooper suggests that a company in south-west England could, for example, take a select group of clients for an interactive cookery experience at Rick Stein’s Cookery School in Cornwall combined with a trip to the nearby Eden Project, which would ensure the event addresses the contemporary issue of sustainability.

Others are also following the trend of making corporate responsibility more about learning, business development and networking. Dan Collins, founder of motivation and leadership company Fresh Tracks, suggests brands could capitalise on weekend activities such as trips to Alton Towers for guests with children. Alternatively, they could replace a client’s mundane commute to work by chauffering them to the office on their birthday and sitting in for a one-on-one without wasting work time.

Corporate hospitality will always prove its worth, argues Ted Walker, marketing manager at corporate entertainment specialist Keith Prowse. He says that while certain online tools offer good ways for marketers to communicate with clients, face-to-face is still most important when it comes to decision making. He adds/ “Coupled with the need to be seen to be spending soberly, corporates are looking for activities that not only attract the target audience but give a return on investment.”

For those marketers at smaller businesses that are less likely to receive bad publicity for explicit spending, one side effect of the drop in bookings from traditional corporate clients is more availability at iconic events such as The Wimbledon Championships, Cartier International Polo, Goodwood and Test match cricket between England and Australia.

“We have noticed a marked increase in small and medium-sized companies buying corporate hospitality packages,” says Walker at Keith Prowse. “Smaller organisations are aware of the need to get up close with their clients; therefore, corporate hospitality is becoming integral to the marketing mix.”

At Coutts private bank, corporate hospitality has been part of its marketing strategy for more than 300 years. It has become an important way of developing relationships and building loyalty with clients. Coutts head of sponsorship and events Jill Chimes reveals: “A private banking relationship is built on trust and understanding; seeing clients at less formal occasions is a great way to build on these outside the work environment, cementing business relationships.

“Understanding our clients is integral to our business and meeting them outside the bank grants us an opportunity to really learn about them and their world without the formalities.”

While Coutts claims it has always been prudent about getting the most of out of each hospitality occasion, the bank has taken the current anti-indulgence mood into account by bringing some of its events in-house, not only to give clients a sense of familiarity with the brand but also keep costs down.

However, it does not plan to start chopping away at its sponsorships and hospitality opportunities. Apart from its out-of-house hospitality, Coutts also runs a range of partnerships, including supporting London Jewellery Week in June each year (see image) and Chimes says these will adapt to suit the mood.

“We believe that during these uncertain times, it’s important that we continue to ‘get out there’ and remain visible and close to our clients and events,” she comments. “But we will not be hosting the official launch party this year and instead will be holding an event which will allow many up-and-coming jewellery designers to display their collections – alongside some well-known brands – to our clients and contacts.”

Justine Clement, managing director of promotions specialist Unmissable, says that editing hospitality portfolios to fit the trend of lower key events is going to be popular this year. While the main events will continue as normal, the nice-to-have extras such as champagne receptions are off the menu.

“Many large companies, while maintaining a level of corporate hospitality, do not want to broadcast what they are doing and definitely do not want to shout about it,” she says. “Many want to keep their corporate hospitality under the radar and be seen as prudent and spending their money wisely.”

Brian Bell, former marketing director of global technology brand Lenovo, agrees that corporate hospitality should not be dismissed out of hand just because of a recession but must be monitored and measured effectively to ensure a return on investment.

“Like any other activity, it needs to be targeted at the right contacts,” says Bell. “If the objectives are defined at the outset, then it will be clear if it is the right thing to do.”

 

Case study – Emirates
Airline Emirates often invites guests of the company to join it at events. As the sponsor with naming rights to the Arsenal FC stadium and a long-term partner of the Sydney Symphony Orchestra, it uses these occasions to reward business partners for their support.

Emirates divisional senior vice-president of corporate communications Boutros Boutros is responsible for overseeing this. He says entertaining executives in a relaxed environment helps the airline do better business. “In a world where time is precious, it allows us to get some quality one-on-one time with key customers and guests.” The corporate hospitality laid on by Emirates also has an extra dimension in that the airline’s brand is based partially on its own hospitality. If the flights are sold on the promise that passengers will be well looked after, this must be reflected in the standard of corporate hospitality.

As a result, Emirates does not believe a recession will have any direct effect on its corporate hospitality initiatives. As the benefits have been accrued as part of its long-term relationship and contractual rights with Arsenal and the Sydney Symphony Orchestra, they do not need direct, immediate investment.

“In today’s climate, it is even more important to be using the hospitality assets that we have available to reach our key customers and partners,” says Boutros. “It is important to maintain standards without compromising quality for cost – consistency and quality of service is imperative.”

 

Trends

Corporate Hospitality
– There is a move to more discreet activities, such as entertaining clients in private clubs. Many brands are using venues off the beaten track and renowned for their discretion. For example, famous jazz music venue Ronnie Scott’s has now launched business networking packages, which managing director Simon Cooke claims brings “more to the table than a run-of-the-mill meetings space”.
– Brands are demanding more value for money. Those that are still entertaining are seeking added extras. Instead of simply taking clients to the Grand Prix, they want an ex-racing driver brought in to talk to them. Or rather than watching a Wimbledon match, they might receive professional coaching tips from a former champion.
– Brands such as banks are buying a smaller percentage of “ticket-only” packages without extra hospitality.
– Some clients are being forced by senior management to justify why they attend events, with those activities offering an educational or training option being seen as suitable; those based purely on entertainment are less popular.
– A number of companies that are fairing well in the current markets or are in less exposed industries are ambushing their competitors’ clients and investing in corporate hospitality. They are able to scoop up packages at a discount.