Corporate hospitality is a phrase being whispered in offices around the country, rather than spoken out loud. Perhaps this isn’t particularly surprising given the media mauling of the Royal Bank of Scotland after the partially-nationalised bank lavished corporate hospitality on its customers at this year’s Wimbledon.
But despite the worries about being seen as overindulgent, most companies claim they are still seeing the value of corporate hospitality. They are simply being more careful about how they splash their cash, ensuring that their spending on client entertainment is an effective and extremely personalised use of budget.
Mark Cornish, head of global marketing and support at sponsorship evaluation agency Sponsorium, says that with this in mind, corporate hospitality packages need to be better tailored to the needs of brands.
Sponsorium looks at the scores given out of 1000 for corporate hospitality packages on the market and has discovered that many are lying between 620 and 640 in terms of meeting companies’ expectations. “This tells me that generally speaking they’re only 62-64% relevant to the brand’s needs. Brands are having to educate people who are selling packages about what their needs are,” Cornish claims.
This change in the perception of corporate hospitality coupled with the need to make client entertainment more relevant to individual companies has forced many in the business of selling client entertainment to innovate.
One-size-fits-all packages have been replaced by a greater range of choice and a variety of price points. At the higher end of the market, there is more demand for bespoke “money can’t buy experiences” to impress important clients. And even those wanting to entertain on a shoestring budget are being accommodated.
Vinopolis, a wine “experience” well-known for offering tasting tours, has recently been diversifying its offer to ensure that it attracts a wider corporate customer base.
As well as traditional wining and dining packages, it has introduced a comedy night and a cookery school, designed to boost team morale within businesses. It also provides venues for brands looking to offer their own experiential events for their consumers.
A few years ago, 60% of Vinopolis’ business was coming from the banking sector. Managing director Rupert Ellwood says he realised that it was vital to move away from relying on just one sector. “I wanted to open Vinopolis up to a wider variety of events. We have got customers to look at our space in a different way,” he reports.
He claims the business is: “Constantly innovating with new packages and new ideas to get people engaged in the space.” This, he says, is down to clients demanding innovations from corporate hospitality and not just signing up for standard, predefined packages.
Ellwood adds that his team has also become attuned to what different sectors want from corporate hospitality. “The legal sector tends to do more wining and dining, while pharma tends to like the team-building side of things. Our cookery academy is popular with this sector.”
Sporting venue Goodwood is seeing the market segment in terms of value and need rather than by industry. Like Vinopolis, it is providing a range of options to suit a change in client requirements.
Goodwood’s group head of marketing James Richards explains: “We now offer a wider range of products than we’ve done before around the major events. People are able to come in on a ticket – which starts off as a consumer product – that is increasingly being bought as a form of corporate entertaining. And it extends all the way up to a premium hospitality experience.”
“This year, we had someone take a room in [stately home] Goodwood House and they had a butler for the day. The client was looking for something that set them apart from everybody else.”
Audi, sponsor of Goodwood’s car show Festival of Speed, has been using the event for its own corporate hospitality. Jon Zammett, spokesperson for the car marque, says it uses its association with the Goodwood brand “as a means of hosting VIPs, society guests and important influencers for our brand”.
Next year, Richards says Goodwood will concentrate even more on bespoke experiences as demand for personalisation grows. “We’re looking at creating some really unique experiences. Corporate hospitality used to differentiate itself on the level of service you got or the price of a bottle of wine. What is much more important is that you differentiate the experience.”
The thirst for something unusual is set to be a lasting trend as companies seek the “talk-ability” factor. This can be done whatever your budget, if you think creatively says Hugh Robertson, managing partner at experience agency RPM.
He notes: “Clients are increasingly looking for creative corporate hospitality that has experiential elements, to make sure their events are both memorable and engaging. This doesn’t necessarily have to mean huge budgets but rather, it’s about being more inventive with what you’ve already got.”
Getting a sports personality to give an exclusive talk at an event or offering “backstage” passes to meet the famous faces at special events can make all the difference, adds Robertson. “A little bit of added fairy dust and ‘heroing’ of key products can also go a long way.”
The Brit Oval, which hosted the fifth and final Ashes Test last week, is looking at a variety of ways to keep the flow of customers to its events. In a bold move, it launched a premium corporate facility called The Montpelier Club this year, which is designed to appeal to those who want an exclusive experience above what it can already offer.
Next year, it will be looking at a wider variety of packages with several price points to make sure it can appeal across the board to the highest, lowest and middle sections of the market. Zac Toumazi, group commercial director of the Brit Oval, says the big test will be 2010, as he believes that many attending corporate hospitality events in 2009 signed up before the recession hit.
He suggests that corporate hospitality suppliers should adopt the mindset of high street retailers when it comes to promoting packages. “Loyalty should be rewarded. If you look at what the retailers are doing, they are practising the art of customer retention and making sure they offer value for money.”
And value for money – whether it’s budget-busting packages or high-end bespoke deals – is something that the companies and marketers buying corporate hospitality are set to be shouting about over the next year.
Case study: OCS Group
Sponsor of the Brit Oval
Sponsorship and corporate hospitality might not seem like an obvious investment choice for OCS Group, a company that offers property support services like cleaning and confidential waste management. But the business has recently signed a ten-year deal with the Brit Oval, showing a long-term commitment to the cause of cricket.
With some of OCS Group’s key markets being cricket-loving nations including Australia and South Africa, this no doubt helps to justify the deal.
But John Clark, marketing director for the OCS Group, argues that the core purpose of the company associating itself with the Brit Oval is about “putting something back into the community”.
Clark believes the cricket deal gives OCS the chance to demonstrate its ethics to future and current clients. He says it’s not about signing new deals as much as giving people the right impression about the people who work there and the OCS corporate culture.
Clark admits that client entertainment can be used in an unsavoury way by businesses to put pressure on clients to sign a deal. He’s keen to ensure that the OCS Group gives the right impression. “It provides a thank you [to customers, associates and employees] and corporate hospitality has had some fairly dire overtones in the past. So we tried to totally change how that comes across,” he claims.
There are three different levels of corporate hospitality on offer depending on what the customer requires. There’s everything from a position in the OCS box, through to tickets amongst the cricket crowd.
Clark says corporate hospitality isn’t about putting a figure on how much business you can generate. For the OCS Group it’s about communicating its brand values.
“The return on our investment is if people come away from the event and talk to people about us,” he says.
“If they talk about our ethics and putting stuff back into the community, then our job is done. That’s where we really try to differentiate ourselves when it comes to corporate hospitality.”
Hospitality at F1
A mixture of public relations and corporate hospitality allowed the Martini drinks brand to communicate its brand values at this year’s Monaco F1 Grand Prix.
Martini wanted to communicate the premium nature of its brand to lifestyle and fashion magazines, as well as key trade customers. It saw the Grand Prix, which takes place in one of the world’s richest areas, as the perfect opportunity to promote the brand against a backdrop of glitterati.
Mark Holdsworth, marketing controller at Martini, says the business thought carefully about how it should tell the cocktail brand’s story. “Martini has a strong heritage in motor sport, working with the likes of Porsche and Ferrari, so it makes sense that a lot of activation programmes still focus around that.”
He describes the Martini association with the event as a “money can’t buy experience” with a boat trip, a chance to watch the F1 race and even a visit to the Cannes film festival.
But is such a lavish event still appropriate for the brand when consumers are cutting back? Holdsworth says the event itself can be justified on the PR returns it generates alone, but he adds that corporate hospitality remains a core method for Martini to talk to its customers in a way that helps build lasting relationships.
He argues: “Even in times of economic crisis, it’s really important to get to know your customers well. And what better opportunity than a day on a boat, watching a race?”