“Sport has become just a glass of champagne in a different tent,” bemoans Julian Lloyd-Evans, managing director of advertising at Dennis Publishing. “People lead busy lives. Tickets to the rugby and Wimbledon are still relevant but you spend half your time ringing round trying to persuade people to come. People drop out so the people you end up with aren’t your original guest list. These days, people want to attend something that is useful but where they can still have some fun.”
Using big-name events for corporate hospitality is still important for marketers but, whether it is driven by tighter budgets, the Bribery Act or simply a more strategic approach, high-profile events of the forthcoming social season are being used in slightly different ways.
Corporate packages for sporting events can cost thousands. A private chalet on Wimbledon’s centre court, for example, can cost up to £4,000 per person for the men’s singles final. Does the brand spend that much on a sports fan, or invite someone who just wants a glass of champagne and a chat with their host in a liveried box? In either case, is the brand really getting its money’s worth?
Our ultimate goal in doing corporate hospitality is building relationships and that you can’t put a price on
Michelin uses its natural relationship with motorsport by ensuring a high profile at many of the season’s key racing meets such as Le Mans, Silverstone and both Goodwood’s Revival and Festival of Speed. “We put our main focus on the Goodwood events because they reflect our premium brand values,” says Michelin UK marketing director for passenger and light truck tyres Alexander Asklov.
“The big investment is on the stand which is a large presence. It shows our products to consumers who we don’t normally get to engage with as we sell through distributors. But it also gives us a chance, particularly with the Revival event, to invite key clients and discuss new developments.”
Spanish beer brand Estrella Damm also emphasises relationships, choosing to use its exclusive sponsorship deal with FC Barcelona in a focused way by cherry-picking a few select invitees to come to matches, rather than benevolently doling out tickets to all comers (see below).
Genna Burchell, brand manager for Estrella Damm distribution company Wells & Young’s, explains: “It’s a really important part of our corporate hospitality package when we’re looking to meet up with customers that this would appeal to. It reinforces the Barcelonan heritage of the beer that is important to create differentiation in a crowded market, as well as giving us an opportunity to reinforce relationships that ultimately increase our market penetration.”
Burchell notes that the UK arm is lucky to benefit from the halo effect of the Spanish parent company’s financial outlay on the sponsorship without having to add much more investment – barring the cost of flying wholesalers and bar owners out to Barcelona and accommodating them. However, she also says it is hard to determine where the return on investment might be felt.
“Hospitality funding is sourced from within the marketing budget, however there are obvious crossovers where our activity is part of the existing Spanish parent brand’s sponsorship deal, which we benefit from, and that makes it hard to quantify what the budget would ultimately be for a hospitality programme.
“Our ultimate goal in doing corporate hospitality is building relationships and that is something you can’t really put a price on.”
Michelin’s Asklov is more precise about how he values his corporate hospitality programmes. “It is really hard to tie investment in hospitality to revenues but we measure reach and footfall of how many people went through the stand. We also use the net promoter score, which is the most important metric because the whole exercise is to make our customers and partners feel as passionate about the brand as we do.”
As is often the case, the introduction of stringent regulation around marketing activity tends to sharpen a marketer’s focus. The Bribery Act of 2010 has set out clear guidelines as to what it categorises legitimate business-oriented events versus giving potential partners a good time in the hope that sales will experience a resulting spike.
This is in addition to the rules that govern regulated industries such as financial services, and for insurance group Royal London this means treading carefully but still having fun. It will sponsor the English Cricket Board’s one-day series of events this year, launching its activity next week, along with a new brand identity.
Group head of brand and sponsorship Emma Hill notes: “We are sponsoring the cricket this summer and we’ve got a whole host of activities taking place that are designed to bring to life the quirkiness of our new brand.
“But we are a regulated business, so any activity we host needs to abide by the guidelines set by the Financial Conduct Authority. The days of ‘the jolly’ are long gone but if you put some thought behind your events, clients can still have a good time.”
People lead busy lives so they want to attend something useful but where they can still have fun
Dennis’s Lloyd-Evans says that companies are up to speed with the Bribery Act. “We know that guests come because they’re interested in what we have to say. There has been a change since the Act but we’re still getting as much out of corporate hospitality and we produce better events.”
In Lloyd-Evan’s case, this means hosting breakfasts or early suppers with a business theme, such as Dennis’ AdThink events, but incorporating a spot of fun such as merging it with a wine tasting.
In fact, with an emphasis on getting the job done, the lines between conferences and corporate hospitality are blurring.
Research from Keele University’s conference team suggests that elements such as ‘Unconferencing with bean bags’ should replace the stuffy table-notepad-panel combination in the near future. Equally, quizzes aren’t a gimmick but a chance to team build, and getting into the fresh air helps anxious delegates. Finally, ‘downtime’ was noted as vital to capture the views of shy attendees. And this, the research determined, should probably happen in a bistro.
Dennis’s Lloyd-Evans notes that the corporate day out is still important. One of Dennis’ titles is The Week, a current affairs magazine and Lloyd-Evans says its audience is a strong market for shooting days out.
“You have to find a common ground with people and if you’re an enthusiast for something, then the attraction is access. But it has to suit your brand.” He also suggests that building events around charities as well as going to the traditional social season venues but getting out of the corporate tent makes for a far better experience: “Get in the paddock and pat the horses.”
The three big challenges of great hospitality
Guaranteeing attendance at even the hottest ticket in town is not always a given. If a brand is going to spend thousands of pounds per person then clearly the invitee must have some decision-making capability. Invitees who leap at the chance of a £4,000-a-day treat at Wimbledon may well not be the people the brand needs to spend its time with.
“The British are being more American in their approach to business. We’re getting fitter, drinking less and people are using all parts of the day. We’ve spent a third more of our budget on breakfasts than we ever did before,” admits Julian Lloyd-Evans, managing director of advertising at Dennis Publishing.
2. The Bribery Act
The Act is not intended to put a halt to all corporate fun. It is aimed at parties who try to exert undue influence on companies to their own ends. Says legal practice DLA: “Inviting several clients to a Christmas party is not generally the type of event which would trouble prosecutors; but inviting a particular client to an all-expenses-paid golf weekend in Portugal when an important contract is up for renewal might well be a different matter.”
3. Brand fit
While high-profile events to show off the brand’s cachet and ability to gain access through either connections or financial means are attractive, brand fit is the most important yardstick for hospitality success. Estrella Damm is not aimed at the real ales, beer and ramblers segment and so does not sponsor Oktoberfest, and Michelin has no relevance at Wimbledon so sticks to motorsport.
Estrella Damm delivers Barcelonan hospitality
Estrella Damm uses a number of key sporting and cultural elements that are closely linked to the Catalonian capital, Barcelona. The brand’s ambition is to remain as identifiable with this specific area of Spain as Dos Equis beer is to Mexico. As a result it sponsors both FC Barcelona and the Sonar Music Festival, the annual progressive music and multimedia event that takes place in Barcelona.
Taking trade partners to the festival is part of an incentive scheme based on incremental volume sales, so it is also important to showcase the brand to the more urban bars and restaurants.
Genna Burchell, head of brand at Estrella Damm, is careful to point out that, while hospitality trips are both an introduction to the brand and a reward for doing business, they are done in compliance with the Bribery Act.
“We’re obviously very conscious of the Act and in hospitality there are also tax implications for our business clients so we need to make sure that any trip is centred around education.”
The brand is partnered with famous Spanish tapas chef Ferran Adrià of elBulli fame and uses this link to entertain its larger restaurateur clients at his Tickets restaurant in Barcelona. The idea is to demonstrate how well the product works in the gastro environment and inspire trade partners.
Why couldn’t this be done in the UK? Because Estrella Damm is linked so strongly to Barcelona, the company feels it is important to convey the intrinsic Catalonian heritage of the brand that can only partially be delivered in a tapas restaurant outside Spain.
“We don’t tend to play on the sponsorship link with FC Barcelona with our consumer messaging [in the UK]. We are focusing more on embracing the Mediterranean way of life through gastronomy, music, arts and culture.”