There is a cynical view of the corporate events industry that in good times, events are an opportunity; and that in bad times, they are an expense.In today’s marketing environment, it is perhaps more accurate to say that at all times, events are an opportunity – so long as they deliver a successful return to the business.
It might not be as pithy a saying, but it reflects the heavy emphasis placed on accountability in the corporate events market. With the majority of organisations looking to make every department justify its spending, it is unsurprising that the pressure has fallen on marketing – traditionally one of the biggest spenders – to come into line with corporate policy.
Counting the pennies
“There have been a lot of changes in corporate hospitality over the past couple of years, and marketers are looking for the return they will get from hosting an event,” says Mark Bloxham, marketing, PR and communications manager at recruitment company Adecco. He believes this sounds the death-knell for corporate events that exist simply “because they always have done”. “That mentality is disappearing because of the influence from finance departments,” he adds.
With corporate event budgets under closer scrutiny, better management of event spending is being encouraged from the boardroom downwards. For instance, BT has consolidated its corporate hospitality and sponsorship activities into one department. Previously, individual lines of business were responsible for organising their own corporate events agenda.
“What would often happen is that we would end up with five different departments hosting boxes next to one another at an event, so we were buying poorly,” says BT head of commercial sponsorship Paul Leonard. “Such consolidation keeps things fresh, as a department might struggle over time to fill a box at a football club, but we can rotate faces and optimise our use of the facility.”
How companies allocate their corporate event budgets also appears to be increasingly influenced by the return on investment (ROI) an event delivers. A survey from event management firm The George P Johnson Company (GPJ) found that 16 per cent of marketers plan to spend more in 2005 on event marketing because it demonstrated its worth last year. Tied into thisis the finding that 38 per cent of companies believe event marketing delivers the best ROI compared with other elements of the marketing mix such as broadcast advertising, internet marketing and direct marketing, which, incidentally, topped the poll the previous year.
In small measures
However, while it makes good financial sense to allocate a corporate event’s budget based on the ROI it delivers, the problem with events, as marketers knowall too well, is that they are not particularly easy to measure. “Events are not always straightforward to classify, because it can take longer to seethe financial benefit,” says Mark Taylor, operations director for events at travel and event management company Grass Roots. “Then you have to ask whether a sale happened because of the event or due to it being a new product, for instance.”
Show us the money
On a crude level, the financial success of a corporate event can be measured simply by comparing the expenditure on the event with the financial gain achieved. A more accurate measurement can be found by defining specific objectives and identifying whether these have been met by the event. “From a large overseas conference to an exclusive sporting fixture, if we have achieved the client’s objectives they will have experienced a successful event and subsequently justified the expenditure,” says Kim Roe, operations director at event management company Circa Group.
Therefore, the first task on any marketer’s to-do list is to decide on some measurable objectives for their event. The more specific they are – such as “increase sales by 20 per cent” – the better. “The worst reason for organising an event is that the company thinks it should be holding one,” says Richard Beggs, managing director of event management company MVM and one of the founding directors of the International Special Events Society (ISES).
The preparation stage is vital because if a company does not know why it is inviting a guest – perhaps a contract is pending or it wants to increase the amount the client spends with the company – then it has no parameters on which to measure the event’s success.
Once the objectives are in place, the event needs to be pitched to suit the candidate being invited; a Formula One fanatic, for instance, will obviously prefer a trip to the Grand Prix to a day at the races. BT’s Leonard also recommends companies differentiate their corporate hospitality by making it a “hot ticket” event. If you simply take someone to the theatre, it is the same as buying a ticket from the box office,” he says. “But if you can arrange to meet the cast afterwards you get more value for your money.”
Wining and dining
At the same time, making the event cost-effective is important. “Use the right combination of resources to execute on the experience,” says GPJ executive director Kim Myhre. “So ask yourself, for instance, whether it is really necessary to have a banquet to derive the desired response from your target group.”Once the event is finished, the company can begin to evaluate and measure whether it was a success. Worryingly, however, research from Meeting Professionals International and American Express found that one-third of marketers do not always measure the return on their corporate event. More than half do not share performance measurements with suppliers and most suppliers do not know when results are being measured.
Those that do evaluate their event’s success have a variety of tools at their disposal, with the most popular being post-event attendee surveys. Meeting budget and revenue reports and client feedback are also frequently used.Though they are effective, these tools do not provide a complete picture. “People often don’t have the time to fill in questionnaires at an event,” says Sarah Green, director of event management company Tailored Time Events.”It also depends on the people you are inviting; a chief executive, for instance, will not fill in a questionnaire.”
She urges clients keen to generate sales growth through their event to view it as a launchpad from which to develop the client relationship. For instance, one of her clients is holding a seminar with the aim of generating five or six warm leads from a total attendee list of 40. “At the end we will make sure everyone has registered, so the client has every attendee’s details and can follow the event with e-mails and sales calls,” she explains. “The client is also holding a question-and-answer session so it can pinpoint who is asking what, and build relationships through additional one-to-one briefings.”
Where there is a strong sales element, it can be quite straightforward to calculate the success of a corporate event in ROI terms. Take the example of Eurostar, which conducted a high-profile event for the launch of its high-speed rail link in September 2003. MVM’s Beggs says: “the client spent &£4.8m and the benefits measured in column inches and sales growth came to &£36.3m, which meant Eurostar achieved ROI of &£31.5m in the 12 months following the event.”
Figure it out
But when the objective is to deepen a relationship with a client, the tangible benefits are not always easy to identify. “If you use corporate hospitality to maintain client loyalty, it is harder to put a figure on its value because whatis the probability that the client would have stayed with you anyway?” asks Marketing Society chief executive Hugh Burkitt.
It also makes it hard to compare a wide range of corporate events like for like basis. Yet this does not mean that relationship-building events should be disregarded; after all, it is more cost-effective for an organisationto retain an existing client than to acquire a new one.
“Essentially, events are more about relationship development than financial return, because it could take 18 months for a client to sign a &£4m contract,” says Leonard. Given the time lag, there is also a question mark about how much the event contributed to the contract win, although it will undoubtedly have helped deepen the relationship with the client.
It is fair to conclude that there will never be a completely accurate way of measuring the effectiveness of events, but this is not an argument for ruling it out of the marketing mix. Whether the event is a day at Ascot with a few key account managers or a large party catering for hundreds of clients,an event can always be made accountable as long as it is aligned to some clear corporate objectives.
“It is easy to sneer at corporate hospitality, but I would put it very high in the marketing mix because anything that allows face-to-face contact is enormously valuable,” says Burkitt. “It is extraordinary how important talking to and creating a relationship with someone can be.”