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March 14, 2007

THE SWEETENER: The other side of corporate hospitality

Two weeks ago EVENTS:review looked at the benefits corporate hospitality can bring to a business. The conclusion of the piece was that entertaining clients at some kind of ‘special’ event presented the opportunity of spending several hours with them and engaging in a way that is difficult, if not impossible, to achieve using other marketing channels.

That would have been the end of it were it not for a conversation a few days later with someone who works for one of the event industry’s best-known suppliers. He had read the piece and broadly agreed with what was said. However, he pointed out that he had seen another side to it.

“In a number of conversations I’ve had recently I’ve reached an in principle agreement with a client only for them to ask what was in it for them,” he says. “It seems that a couple of hospitality tickets for a sporting fixture or a rock concert will swing the deal. Now, my company doesn’t do that which means we’re losing work, for which we are every bit as capable as our competitors of doing, and at a similar price, because we won’t cross the client’s palms with some kind of personal incentive.”

An acceptable way to do business

So, ‘looking after’ a prospective client seems to be an acceptable way for some companies to ensure they get business ahead of their competitors. But what does ‘looking after’ actually mean? Is it quite simply sound business practice or is there a sense in which it could be seen as a sweetener or inducement or even a bung?

“That’s a good question,” says one venue boss. “I have been on many corporate days out and I have to admit that in a number of cases I bought the product that my hosts were offering. However, I certainly never felt ‘bought’. My employers knew that I was going on these outings and would soon ask questions if I had been giving business to anyone for any reason other than the interests of the venue.”

That maybe the case, but people aren’t daft. They must surely know that offering a spectacular day to remember could well give them the edge over their competitors.

The manager of a well-known UK destination offers this interpretation: “In many ways hospitality is what we do,” he says. “If I am trying to convert an enquiry for a 500-delegate conference, I am naturally going to invite the client to my destination, put them up in a good hotel and feed them in good restaurants. If there is something going on in one of the local venues, I will get tickets for that, too.”

Logical progession
The reason this is done is not to provide the client with a jolly, it is actually, rather logically, to show them what the destination can do and what an ideal location it would be for the client’s event.

“Nowadays we tend to run these trips over a weekend and invite partners as well,” he continues. “This is done purely because our research shows that this works better than doing it midweek, not because we think that by giving husbands and wives a nice weekend we somehow get them on our side.”

How would he feel, however, if the client agreed to use the destination, but only if they were offered a day out at a high-profile sporting or cultural event?

“I think that then you would have to take a view and we have certainly never played that game,” he says. “But, you know what, so many people are offering hospitality nowadays. You have to ask if it isn’t just sound business practice.”

No bung culture

Thankfully, there doesn’t seem to be an overt bung culture re-establishing itself in the events industry, but the fact still remains that it is a subject that is littered with grey areas.

To a large extent hospitality is what the event industry does and it is logical to use it, as an increasing number of companies are, as a component part of a wider marketing campaign. As our contributors have all told, us it is rapidly becoming an accepted and attractive method of engaging with clients.

On the other hand, how is our original supplier supposed to feel when he continues to lose contracts because his firm won’t offer incentives, sweeteners or inducements to prospective clients?

Some would say they should wake up and do it themselves, it’s becoming standard practice. Others would advise restraint saying that it is better to take the moral high ground.

The trouble is that the moral high ground doesn’t necessarily appear to lead directly to contracts signed and money in the bank.

What do you think of this $type?





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