29th March 2007

Corporate hostility

Effective business tool or unashamed jolly for handpicked VIP guests? John Spain looks at corporate hospitality

Over the last 20 years a variety of sporting and cultural venues have come to realise the value of offering spectators and audiences something more than just a ticket for the match. A typical sporting package will usually include arrival drinks, three or four-course lunch, a cream tea and unlimited booze until around about an hour after the event has finished.
It is indeed a pleasant way of spending an afternoon but with prices ranging from around £100 up to several thousand per head it must surely be a somewhat indulgent and cost-inefficient way of broadcasting your company’s message?
A glance at the prices charged at two of the UK’s premier sporting venues shows that a table for ten could cost, on paper, a significant amount. Prices at Ascot begin at £80 and rise to £120 except during the Royal Meeting when the spread is £215 up to £1200. For the upcoming England v France international match, a place at Twickenham will set you back anything between £650 and £870. What possible value does the corporate customer derive from this outlay?
The sales and marketing director at Ascot, Gary England, thinks it is all about building relationships.
“Everybody does business via email nowadays which means that the opportunities for actual, as opposed to virtual, meetings are getting ever more limited,” he says. “Our clients find that the hospitality they offer really delivers value to their businesses because they have the undivided attention of their clients for six or seven hours and are therefore able to strengthen relationships and develop business potential.”
Kevin Maxwell, sales and marketing manager for the Twickenham Experience, echoes this.
“It’s an old cliché but people buy from people which means that if you have a personal relationship with someone your business relationship will benefit,” he says. “As opposed to the who-is-this-person-on-the-other-end-of-the-phone-that-I-know-nothing-about scenario, with corporate hospitality you’re carefully targeting specific contacts. It’s about building relationships with customers by sharing things that they are maybe interested in and relating to them on a more personal level.”
This is certainly true but surely the cost remains critical, especially when you look at what else you could do with the money. At both these venues, for example, the lower prices you pay for a table of ten could buy you a reasonable advert campaign in the press while at the higher end you’re looking at a very good exhibition stand that you could take to several tradeshows.
“Yes, £7000 gets you a decent stand or a good advertising campaign in the press but this is pretty much a scattergun approach, you only reach a target market that you hope will be prompted to think about the product you’re offering,” says Maxwell.
England agrees. “It’s incredibly difficult to gauge the ROI on display advertising while exhibitions are quite speculative,” he says. “Also, both of these only provide you with the mechanism to make the first contact, they don’t give you the opportunity to fully engage.”
The thought of having a number of your most important existing and potential customers in one place for several hours will be an attractive proposition for most businesses but you would surely be foolish to suppose that pushing the boat out at such an event is going to guarantee a sale.
“Of course,” says Maxwell, “but let’s say a given company works in a sector where the products are all very much of a similar standard and price. Hospitality allows this company to engage with its clients and to demonstrate the values that it thinks separate it from its competitors.”
The term ‘values’ is interesting, for many years companies have sponsored part or the whole of the event they’re at. This enables them to draw some very powerful associations between what the event is all about and what they would like you to think about their brand.
Now, apparently, simply inviting people to a box at an event is being used by firms to say something about what they do and the importance they attach to their customers and certain of the values exemplified in the brand of the event.
The arguments supporting corporate hospitality are reasonably compelling, especially if, like the rest of your business activities, you carefully identify why you’re doing it and what you want to achieve.
The secret probably is to use it as part of a wider marketing campaign that embraces a number of the different available channels. Just as you would be foolish to dedicate all your marketing resources to only placing adverts in the press you’d be daft to spend it all on travelling up and down the country going to as many rugby internationals, race meetings and cricket test matches as possible. Pleasant though that may be.