3 January 2017
Why Corporate Hospitality?
Against the background of 2008’s financial crash and the slow growth and austerity policies that have defined the UK economy ever since Corporate Hospitality has been variously characterised as a distasteful villain or an extravagant wastrel. The harsh reality of the recession and painfully slow recovery harboured an environment in which the lenses of the sports photographers at Twickenham were pointed not at the pitch, but to the privileged inhabitants of the West Stand’s executive boxes.
Corporate Hospitality had a problem on two fronts. First, it was seen as an expendable activity in a time when companies were tightening their belts. Second, it had an image problem; how can a responsible company allocate spending to champagne and canapes when the public at large were struggling to pay the bills?
A closer inspection, however, shows Corporate Hospitality to have been much more resilient than people feared. The market fell by 2.5% between 2007 and 2011, but that compares very favourably with most other industry sectors. While 2011’s Bribery Act was perceived by some to be an existential threat, in fact, it recognised Corporate Hospitality as an important part of business activity, merely emphasising a “proportional and reasonable” approach.
The sector that has emerged from this examination is significantly stronger for the experience: emboldened by support from SME’s and big business; more creative due to increased competition for the marketing pound; more intelligent thanks to a new commitment to targeting and measuring ROI; and crystallised as an essential and integral part of the marketing mix, a vital tool in customer retention and business development.
How did this happen? The people that mattered recognised a very simple truth: relationships matter. In this often faceless and isolating digital age, time spent face-to-face with valuable customers and prospects is invaluable. When that face-time is spent in a social context, nurturing a relationship while sharing an exciting or uplifting experience, it becomes indispensable. When surveyed, 65% of companies said they would maintain spend over the next 5 years even if we were hit by a recession. 15% even said they’d increase it to take advantage of those cutting their entertainment budget.
Heading into 2017, buyers of Corporate Hospitality are sourcing more intelligently than ever before, asking fundamental strategic questions that weren’t so prevalent when the budgets didn’t have to be justified. The fact that 75% of invitations go to existing customers – along with 90% of spend – shows that retention is by far the more prevalent motivation. However, companies are targeting key new business prospects to share a corporate experience with their existing customers, so those customers act as cheerleaders and champions, all while feeling valued by their supplier.
The buyer’s strategy also has to be tested and scrutinised in the most fundamental way possible: does this give me a return on my investment? Before 2008 there was little in the way of measurement that wasn’t anecdotal. In 2016, 70% of buyers employ a formalised tracking tool, setting out objective benchmarks against which the success of a corporate event can be measured. The agencies who have enjoyed the most success are those who have helped their customers in this endeavour in three essential ways: before the event, by providing expert advice on targeting or creating the correct events to maximise positive responses to invitations; during the event, by raising the bar on the level and creativity of the experience provided; and post-event, by coordinating the surveys and information-gathering to help customers measure the success of the activity.
So why Corporate Hospitality? Because relationships are the essential part of any business, there is no better way to nurture them than by spending time sharing an experience. In 2017 that experience is highly likely to be a better experience than ever before, enhanced by creativity and a pursuit of excellence driven by the need to deliver in a more competitive space. Because Corporate Hospitality delivers enhanced loyalty from existing customers and measurable ROI. Because new prospects can be targeted with events in an intelligent way, and enjoy those events in the company of existing customers who champion your services. Because the industry listens to its customers better and tailors events better to their requirements.
Fundamentally, because the Corporate Hospitality industry was put through the wringer and emerged stronger than ever before: a genuinely vital part of any company’s quest for customer retention and business development.
If you would like to discuss your corporate hospitality needs with Paragon, we have over 15 years experience in the industry and would be glad to assist you. Contact us below.