Crash Course in ... Entertaining in a downturn

Christmas is coming, and it's time to organise the staff party and think about which clients you're going to wine and dine. But, hang on, maybe that's not going to look too clever with doom all around. Is it time for a wholesale re-think of your entertainment and hospitality activities in these straitened times?

by Alexander Garrett
Last Updated: 09 Oct 2013

Don't stop. First instincts may be to bring down the axe, but entertaining customers is part of your marketing mix, and there is a price to pay if you drop it. 'Entertaining is great for building loyalty, and as we go into a recession, it's important to retain loyalty from your customers,' says Izania Downie, a director at trade association Eventia.

Back to basics. Re-examine hospitality and entertainment as part of your business strategy; in particular, identify the objectives they are intended to meet. 'Your investment in face-to-face marketing should be focused in three areas: strengthening relationships, increasing customer loyalty, and retaining valued performers,' says Marc Balhetchet, co-founder of live communications agency Wave Marketing & Communications.

Cut the fat. Look for savings that won't damage the effectiveness of your spend; people will expect to see you curbing excess at this time. 'It's about being creative - you can save money by cutting out one course from a meal without affecting the overall results,' says Downie. 'Use professional consultants, who will know where the savings can be made.' Gratuitous extravagance could leave a sour taste, but having a good time is still allowed.

Make it relevant. The best events give people a chance to experience your product or realise a direct connection with your brand, says Downie. And you can make your Christmas party work as part of your internal communications strategy, adds Sam Gill, chairman of Concerto Group. 'Hold an awards ceremony, and get your MD to deliver a key address.'

Do something useful. Instead of partying, why not plant a woodland, take some deprived kids on a trip or do something else that is community-oriented? There is no better way to cement relationships, and some of your people - both internal and external - may actually prefer to spend their time gainfully.

Evaluate. Establishing an accurate ROI for hospitality and entertaining activities is notoriously difficult, says Gill, but there are steps you can take. 'Analyse the contracts and leads you have secured as a first step,' he says. 'With internal events, make sure you get good feedback from your people about the event itself.' When making the case to your board or finance director, you could show how much it would have cost to have achieved the same exposure through other marketing techniques.

Do say: 'In the light of the economic situation, we are going to review the money we spend on entertaining, to ensure it is effective and essential to the business.'

Don't say: 'You are invited to our grand Credit Crunch Ball. Dress code: Thirties-style Depression.'

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