Is hospitality worth the trouble?

John Fisher, Director, FMI Group, asks incisive questions

After a recent seminar I conducted for event organisers about the UK Bribery Act…emphasising the point that hospitality was not illegal and that the Ministry of Justice was really not interested in who you may take to Wimbledon this year… one delegate from the pharmaceutical industry asked if it was okay, then, to still put chocolates on the pillows of cardiac specialists as a gift from the organisers. My reply was that if a heart surgeon was really going to be ‘unduly influenced’ by chocolates on his pillow, it’s probably time to look for another medic.

On the wider issue of hospitality in general, many venues and suppliers are wondering whether hospitality actually works as a marketing tool. Or is it just an urban myth like the alligators that live in the New York sewers. (They don’t, actually.) After all, hospitality costs money and everything needs an ROI, even the time it takes to ROI the ROI calculation itself.

Supporters of client hospitality claim that ‘it only takes one or two clients’ to make the whole exercise worthwhile. In gross profit terms that’s probably true, if only they knew what their costs were. True, there’s not much expense in sending out an email.

But with opening rates of less than 10 per cent for commercial emails you have to spend a lot of time cleaning the list beforehand and perhaps buying a more up to date one. Then there is the creative cost of devising the message, paying for effective visuals (no more shots from the 1980s of the hotel concierge, please!), and analysing the results.

The missing trick is then to badger those who say yes to within an inch of their lives to ensure that at least one third of the yes’s actually turn up on the day. That’s all man hours and money.

At the event itself you may have agreed a per head amount for booze. But in reality the field sales guys can simply pad out the budget with their business credit cards. Everyone knows that it will take three months for those costs to work their way back through the financial system to be allocated to that particular event. By that time management will have all moved on and have bigger fish to fry…such as the next hospitality event.

So, having invited 1,000 people to your lunch event, of whom only 100 even open the email, 25 say they will come and on the day only 8 turn up, you do really question the point of doing hospitality at all. I wonder how many of those who do come, would have come anyway because they are professional hospitality attendees who work locally and prefer drinks and nibbles in a smart restaurant to sandwiches from a supermarket.

What is the alternative? Never meet anyone face to face, just send out brochures, email witty remarks about the names of all your new hotels, write blogs and publish newsletters. After a few months of this cyber-marketing you can rejoice in the improvement of hit rates to your site and your corporate ‘mindshare’. But your list of actual new business might be a little thin.

The hospitality business attracts hospitable types who like to meet up. One idea or one contact leads to another and suddenly you start to get some traction which in business speak means more sales.

Yes, it may be more expensive than you thought and, yes, it is highly frustrating to do so much work for such a small return. But then again, how many parties have you been to when you moan about the travel costs to get there, the food, the music, the smoking...but then you meet someone who later turns out to be a very important person in your life?

Are hosted buyers the answer?
When no show is a good show

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