Inside business: No thanks for the freebies

Corporate hospitality must entertain new ideas, writes Roger Trapp

IF THERE is one thing that unites fans of sports and the arts in anger, it is the increasing encroachment on their territory of corporate hospitality. Whether it is rugby at Twickenham, football at Wembley, pictures at the Royal Academy or the opera at Covent Garden, nowhere is safe anymore.

But increasingly, it is not just the true fans who are growing disillusioned. Companies themselves are wondering what they get out of lavishing all this attention on customers and suppliers. At a time when organisations are finding ways of measuring everything from customer satisfaction to employee loyalty, they are becoming concerned about their inability to assess the return on a substantial investment.

It is in response to this development that Huthwaite International, a training company, has developed a programme called "Influencing in a Social Context". Launched, appropriately enough, at Kempton Park racecourse earlier this month, it seeks to help in three areas, says Peter Belsey, who devised the programme.

First, it is designed to develop organisational and planning skills. This is because an event must run smoothly and be of interest to those attending to be rated a success by them. Second, it is supposed to develop practical skills in such areas as circulating among guests and encouraging people who might have a mutual interest in talking to each other. Third, it is aimed at developing the hosts' influencing abilities - which is, of course, the reason why companies go to the trouble of entertaining business colleagues.

Early reactions to the idea appear encouraging, says Mr Belsey. Paul Seagall, head of banking sales at Flemings, was one of those who attended the launch and he sees a clear need for the programme.

"It's a very good idea because a lot of organisations do spend an awful lot of money on corporate hospitality," he says.

Such events can be an important aid to business, he feels, because people tend to deal with those they like - and the way they know whether or not they like them is through meeting socially. However, especially at a time when hospitality budgets are vulnerable to cuts in the same way as those for advertising, he can see a clear need to make the activity, if not more scientific, then more structured.

In Mr Belsey's view, much of the problem results from the fact that many companies have not thought about what they are trying to achieve through corporate hospitality. In many cases they decide to obtain tickets for a particular event because somebody senior in the organisation either likes that activity and sees a way of mixing business with pleasure; in others, the reasoning is no more than that everybody else is doing it, so they will look "cheap" if they do not offer similar packages.

But it does not end there. Even if the company has a clear notion of what it is seeking to gain from the occasion, those responsible do not always choose the right activity. In Mr Belsey's words, it is not uncommon for managers to obtain the tickets to a prestigious event first and then decide upon whom they are going to lavish this treat.

This is the wrong way around. He says organisations should start with a couple of questions. First, what might clients enjoy? Second, what sort of event will allow you to create the "talking windows" that justify the hospitality in the first place? Accordingly, an invitation to a football match is unlikely to go down well with a rugby fan. Equally, neither event would be of much use if the company organising it was seeking to get over some message rather than just giving contacts a good time, unless there was some kind of meal beforehand - and that might involve more time than the guests were prepared to give up.

Similarly, companies need to decide between cocktail parties, where guests can wander aimlessly, and formal dinners that are a good way of making presentations but can be too structured.

All in all, says Mr Belsey, the planning and organisation of such events needs to be much more structured - and that applies to the strategy behind what can now be a highly expensive activity, as well as the logistics. "There is a huge need for improving value," he explains.

Mr Seagall is so convinced of the role this sort of thinking has to play that he believes it should be part of the package offered by the companies which organise hospitality.

And the result could prove beneficial not just to the suppliers of hospitality but to the guests as well.

One of Mr Belsey's findings when developing the programme was that the modern business climate made it increasingly difficult for people to justify spending time out, particularly during the working week. Which is one explanation, perhaps, for all those empty seats at "sold-out" big events.