Improving Relations with Corporate Hospitality
Corporate hospitality within a business can really help to improve client relations and staff morale. It can motivate a sales team, raise customer awareness, build skills that promote teamwork, or simply celebrate a special occasion or company milestone. The long-term benefits can include improved communications and understanding, a stronger organizational spirit and—most importantly—a reduction in staff turnover due to boosted loyalty and greater motivation.
Hosted for the right reasons as part of a consistent ongoing policy, corporate hospitality can help boost business profits. Employees who feel better about where they work are generally more productive and motivated. It's as simple as that. A hospitable company is also likely to enjoy lower turnover, an important consideration in this era of low unemployment and hard-to-find skilled workers.
You do, however, need to be aware of some disadvantages. If you're holding a social event, make sure that all employees have an equal opportunity to attend. Give as much notice as you can so people can make arrangements, such as finding a babysitter. Rather than concentrating on evening events, you may want to hold some at lunchtime, too; employees with long commutes will appreciate it. Also think very carefully about whom you intend to reward. For example, a gift given to one individual may be derided as favoritism. It's important to exercise discretion and to be aware of any potential risks of damaging staff morale.
Think long and hard about hosting a corporate event for employees purely because you think staff morale is low. There may be more practical reasons for the discontent (such as wage disputes, unfair promotion problems, or a lack of key equipment). If so, team-building activities or a fancy wing-ding are unlikely to help at all. Indeed, they might compound them if your staff thinks you're spending what could be their bonus on perceived frivolity. Get to the root of the problem first. Then, decide whether or not a corporate event is the best way of solving it.
External corporate hospitality promotes your business to existing or potential clients. It provides an environment to meet clients socially, and uses the informality of a social occasion to find out more about the client's needs in relaxed atmosphere. The expectation is that you will develop or strengthen business contacts and, in turn, sell more products and services.
Corporate hospitality is envisioned as a way to help to increase customer loyalty, differentiate your business from competitors, target the best prospects (your existing customers), increase word-of-mouth recommendations, raise and maintain your business profile, and build positive relationships.
The primary pitfalls of this approach are that the policies of clients may prevent them from accepting your hospitality, and that the associated costs are considerable. Check with your accountant to see what expenses are legitimately tax-deductible—after you affirm that you can afford them in the first place.
The choice of events is almost unlimited. That the business consulting world now includes event planners is indicative of the wealth of events and activities available for entertaining colleagues and customers. The challenge is making sure the activity fits your purpose and pocketbook. Whatever you choose, put the emphasis on having fun!
A small business especially is unlikely to have the wherewithal or the inclination to entertain at lavish major spectator events such as the Super Bowl, World Series, Kentucky Derby or Indy 500 (Super Bowl tickets, for instance, are now $600 each). Within reach—and more reasonably priced—are such popular events as golf tournaments, football, basketball and baseball games, musical events, the theater, a boat ride, or a day at an amusement park.
You may want to invite existing clients to lunch, dinner, or a party. Social events for staff are more likely to be linked to a special occasion, such as a company Christmas party, New Year's Eve celebration, Fourth of July picnic, or for hitting a specific sales targets. Halloween presents another opportunity for light-hearted fun in the workplace.
Team building is often the objective of companies that host events that include multi-activity days, rock climbing, skiing, and sailing. However well intentioned, don't force employees to take part in physical activities if they don't want to. That can really damage morale. Also, try to think of innovative events that will appeal equally to men and women. It's essential that you have adequate insurance coverage, of course, just in case accidents occur. Unless they're personal friends, it's unlikely that a participation event would involve clients—save for a golf outing. Even that poses risks: Is embarrassing a client who loses in spectacular fashion worth the consequences?
Think about showing your appreciation for an employee on a special occasion, such as a wedding or birth of a child. A modest gift or card is a wonderful gesture. Or, you might want to consider an informal "family fun day" at a recreation center or park, or when a circus or special event comes to town. Celebrating a family occasion with a client is unlikely and not recommended. Save for rare exceptions, family affair are private, outside of the business relationship.
Now a fairly common corporate activity for staff members, their quality can vary. A traditional "Outward-bound" day may not be suitable for it places physical rather than mental demands on the participants. That may benefit some at the expense or embarrassment of others. Work-related simulations may be a better option, such as running a fictional business.
The key to the success of such an activity is clearly communicating its purpose to all those involved. So explain to everyone why they are doing what's planned, and that the objective is more than just having a fun day away from the office. The greatest benefits such events deliver occur from follow-up exercises and applying the lessons learned to the workplace. While team building is considered to be an employee activity, some companies and key suppliers have long histories of close relationships—close enough that their employees of both organizations enjoy and benefit handsomely from joint team-building events.
Personally organizing small-scale events, such as a staff Christmas party or a business lunch, can be an enjoyable exercise for you or for another employee. For larger events, you can turn to an event organizer—and there are legions of them eager to help. Some represent individual facilities like hotels and party centers. Others work independently with a variety of venues, suppliers, and services. A top-notch planner can arrange just about anything: food, beverages, transportation, lodging, special events, special effects, special venues, tents, audio/visual equipment—you name it. They use a wide variety of venues that range from large stately homes to small hotels, plus offbeat locations you'd never consider.
Event planners can arrange a package tailored to your needs and objectives, timetable, budget, and guest profile. Their price for services rendered is often a percentage of an event's total cost, which depends on the number of people being entertained and for how long, activities chosen, catering, and accommodations. Choose an organizer who offers an inclusive event price and be aware of hidden costs, such as staff lodging and meals. Be sure to review terms and conditions so you know what's in the small print: For example, what happens if weather forces an event to be cancelled (there is insurance for such calamities). In addition, be sure an event organizer you retain has adequate liability insurance.
Budget carefully for corporate hospitality costs. It's better to set aside money in your marketing budget at the beginning of the year rather than using whatever surplus funds may be left over at year's end. Budgeting this way also leaves an option to cut corporate hospitality altogether if there is a downturn in business. All instances of entertaining clients and staff members are legitimate business expenses and should be included in the corporate hospitality budget. These include all business lunches with existing and potential clients and events such as a staff holiday party.
Gifts are appropriate, within reason. Corporate gifts can be elements of your marketing strategy, too, whether given either to individuals or groups. They can be bestowed as goodwill gestures or serve as reminders to customers. Gifts also may be given as staff incentives or special awards. Whatever the purpose, corporate gifts should be appropriate for the event and reflect your business: a Christmas card bearing the company logo, for example, or a fun item like a pen or small notebook. It's also often a good idea to leave a reminder of your business name with a client. The gift need not be expensive but be of appropriate quality. Expensive items may convey the impression that the client is valued more highly. Understand, though, that more company policies do not allow their employees to accept gifts at all, since an extravagant item may suggest an effort to bribe an official or influence a contract. Meanwhile, federal and state tax authorities may see a corporate gift to an employee as payment in lieu of wages, or as a bonus, and tax its value. That's not much of a gift.
Arrange events well in advance and choose a suitable time, activity, and location. Don't leave it to the last minute; such delay all but guarantees a stressful experience for you and/or the organizer and often means not everyone you'd like to attend can come along.
That an employer has a responsibility to ensure its employees safety and well being at special events cannot be overstated. Make sure you take out adequate liability insurance, just in case!
Each event merits a "post mortem" or debriefing once it concludes; otherwise, it's not worth hosting at all. You can, for example, measure events' ability to generate quantifiable results, such as increased sales, customer satisfaction, or employee morale.
Here's when contacting the Internal Revenue Service is not a dreaded experience. Officials won't hesitate to discuss what they consider to be allowable business expenses. Remember, though, these most likely will be informal opinions and wouldn't hold much water if an expense were later challenged.
Kilkenny, Shannon.
Corporate Event Channel: www.corporateeventchannel.com/Reading%20Room.htm
Corporate Event Planning and Etiquette: http://entertaining.about.com/od/corporateevents/Corporate_Event_Planning_and_Etiquette.htm