Have Your Cake And Eat It, Too | Promotional Consultant

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Have Your Cake And Eat It, Too
By: Lisa Horn, CAS
Issue: June 2010

Entertaining clients should be an engaging experience that is the perfect recipe of thoughtfulness, creativity and fun—all without breaking the budget.

In today’s economy, unlimited expense accounts are nonexistent, and extravagant meals at five-star restaurants may leave your clients wondering where their dollars actually go.

While old-school “wining and dining” has made its way into the annals with the three martini lunch, it doesn’t mean that engaging clients outside traditional business meetings isn’t an integral part of today’s business operations. It can be done—and on a budget—with thoughtfulness, creativity and a splash of fun.

Making The Decision
With the economy—and most businesses—still on the rebound, is it reasonable, even necessary, to entertain clients?

“Entertaining in today’s marketplace is just as important as it ever was before, it’s just changed into different ways,” says Mark Shinn, MAS, president of Newcastle, Washington-based rep firm Incentives West (UPIC: IDEAWEST). While the company has maintained a consistent percentage dedicated to its entertainment budget, he says monies have moved away from traditional entertaining and more toward providing financial sponsorships for regional association events or bringing refreshments to lunch-and-learn education seminars.

Dan Collins, COO of San Diego, California-based AddVenture Products (UPIC: COMPREST) echoes the same sentiment and says that “entertain” may not be the right word. However, the need to engage clients on a personal level remains of upmost importance in both good times and bad.

“In difficult circumstances, customers tend to either look more closely at the cost or they commoditize the transaction rather than evaluating the risk/reward and relationship factors,” he says. “This act, by its very nature, requires all of us to reinforce the very reasons why customers choose our business over others. This means consistent and close communication and, yes, sometimes lunch, dinner or a shared entertainment venue.”

For those still traditionally entertaining, it’s not as extensive as in the past. “I have been to dinners with more than 20 reps before, but this happens less and less today,” says Amanda Nannini, California sales manager for Largo, Florida-based Hit Promotional Products (UPIC: HITP0001). “I suppose it has to do with the economy, but I actually prefer that it’s only three or four people. With bigger groups, it’s not possible to get the quality time you need to form any kind of relationship.”

Determining The Guest List
Since everyone has felt the crunch of the recession, most clients understand cost-cutting measures. While there’s always the one person who tries to take advantage of the situation, most have altered their entertainment expectations.

When deciding if you’re going to entertain clients, how do you determine when it is appropriate? “For us, it’s all about current, active customers as well as those that have shown the most promise in the past,” Shinn says. “Very rarely will we commit entertainment dollars for new or unproven companies.”

Regardless of economic conditions, Collins recommends doing a quick ROI analysis combined with an ongoing competitive analysis that evaluates how your company can provide better service, price and product without reducing margins and profitability.

“The cost of acquiring a new client and subsequently building and maintaining the relationship should include face-to-face visits and entertaining,” Collins says. “The challenge is that sometimes you expend these costs prior to seeing the return on investment. When this occurs, it is essential to maintain strict guidelines and timelines to recoup the costs and turn them into profits. If this doesn’t happen, move on and next time spend the allocated funds elsewhere.”

However, Nannini says not to base decisions solely on the numbers. “Sometimes the B accounts can become an A+ if there’s a good fit,” she says. “They might not have ordered in the past because they didn’t know enough about you, your company or the products and services you offer.”

Choosing The Venue
Tradeshows continue to be one of the most popular and effective means of having face time with clients, and they are a natural fit for planning an evening of entertainment.

At The SAAC Show in Long Beach, California, Incentives West hosts an annual dinner for distributor clients and splits the costs with its supplier partners. “This event is a win-win for all of us, as it allows some of our top clients to meet our suppliers, as they may only travel to the west coast once a year for the tradeshow,” says Shinn.

And it’s no surprise much entertaining occurs around the PPAI Expo in Las Vegas. “AddVenture has found that the annual expenses we allocate to the PPAI Expo have a clear return on investment,” Collins says. “Throughout the years, there are numerous examples of when our preferred account executives initially worked with clients electronically or by phone and then cemented lifelong business and personal relationships with these individuals after meeting personally, away from the show floor, in the city that never sleeps.”

But a large event isn’t necessary for meaningful entertaining to occur. Kevin Flynn, CAS, director of sales for Chicago, Illinois-based TBK Promotions, Inc. (UPIC: tbkpromo), has had much success when an annual client lunch grew into much more.

“I do a large chunk of business with a college student group, and one of my goals was to get into their heads to gain mind share that would hopefully translate into more orders,” he says. “I scheduled annual luncheons where the students and I could enjoy a meal and talk about school, events and their progress. I really got to know these students well, and I heard great success stories as well as failures. I also learned how to help them better market their programs and track their success and failures through a planning guide.

“After a few years, I became an integral part of their purchase planning and budgeting process, which allowed me to give them information about the products that worked and why they were successful,” Flynn continues. “It worked like a charm. Not only did the annual purchases increase, but also the initial group of students has since graduated and entered the workforce and three of the 10 are still my clients today.”

Having Fun
And while ROI is important to making entertainment decisions, don’t forget that entertaining clients is supposed to be fun. Know your audience and plan entertainment that has value to them, but keep in mind what is valuable doesn’t always have to be expensive. Thoughtfulness and creativity go a long way.

Select venues where everyone will have a good time in an environment that meshes with your business values. “If you are going out to eat, try to stick to a place with variety on the menu,” Nannini recommends. “Ask the clients if they have a preference or a food they dislike so you don’t end up at a steakhouse with a bunch of vegetarians. And, this should be client entertaining 101, but watch the liquor. It’s okay to have a social glass or two of wine and have fun, but know your audience.”

Good conversation is often a mark of a successful evening, and preparing some things to talk about prior to the event is helpful if you’re not naturally talkative or if this is the first time you’re meeting the invited guests. Find out what they like so you can ask questions. What interests do they list on their LinkedIn profile or Facebook page? Does anyone attending write a blog or tweet? Do your homework so you can engage with your guests easily.

“And, most importantly, be yourself when entertaining clients,” Collins says. “Don't make it a sales pitch. Do the sales pitch in a business environment then cement your relationship in a setting that is entertaining. By making business propositions first, you can then strengthen them with shared interests.”

Finally, don’t expect that entertainment alone will increase revenues and strengthen friendships. It is simply one tool in your arsenal to win and keep business. Just as many ingredients are used to bake a cake, many facets—from the products you deliver to the service you provide—go into creating strong bonds with clients. Entertaining is just the icing. Delicious.

Lisa Horn, CAS, is president of Irving, Texas-based Spark!, a boutique strategic communications agency that helps suppliers, distributors and other promotional products organizations build their brands, position themselves in the marketplace and get the publicity they desire. A 16-year industry veteran and former editor of PPB magazine, she is a frequent contributor to Promotional Consultant magazine.