The Benefits of Entertaining Clients
Entertaining clients with corporate hospitality is seen by critics purely as an expense; but it should instead be seen as an investment in the capstone of any business – the clients.
The popular perception of client hospitality is of lobster canapés served with champagne in an extravagant executive box. However hospitality needn’t cost the Earth and there are many options available to suit a range of budgets, whether this is entertaining at a major event, a more participative experience or something completely different.
For any firm considering an investment, it’s the bottom line which is the crux. Yes client hospitality requires an investment but with the many benefits it provides, it offers an excellent return on investment.
Here are 7 good reasons why business of any size can really benefit from entertaining clients.
1. A More Informal Setting
We all know that it’s good to get out of the office freeing the mind from the four walls of the workplace away from the pressures of everyday work. Client Hospitality days out are all about getting your key clients or prospective clients out of the office into a more relaxed and informal setting.
Here they will be less mindful of the other pressures of work and free to focus on their relationship with you.
A more informal setting also allows you to build a far more personal relationship with a client. Business relations are about more than just the balance sheet; all clients however hard-nosed they appear are human and will be influenced by personal relationships. What’s more, the importance of trust and understanding make personal relationships vital at any level of business.
2. Making a Great First Impression
Entertaining at corporate events is about far more than showing a client a good time. It is a chance to demonstrate your commitment to them as a client and your ability to deliver and to impress.
Businesses relationships are founded on personal relationships and if you are meeting clients face-to-face for the first time, client hospitality provides a more informal setting in which it is easier to get to know clients on a personal level.
3. Nurturing Relationships
Client hospitality is a highly effective way to take a relationship with a client to the next level. Preserving business with existing clients is far less costly than the cost of attracting new clients to replace those who take their business elsewhere.
Furthermore, clients with a stronger relationship with their suppliers are proven to spend more and are also more likely to become an advocate of a firm. Word of mouth is the cheapest and most trusted form of promotion.
4. Maintaining Relationships
In a competitive industry no business can afford to be complacent when it comes to supplier relationships; especially as business becomes increasingly global. Special relationships with a client will wither if not nurtured. While clients are attracted by a value proposal, relationships provide a significant advantage when it comes to retention.
The cost of corporate hospitality pales in comparison to the lifetime value of a key client. Entertaining a client demonstrates your continued commitment to the relationship and signifies their continuing special status to your business. It is also the perfect gesture to thank a client for their loyalty.
5. Differentiating Your Business from the Competition
Even with existing clients it is still important to differentiate yourself as the competition are always ready to offer an alternative should your client’s loyalty wane. With price and service provision becoming increasingly homogenised, there is no better way to differentiate your business in the mind of a client than by creating a lasting memory. The experience of first class client entertainment or corporate hospitality is a fantastic way to do this.
Furthermore client hospitality is an opportunity to differentiate your business in terms of commitment, personality, going the extra mile; or for a more established client, demonstrating how well you understand them by hosting the perfect event.
6. Networking Opportunities
It’s not what you know… it’s who you know that really makes the business world go around. At a professional event you will not only have chance to mix and mingle with your own important clients but you’ll also have the opportunity to meet like minded individuals and businesses that may provide you with new and important relationships. The informal setting provides an excellent opportunity to establish new relationships and an enjoyable event provides a memorable way to meet new contacts that will help cement the bonds of a potential relationship.
7. Entertaining Key Staff
Although hospitality is most often associated with client entertainment, all of its principal benefits can be equally applied to an organisations key staff. The knowledge, skills and understanding that experienced staff have of a business as well as their relationships with colleagues and clients means that it is far more cost effective than to invest in staff retention than to spend time and resources on recruiting and training replacements. Corporate hospitality is an excellent way to thank them for their loyalty and to differentiate the business from other potential employers.
It is also an excellent way to strengthen bonds of personnel with a business and with each other which in turn has valuable benefits for morale, motivation and teamwork.