BY EDWINA STORIE
Once a few dinners would suffice, but these days corporate hospitality has grown into an industry of its own, and sporting events are being capitalised on as the dream event to woo clients and win deals.
Corporate hospitality isn’t what it used to be. A decade ago, it was reason enough to brand an event and give away a fistful of complimentary tickets to favourite clients. But with tighter budgets and a greater focus on corporate spending, the investment in corporate hospitality at sporting events is growing into one of the most popular forms of client entertainment, moving from a simple branding exercise into a tailored event where clients and businesses get to know each other beyond the boardroom.
In the 70s, before corporate hospitality developed into the industry it is today, it was all about fine wine and four-course meals (prawn cocktails and beef wellington anyone?). The economic boom of the 80s and 90s saw businesses tag onto sporting events to boast the best corporate box and gain greater brand awareness.
In the past few years, corporate hospitality has evolved to extravagant proportions, often including meet-and-greets with sporting stars, whole event branding, fine meals, and even elaborate holidays.
Today, corporate hospitality is a calculated marketing strategy with a strong focus on return on investment, better global and national branding, and satisfying what some claim to be is a trend in individualism. Corporations are now using sporting events as leverage into once-in-a-lifetime experiences for clients and where both parties can enjoy informal networking time to engage in business. Indeed, engagement is the new key to experiential hospitality, with sporting events becoming an opportunity to both woo clients and market to consumers.
After that little blip on the radar known as the global financial crisis, investment in corporate hospitality is said to have made a full recovery. The Australian quoted statistics by Sponsorship Australia and sports marketing researchers Repucom that 21.7 per cent of 2010 marketing budgets were allocated to corporate sponsorship.
National board member of Sponsorship Australia, Miranda Grace, told micenet that while recently there hasn’t been any further significant increases in sponsorship, what has changed are the expectations and delivery of events.
“This is a result of more competitive offerings and rights holders or sponsors wanting to leave a more prominent impression,” Ms Grace said.
What she also made perfectly clear was that “the experience of corporate hospitality can be extremely successful.”
In an interview with The Australian, former chief executive of The Victoria Racing Club, Dale Monteith, agreed that companies are now a lot more strategic in their spending.
“Ten years ago it was the races people were interested in. Now it’s more about sponsorship, brand alignments and partnerships leveraging off our brand. It’s about managing the customer base and leverage. We know that over the four days [of the Melbourne Cup carnival] 75 per cent of the people who come do so for things other than racing,” Mr Montieth said.
Soundos Hanna, director of one of the most successful Australian corporate hospitality companies, Octane Events, says so many companies put money into sporting-related events because of the country’s passion for competition.
“It fits their target market perfectly,” she told micenet.
“People have realised they can do more with their brand at these events rather than just coming in and sitting down. It’s contributing to brand awareness which isn’t necessarily television – it could be anything customer-based.”
She says the most important element to companies when she is organising a motorsport-related event, for example, is having the best position on the track or being perched right above the pit lane garage.
“The biggest thing they want to do is feel as though they’re part of the team. The drivers will come up to meet guests, or the guests will go downstairs [for a track-level experience], and that’s the important thing for the company – the interaction with the team and the drivers.”
One of Ms Hanna’s clients, online security provider Symantec, sponsors the V8 Supercar Norton 360 Racing Nissan Altima. 2013 will be the sixth consecutive year the company has sponsored V8 Supercars, identifying that the sport has a long heritage of passionate fans who fit with the product’s target customer. The company uses motorsport race weekends to build relationships in a comfortable and informal environment away from the boardroom.
Symantec’s senior consumer marketing manager, Trudie Wood, says the company entertains its clients by hosting a private suite above the pit garages, or in the race team facility at V8 races around the country. The tickets often include grid walks and visits from the company-sponsored drivers to give the guests an exclusive behind-the-scenes experience.
“Our customers feel the thrill of watching the action at close quarters to the race teams – all the sights, sounds, smells of motorsport. There have been many times we have invited business partners not interested in motorsport who get caught up in the excitement of the on-track action and become avid followers of our sponsored team and the sport itself. It’s always more fun if you feel ownership of a team – and we’re thrilled if our partners feel part of ours.”
Sponsorship Australia’s Miranda Grace says ensuring attendees are made to feel like VIPs is the most important element of corporate hospitality.
“[Businesses want to ensure] their clients walk away with a positive experience. Will the word of mouth enhance the brand or create opportunity? There is an air of exclusivity with all corporate hospitality and this ‘celebrity’ feeling is still very important in both professional and social circles.”
Pennies in the bank
When hosting such elaborate experiences, the focus for the corporate company is on ROI, Ms Grace adds.
Symantec’s Trudie Wood says the key outcomes for the company hosting channel partners at motorsport events are the ability to build stronger relationships in less formal environments, and to provide special reward experiences for end-users.
“Our motorsport sponsorship enables us to help educate people about new online threats and how they can protect the stuff that matters to them, whether they’re using a computer, tablet or smartphone, in a fun and engaging way.”
Octane Events’ Soundos Hanna says while it is hard to measure ROI on corporate hospitality programs, the deals that a company does before and after are calculated.
“[These companies are] dealing with their invitees on an ongoing basis so the loyalty from these guests brings them new business, and renewable business which is the ROI.”
Dynapack, manufacturers of compaction and paving equipment, treats its clients to the State of Origin series in Sydney and Brisbane, and the AFL in Victoria and Western Australia. National product manager Steven Stavrou explains that the experiences create a sense of loyalty in its customers.
“That loyalty goes a long way,” Mr Stavrou told micenet.
“When the deal’s down to you and your competitor and they haven’t necessarily spent the social time with that customer the deal tends to go in your favour.”
The company spends “a significant amount” of its marketing budget on corporate hospitality not only at sporting events, but factory visits, trips and dinners. Mr Stavrou says it is seen as an integral part of the company’s marketing and would have detrimental effect on the overall business turnover if it were to be decreased.
“A lot of our business comes from major accounts where we have built loyalty through things like sporting events and corporate functions, and the way we measure it is how much those major accounts in turn pass on their business, and what percentage of their business they give to us.
“You get to have the customer interaction with them and not always have to talk about work or the deal. You can talk about other things that you have in common.”
Up there, Cazaly Hawthorn Football Club’s corporate sales executive, Chris Tomlinson says businesses should spend time thoroughly planning their hospitality strategies.
“Invest time in inviting the right people to the right event,” Mr Tomlinson says.
“Work out what your guests’ business equals in dollars and put a percentage of that back into corporate hospitality. And always review after the event to ensure you have made the most of it.”
And as companies continue to refine their spending strategies in corporate hospitality, the industry should continue to expand.
Octane Event’s Ms Hanna says she is only seeing growth in the industry as opportunities for branding exposure, client interaction and company investment increase.
“Corporate companies still need to entertain. They still want to hold on to their current clientele, and I’ve found that they are doing more, but streamlining better.”