Sales people, lets face it, spend a lot of time in their cars. Skype, email, conference calls and all the paraphernalia IT can assemble cannot overcome the fact that people buy from people. Which means face to face. Which means driving.
I used to work at a senior level in marketing for a company employing 3,000 people, most of them resolutely not sales people. Yet the company spent £1 million a year on fuel. That is a lot of motorway ploughing.
This is all relevant because most companies spend less than 1% of that fuel bill on corporate events. On prospect entertaining. Since the sales team has bought into face to face selling and the finance department condones the resulting fuel costs, why is a major weapon in the face to face sell so overlooked?
The Main Event
Here’s the spoiler: events work. They may not always work, but don’t blame the ship when the captain runs it aground. Corporate entertaining is about engagement and building relationships. Plan an event well, brief guests well, structure the event careful around your objectives and they work. We run classic car events, which put suppliers and prospects together over a 7 hour day in one-to-one situations in cars. We vary the format but the principle is the same: getting to know each other. Engaging.
How businesses budget
If events work, why are they such a small part of the business promotional spend? The answer seems to lie in how businesses budget. Most companies still budget using a historic analysis model. They look at year X, conclude spend A delivered sales B creating profit C and look at how to tweak that for year Y. Obviously this is sensible (if a little hard to follow). But what it does is carry forward unchallenged a set of assumptions. In the case of fuel and events this puts the former as a largely fixed, unavoidable cost that is subject to minor changes, and events as a discretionary cost whose size is determine by the larger ‘fixed’ costs like fuel. Put simply, this approach assumes driving around Must Happen but events Might Not.
This arrangement also means that events compete with other marketing or sale activities for budget. Having run such budgets I know it comes pretty low down the list of priorities. Often events don’t feature in the sales calendar at all.
The problem with events is not whether they work, but how they are perceived. Spending £1m on fuel is ok because it involves work. Advertising, PR, exhibitions and all the other weapons in a marketeer’s armoury happen without question but events never slide through quite so easily. A lot of this has to do with the fact that prospect events are usually called corporate entertaining. Entertainment, scowl the suits in Finance, isn’t work. Ergo, why are we doing it? Consequently, it takes a plucky sales director or marketing bod to pipe up and recommend increasing the event spend. Yet logic says that this is exactly what they should do.
The Sales Arc The arc of a sale is well documented: you attract attention, you generate interest, you engage, you persuade, you sell. In the history of flogging stuff nobody has found a better or more robust process than that one. Corporate events fit neatly into that sequence because they engage. They build relationships and engage individuals in a way that sitting around a table after a long drive simply doesn’t. But many companies base their sales strategy on attention, interest and persuasion. They may not overlook engagement but it receives less attention: they assume that the sheer brilliance of their product or service will do the job for them. But cold, hard facts are only part of the engagement process: to balance the rational you need to appeal to the emotional. People buy from people. If you want to prise open the sales door, to wedge your foot between door and frame, you usually need something more than rational persuasion.
If you want to get to know your prospects, get them out the office: it’s a simple and proven rule. Engagement must come before persuasion. By overlooking a key tool in the sales armoury, namely corporate events, companies are making the process of persuasion and conversion harder and slower. Without something like a corporate event it is extremely difficult to get to know and engage customers. This not only delays the decision and persuasion process but also weakens the ongoing relationship. Once a customer is a customer things will go wrong. Competitors will start snooping. Salespeople want sticky customers who will weather the vicissitudes of business relationships. Getting to know them, spending time with them, makes customers sticky.
Until events are seen more as corporate engagement rather than corporate entertaining, the events sector will face an uphill struggle. I know from experience how hard it is to sell events spending to peers and employers. It can be hard to quantify the result and, if poorly managed, can easily descend into an expensive jolly. At a time of belt tightening nobody wants to be seen to be endorsing frivolity.
Yet there is nothing frivolous about an activity that plays a clear and essential role in the sales process. If sales and marketing budgets were created by dissecting selling into its constituent parts then corporate events would be more frequent and better respected.
At Great Escape Cars we’re involved in a small corner of corporate events but, having been a customer and supplier in the sector, I know how effective events are. Because without engagement selling stumbles, and few tools deliver engagement like informal, relaxing time with prospects.
Great Escape Cars operates a fleet of 50+ classic hire cars and runs corporate driving days for large and small groups across the UK.