Corporate event planners are not supporting ‘fam trips’ and educationals like they used to and suppliers are finding it harder and harder to show what they’ve got. Are we seeing the end of funded site visits as a way to showcase venues and destinations?
It used to be standard promotional practice to invite corporate event buyers on fam trips several times a year. After all, how else can you recommend a destination or hotel to your budget-holders if you’ve never been there? But since the 2009 recession persuading buyers to go on educationals has been very hard work…and getting harder. More recently, several overseas fam trips have been cancelled due to lack of take up by corporates. This is not because the destinations were unattractive, far from it. But there’s clearly something going on here.
Pre-2009, you would e-shot a database of 1,000 known and active overseas event buyers and get about three per cent expressing firm interest in attending a fam trip, so that’s 30 potential delegates. Through a weeding process of qualifying the leads, you would probably end up with 15 who were bona fide invitees. Come departure day this may further dwindle to say eight, due to various other business commitments which may intervene. With two hosts that’s all well and good as a commercial exercise.
In early 2013 FMI, emailed around 2,000 qualified corporate buyers with the offer of a fam trip to an attractive Southern European destination for three days. Time was when we get 50 or so positive replies. We had just one enquiry…from a PR contact. We cancelled the trip.
Reasons to be doubtful
For corporate event organisers the Bribery Act, 2010 is certainly one reason. Although we all now know…or should know…that fam trips are not illegal, the lawyers have made such a good job of crying foul in terms of ‘inappropriate and undue influence’ that many corporates have been advised by their bosses not to attend them. In the FT in June it was reported that corporate hospitality in the Square Mile was on the wane: ‘Several bankers said widespread client entertaining was no longer the norm and had been replaced by internal, low-key festivity.’
The internet has also played its part. Thanks to corporate spam screening and other security devices actual openings for general broadcast messages has dropped to below 10 per cent. So 90 per cent of any outgoing messages never actually reach their intended targets. Using the statistics from pre-2009, in effect, you are mailing only 100 people from a database of 1,000. At a three per cent response that’s just three potential delegates for your fam trip…which is not enough for it to be worth running. You may say, well, just mail more prospects then. I believe there are no more than say 2,000 serious overseas event buyers in the UK. So, simply mailing more people is not going to cut it. You just get more people who need to be weeded out.
Feedback on educationals supplied by a respected and well-established, global destination representation company for 2013 showed that getting corporates or agencies to attend is getting harder: ‘We used to do in the region of twenty educational/study tours per year (10-12 pax per event). These days with less flights available and less destinations able to fund the flights cost, the airport taxes make the net cost too much for most buyers to consider. We have therefore reduced the numbers we do currently by half.’
Hotel groups have not fared much better with educationals and tend to do bigger but more targeted events. A leading international hotel chain reported: ‘We do two or three events a year and get about 50 prospects to attend specific properties with a very hi-spec programme including airfares. Because we spend so much time and effort qualifying the guests we get about 70 per cent take-up. We tend to concentrate on just say 300 key accounts as most of our business comes from them. In terms of ROI we track sales over two years and longer. We worked out recently that we recorded $1.5m of revenue across 20 key clients for a prospecting spend of around $200,000, so we do watch the pennies on these events very closely.’
What’s to be done?
Destinations have not suddenly become unattractive. If anything, they have become better-serviced, more professional and more slick, in the main. Destinations need to somehow make it morally and commercially acceptable again for corporates to go on fam trips.
One way to do this is to charge a proper amount for the event to defray reasonable costs. But it needs to be in the region of say £350 not the £25 registration fee that has often been tried. Such a cost is equivalent to a ‘training cost’ and would be discussed by the corporate’s manager with some assessment made as to its approval or otherwise. This then lifts the activity out of the shady corridors of a perk and into the people development category of expenditure. A pan-European DMC already has this policy: ’If we put together high end programs and use less known destinations like the North of Spain (Bilbao and Basque Country) and we charge around 300€, we get better qualified delegates. We normally refund the 300€ if they confirm a group at the destination visited within the first year.’
Another method may be to compile a register of UK professional corporate event buyers for which they pay a membership fee, say £100 per annum. The £100 would pay for the admin cost of checking up on the applicants to vet them before any fam trips are offered. Destinations can then place their fam trip on a central calendar and potential delegates would apply to join the event, on a first-come, first-served basis, with details of the event they are researching for?
A further idea could be a seminar-based fam trip where several complementary suppliers put together a formal training event which is half classroom/half site visit. A fee would be charged. No-one gets to go for free. This depends on no-one breaking rank and doing stuff for free, which is always possible.
But what about UK-based receptions and dinners? When an exhibition is in Town there is often a flurry of hospitality events, where the invitations are very loose with little or no care taken to qualify the guests.
I would guess though that a significant proportion of the attendees go for the free food/drink and have little or no interest in the destinations being promoted. What’s worse many hosts often do not introduce themselves or provide any technical information for coming. The strange ‘metro’ trend of not offering data because ‘it’s a social event’ no longer washes with truly professional buyers. It’s a marketing exercise, so do some marketing!
While we are on the subject of product information, more ‘speed-dating’ events are not the answer. Bludgeoning the corporate buyer with twenty venues within a few hours flies in the face of sound learning theory and effective business development.
It all gives the events industry a bad name in the eyes of internal corporate colleagues who see such activities as wasting their employees’ time. One way to change perceptions of such events is to morph them into information sessions with a drink or dinner at the end. We really must stop thinking that just providing posh cocktails and canapes to 20-somethings or three-star restaurant meals to directors is going to make a blind bit of difference to their perception of your destination. It won’t…and they are probably the wrong prospects anyway.
So, the job is to make going on fam trips acceptable again to corporate event buyers as a training exercise. It’s a tough one. Every marketer knows that changing perceptions and behaviour is the most difficult of all promotional tasks. But it would be nice to see someone big have a go for the good of all.
