New Year, New Evaluations of B2B Hospitality
Looking at how companies evaluate themselves in a B2B setting
As we turn the page into 2020, it is natural for us to look back on the year and reflect on what happened in our personal lives.
But companies that employ best practices do this too. In fact, they are often much better at it because they can quantify their success and failures with dollars and cents.
But how does this apply to business-to-business hospitality?
The hospitality industry at large is still searching for that perfect ROI model. How can you prove that hosting the decision maker at an executive dinner or football game is really what got that contract renewal? At Best.Day.Ever. we are working on some exciting algorithms that use data-science to solve that equation, but as things stand today, there is no perfect ROI tool available in the market.
So, what are the tools that companies can use to evaluate success and failures? Here are some free tricks of the trade for event managers and their financial team counterparts to measure the year that was…
1) Start with the Spend
Like any other investment, from a marketing campaign to a purchasing property, start your evaluation by looking at the cost.
For events, there are multiple components to include in your spend evaluation. Consider the event process from start to finish… the venue or facility rental, food and beverage costs, transportation, hotel and lodging accommodations, marketing spend, production costs, ground staff, and other line items should all be included.
Some evaluations might consider including the time that full-time staff spent working on this project and incorporate a prorated number from their total compensation package. The level of granularity you provide really varies from organization to organization (and sometimes year to year), but best practices is to be as comprehensive as possible while maintaining accuracy and an ability to articulate simply.
2) Analyze Company-wide Progress Towards Non-Financial KPIs
Every event that has even $1 of spend on it should be implemented with a strategy designed to achieve a predetermined set of KPIs that drive momentum company-wide.
Whether the goal is cutting employee attrition, contributions toward philanthropic missions, a certain allocation being used for executives and their families, all these uses have impact that is difficult to measure in financial terms. However, one can easily provide anecdotal – and sometimes quantitative – figures to shine light on these uses.
For example, one might look at the number of employees that left on their own terms year-over-year against the number of tickets provided to employees considered to be at-risk (defined as having been with the company more than 12 months but less than six years for instance). Looking at these trends over a long index can provide true context in the value of internal corporate hospitality as it pertains to cutting employee attrition.
3) Measure the Financial Impact
This is where it gets very interesting. Every organization has their favorite financial equations to use when tracking growth. Some prefer to just analyze top line revenue because they are either in hyper-growth mode or they understand their margins so well they know the value of each dollar on the top line. Others are inclined to look at metrics closer to the bottom line such as gross profit, EBIDTA, and net income. And others still care about more less common equations – such as debt to equity or cash ratio.
Whatever the metric you use, it is important to predefine it so that it can be tracked with frequency during the calendar year. Without bench-marking data, you are left with an aggregate pool and may have a difficult time showing how key events in your hospitality campaigns impacted your equations in any material way.
Best.Day.Ever. loves getting into the weeds on these items. We make it a point to work with business leaders to understand their areas of growth and which KPIs they prefer to measure those opportunities, then create strategic hospitality programming to drive performance. It is a maniacal sense of tracking incremental progress on these predetermined KPIs that separates a Best.Day.Ever. report from the rest of the industry. Incremental is a key word here, as hospitality tends to effect relationships in short spurts (for more information, read our blog on diminishing returns).
It is not easy work, but with the right preparation, teamwork, and dedication to tracking results, 2020 can be a year in which hospitality becomes a bigger part of your customer acquisition and retention strategies.