Expense accounts and entertainment budgets are always a part of a balancing act for sales organizations. New and existing customers are being bombarded by sellers to go to parties, concerts, sporting events, dinners and trips. Salespeople are expected to ‘wine and dine’ their clients. Sales management is always being pressured to keep an ‘eye on expenses’ by their own senior management as well as the CFO’s. And, when sales goals are not being met, what is the first thing to get scrutinized and cut? Entertainment expenses.
What are some best practices for customer entertainment?
Align sales management and sales team on ground rules
I believe it is critical that both management and sales have transparency and agreement on what is the amount of the expense budget. Too often, the actual expense budget is kept vague…which, of course, makes it very difficult to manage to a number. My experience has been, as both a salesperson and a sales manager, that if the number is well known then the sales team will be responsible and keep within budget. As a sales manager, I want to trust the sales team to behave like adults and view the company expense budget as if it were their own personal expense budget. I believe that it is always better to trust a salesperson on the team unless, or until, they prove otherwise.
You might think that common sense would always prevail in regard to etiquette but sometimes somebody really screws up…let me describe such a situation. The most egregious example that I saw was at a business networking event that I had helped organize. This event was honoring a well-known buyer and it was an opportunity for sellers to introduce themselves and make a connection. Unfortunately, one over-zealous seller proceeded to pull out their iPad and begin to give a presentation to the surprised buyer while they were standing at the bar. Yes, a seller actually walking through a deck next to drinks, bottles, and mixed nuts. Needless to say, I went and rescued the shocked buyer immediately upon seeing this and apologized for the rudeness of the seller. Here are some basic entertainment etiquette ideas that have worked for me:
- Do not give any kind of a presentation at a social event or when entertaining clients
- Let the client bring up business…they will do so 99% of the time as they know that they are being entertained for business reasons
- Treat the customer as though they were a guest at your home…would you try and sell a guest something?
- The purpose of business entertainment is to get to know your customer in a casual social setting as opposed to facing each other across a desk…treat it that way
The number of different entertainment options available to a salesperson is often determined by the location of the customer. A larger metropolitan area could have a greater quantity of entertainment options…whether it be restaurants, concerts, or sporting events. But, even in a smaller metropolitan area, the quality of entertainment options can be equal to, or greater, than those of a big city. And that’s my point in this…try to think about something unique or different that you could do with a single customer, or a customer team. Here are some unique entertainment ideas:
- Think about ‘experiential’ entertaining ideas
- Participatory sports (golf, tennis, hiking, horseback riding, etc.)
- Cooking classes or wine tastings (or craft beer/bourbon, etc.)
- Performance driving classes on local raceways (not after the wine tasting!)
- Family entertaining ideas (everyone wants to spend more time with their family)
- Set up dinners and/or events with you and your customers’ and their significant others
- Consider events where your customer could bring their children
- Exclusive opportunities
- Access to private clubs or exclusive events
- ‘Behind-the-scenes’ at music or sporting events
As I mentioned earlier, it is very important for sales management and the sales team to be on the same page as to entertainment expenses. If you, as a salesperson, have a ‘great’ idea for a customer event and you’ve got this nagging feeling it might be too expensive, you definitely want to run it by your manager. Be prepared to think and discuss why the extra expense is worth the cost. Would it be better to add more customers to get more mileage on the expense cost? Would it be better to add another salesperson from your team to the event you are planning so they could include their customers, too? Remember, you need to treat company expenses as if they were your own personal expenses…and, particularly when sales goals are not being reached, think carefully about how you are entertaining your customers. I would never advocate a complete shutting off of entertaining but I would encourage the sales team to be smart about who and where they are entertaining.
Finally, when entertaining, always make sure to have your credit card with you and some cash, or a digital wallet, as a backup…I learned that the hard way as a new salesperson!