How to make the most of a hospitality budget

Are you using you customer event budget right?

At the start of 2020, whilst I was in a previous role, I was talking to a Customer Success Director on my team and he was telling me about a fantastic hospitality event that he had just run for our UK customer base. It was the first and (although we didnt know it yet) last face to face event that we'd have that year. 

As a Customer Success Group we were very grateful for the hospitality budget that we had and what we were able to do with it. I know it wasnt easy to get or keep and sort of budget. We'd been working with Marketing for the last few years and although they didnt have a "Customer Marketing" function (their role was all about bringing in leads) they had kindly offered to help us spend our modest budget on various things across the years. We'd had run golf afternoons, wine tasting sessions and I seem to recall a day trip on a boat in there somewhere. We would mix these events up and have them in different places, sometimes after another event like Salesforce World Tour, and sometimes we'd just run them independently. 

This particular event run by our CS Director had been a trip to watch some rugby. Anyone that knows me knows Im not a huge sports fan, but I am pretty certain that a premium box with table service from a celebrity chef is a pretty fancy experience. I remember looking at some of the photos and wishing I'd been able to find the time to go too, it looked like a brilliant day. I also recognised some of the faces of people attending too, which as the exec owner of the customer base I suppose was a good thing, I have to know my customers, right? 

In fact, I recognised quite a few customers there and that got me thinking. How had we decided who would attend this event? What was our decision making criteria on whether you would get an invite or not? When I talk to marketing about the pre-sale events that they run (side note, their budget was always higher than ours to impress potential clients!) they would tell me anyone with an open opportunity is a win to get to one of their events. They are influencing pipeline that way. Could the same be true for Customer Success? Could we claim that anyone attending will reach a renewal at some point so we are simply influencing the renewal? That feels too easy an answer for me and if we are honest with ourselves we likely have the same people attending the events each time, and whilst its great to keep building on those relationships, its not being very purposeful or efficient with our budget. It was time to think about a plan.

After some discussions with our CS team about what they would like to see from these customers attending, and with discussions with marketing and sales, we were able to come up with 4 groups of people to invite for future events:

1. Customers near a renewal/at risk of churn: Obviously the work towards a renewal starts on the day the contract is signed, but at some point in the coming months/years we start our renewal plan. We work with our champions and reiterate the value we've been proving in our QBRs/EBRs. If we think that the customer is a churn risk we consider what reasons they might have to leave. We can use an event to talk to our customer in a more informal setting, outside of the contract negotiations to understand them and their drives. Hopefully they'll also have a good time and remember how much they like us too. 
2. If there is an upsell on the horizon: One of the reasons I loved being able to bring upsell customers to our event is that Marketing are able to release a little of their budget for the event too, because this is driving deal revenue. And for the same reason as the first group, it allows us to engage with the stakeholder or decision maker in an informal setting, to understand what they are trying to achieve themselves and how we can help with that.
3. We want them to be a customer reference: This is where we use the event as a treat or reward to our champion customers who are always willing to speak to a prospect, or are happy to write up their journey in a press release or define their success in a white paper. Or maybe they arent a reference yet, but we want to ask them to be. Its wonderful to be able to take these customers out to say thank you.
4. Where we want to build a better relationship. The benefits of the first three group are still true even if there is no upsell, reference or renewal. Its still an opportunity to form      relationships outside of the QBR/Office setting. Its time to understand your clients a little more personally so that you can work with the better in the future. Its nice to be able to treat them and say thanks for being a customer.

It could be argued that some of these are more valuable reasons than the other or that they are all balanced. I tend to see group 4 as a bit of a catch all at the end. What is really important though is that we consider these groups when booking events and dont just bring along a whole set of customers from group 4. We want to spread the invites across these groups evenly to start with, and of course when people cancel/drop out we might fill with others but the intention is to be purposeful with the planning. 

And the follow up. Just like marketing needs to justify its budget spend based on its influence on pipeline, CS should be able to justify its hospitality budget based on its influence to these 4 groups. How many of the people from group 3 went on to take a customer reference call after the event? Does our upsell success rate increase in the customer base that attends? Are our churn save rates better? 

Of course there will always be a "chicken and egg" element to be debated. Did we bring along our more successful customers/less likely to churn customers etc. But thats why this is a great thing to do. It encourages us to think about it, to debate metrics to use for success, methods to improve and be more efficient. It forces us to be purposeful with our spend and (with a healthy dose of luck) it gives a decent proposition to increase the budget for next year. 

2020 obviously turned out to be a crazy year for many reasons and stopped us being able to implement this for our in person events and completely change our plans in regards to spend and customers. But we have a solid plan and as we move through 2021 and start to see people face to face again, I encourage everyone to consider how they can make sure their CS hospitality spend is being used.