Trying to teach salespeople about the importance of customer relationships is a bit like teaching a gym instructor the importance of fitness. In short, any salesperson worth their salt understands the power of relationships with prospects and customers.
But how important is face time to building those essential relationships? Concur asked the experts – 150 sales executives working in SMEs across Europe – and a whopping 95 per cent agreed that meeting customers and partners face-to-face was ‘vital’. Worryingly though, 77 per cent of sales executives acknowledged that the tough economic climate had prompted their small business to take a more cautious approach to spending on business travel and client entertainment over the past few years.
This begs the question; are cuts to travel and entertainment budgets negatively impacting the performance of sales teams within UK SMEs?
The findings indicate the answer might just be ‘yes’, with 67 per cent of sales executives in UK SMEs agreeing that if they were permitted to travel to visit customers and prospects more regularly, they would be able to drive more sales. Furthermore, 35 per cent of these executives said that greater freedom and autonomy on where and how to spend their business travel and expense budget would lead to a significant improvement in their performance. By grounding employees and reducing entertainment spend, UK SMEs could be shooting themselves in the foot.
The bottom line is that client entertainment needn’t be extravagant to be worthwhile. It’s all about spending your budget smartly, and making it work harder for you and your business. For instance, Concur’s survey demonstrated the power of a good old fashioned meal in a restaurant, with 36 per cent of UK sales executives agreeing that breakfast, lunch or dinner with a prospect has the biggest impact on landing a sale. Potentially, more expensive items such as tickets to a sporting event or away days are deemed to have less of an impact.
Investing in relationships with both current and prospective clients is a pre-condition for growth, especially in a tough economy. Cutting back on first class travel or banning £1,000 bottles of wine makes sense for the bottom line, but investing in travel and entertainment where it makes strategic sense is priceless and money well spent. There are automated expense management tools available on the market today that can help businesses analyse where employees are spending on expenses, ensuring it is smart and impactful. This is an investment that can really pay off.
An easy-to-use automated system allows SMEs to properly manage and control employee expenses by providing greater transparency and enabling businesses to ‘target spend’ where appropriate while increasing savings.
Finally, with Europe recovering from the recession, there’s no better time for SMEs in the UK and across Europe to re-examine how much investment is allocated towards business travel and entertainment to strengthen relationships with customers – a companies’ most important commodity.
David Vine is managing director at SMB Concur UK.