Sales people are notorious for running up big tabs for wining and dining partners, customers, etc. This came out tangentially here - When The Tech Must Stay Overnight, How Do You Pay? but is clearly its own issue.
For sales people, how high will you go? Let's say you take out 4 people, would you spend $500 on dinner? $1,000?
What's the limit? What type of push back would get from management?
$100pp for a dinner is about average. Maybe a little more if you are trying to win over a potentially big customer, celebrate a large win, or reward an integrator partner for a good quarter or yearly goal.
#1, thanks. How much of that is alcohol? It would seem to be hard to spend that much purely on food, even if it was a typically more expensive restaurant, like a steakhouse.
Rough breakdown of a typical dinner, not in NYC, SF, LA, etc:
In my experience, steakhouses are not that bad, it is the higher-end sushi places that can easily get to $100 in food alone.
For a group dinner only (no pre-drinks at the bar, or post-dinner cigar and cocktails scenario), alcohol is usually about 30-40% of the total bill. In several cases where I did a customer dinner with a partner we would split the bill where the manufacturer pays for food and the integrator pays for the drinks and I do not ever recall drinks being more than the meal, but sometimes would be close.
If you are just running up a tab and have no concern for cost, then you can easily spend $100pp just on alcohol, but those are really not that common.
I'd agree with this. I've noticed prices creeping more to the $120/person range in the past few year, but that may just be my tastes getting more expensive and me taking customers to more one-off farm to table places.
that tip. woof. really? less than 10%?
We just took a client out to lunch last week. I didnt even look at the bill. Its inconsequential in this case. We dont do it all the time, but when we do it, we take the team. and we tip 20%.
You are right, that was too low. I changed it from $7 to $15. 18-20% is the usual range for a tip, in many cases, it is automatically added to the bill for large groups anyway.
If properly managed, this is an investment, not a cost. That being said, the investment needs to match the potential. The most I ever spent at one sitting was about $2000 for 10 people. This was an integrator who we flipped to our product, and they've done $200k/year since 2011. I have another long standing customer who has done millions with me at three different manufacturers, and we're working on number four. We usually grab a burger or something else simple. Then again, we have both spent our own money breaking bread together, completely outside of business, so I think we're past the "wining and dining" stage.
That all being said, don't ruin this for me, John! I'm a huge food nerd, I need my bosses to believe that these dinners are a legitimate business expense!
ADT parties....
$150pp is average for our steakhouses/sushi. This is of course for the more important customers of which the steaks alone are $80 each sides not included. Alcohol during these types of dinner are not a big part of the bill because they know we are eating some serious food.
Golf is easily costing $100-200 also.
From our management, "Do whatever it takes."
Wining and dining, something I hate when it comes to business. There has to be common sense exercised. I believe sure, go ahead if they're going to sign a contract at the dinner table, or after the contract is signed...otherwise it is a waste of money simply because there's no guarantee. Wine and dine should be earned.
I was at a work dinner one time where it was a party of 8 at Morton's of Chicago. Including all drinks, meals, sides (family style a la carte), etc, our bill came to $1250, or just over $150 per person.
That was the most extravagant meal I have been a party to. I sure wish I had better stories to tell, but as a small integrator, I am not offered many dinner trips. Not to mention, there aren't many high dollar restaurants in my area (NW Ohio). $100 per person would be very high for our area, unless someone is drinking expensive scotch and drinking their meal.
I sure wish I had better stories to tell, but as a small integrator, I am not offered many dinner trips.
Come on, Dahua sales people, now is your chance! :) (after you fix your product issues)
Im the type of guy who doesnt need to be wined and dined. I just want to know if you have great products and you can support me. That will be enough for me to buy. If your product and support isnt as good as the next guy's, i dont care how much you pay for my food, my long term business communications are more important to me than how much you can schmooze me.
Similarly, im not a big winer and diner when it comes to our customers either. I have done it and I will continue to do it when needed, but I only do it because its a "cost of doing business" with some customers. I'd rather not do it. Id rather "expense" money by sending out samples or whatever. But some customers are more into "relationships" which I can understand. What Ive come to understand is that not everyone is like me and sometimes I have to appeal to different personalities but I will only do it to an extent.
Their is a very large integrator in town and alot of their integrators and managers would rather do business with us, but since their corporate heads are regularly wined and dined by a competitor in Dallas, they are required to buy from them. Instead of being able to conveniently pick up their stuff here in Tulsa, they have to wait a day or 2 to get their stuff and the competitor regularly screw up their orders, the managers hate ordering from them. It would make much more sense to buy from us. Its all political at that point and as much as I want these guys business, I really dont want to compete on that level. I do get some fill in from these guys every now and then which we really appreciate and always make sure to go the extra effort when they do order from us. I would rather win their business on our efforts as opposed to how much we can spend on their food and alchohol.
I get asked to lunch and dinner by salespeople all the time. For the most part, I try and pay my own way, but every now and then, the salesperson person picks up the tab.
About ten years ago, me and one of the engineers I had working for me at the time got taken to dinner by one the major manufacturers. The guy took us to a very expensive steakhouse in Seattle. We all had steaks, sides, salads, etc. plus a couple of bottles of wine. The bill came to over $500 with tip and I asked if I could pay our share. The guy adamantly refused to take my money. I decided not to fight it and let it slide.
About a week or so later, the guy called me and sheepish asked if I would tell his boss that he had taken our whole team out to dinner, not just the three of us. I guess he was having trouble getting the expense reimbursed by his company. I refused to lie for him but instead offered to send him a check for the entire amount. He didn't accept and I never heard from him again.
Wow, I can't believe he had the nerve to call you and ask you to lie for him! That would be a red flag to me never to do business with him - if he'd ask me to lie, he's probably a liar and he'll lie TO me in the future. That said - he may have been a "newbie" a little wet behind the ears and didn't think it through. In that case, my advise to him would have been to suck it up, ask my employer to let me pay it back to the company over time as pay deductions and NEVER let the customer know it was ever a problem. Lesson learned. PS: I'd probably start looking for another job too, sounds like he didn't have much support from his company,mistake or not.
As many have said here, there are occasions when it makes good business sense to spend the money on a nice meal for customers, and $120 or so per person is a good average for budgeting, but depending on the customer's drinking habits, this can change radically. In a nice steak house, for example, a decent bottle of wine can be hard to find for under $100. In a group of 4 ppl, that's about 1 glass per person for a whole bottle, so if you're having 3-4 glasses each, that's $300-400 just on wine, and I've seen it go way up from there...we all have our stories for sure.
I wanted to chime in specifically because I've noticed a welcomed trend, at least in my area, and that is that customers aren't really looking for that expensive wine & dine as an expected practice anywhere near as much. I've had plenty of customer go out, order modestly, have 1-2 drinks (beer or house wine), and be more than happy with that. The cool part is that I have made sure they know they can order whatever they like, but they choose to just keep it reasonable on their own.
I think that things are changing a bit, as younger customers don't place as high of a value on fine dining, but rather prefer a good experience. I don't do a lot of expensive dinners lately, but I have a lot of customers asking for targets to hit that would justify a high end experience, like a golf weekend at a desirable location. I think this makes ton more sense. Yes, it does cost significantly more than a nice dinner, but it is seen and structured as what it really should be -- a reward (and thanks) for achieving a revenue target. It is sometimes harder to justify this type of activity to the bosses, but when you look at it as an investment toward a goal, it makes a lot more sense to me than just having nice meals in hopes that they'll sell my products.
Thoughts?
#7, thanks, great feedback.
Btw, we did an integrator survey on this topic with 150 responses yesterday. We'll be releasing a post on this with integrator responses.
Speaking of wining and dining, if you are in NYC, like steak, and are an end user, Arecont has an offer for you:
Assume they get 15 people, plus a couple of Arecont guys at Ruth Chris in NYC, this is likely a $2,000+ event, which seems like a lot of money to spend on such a casual promotion.
That's a very direct (literally) way of appealing to end users...
But let's Arecont's average project size is $50,000, I could see the value of bonding with an end user for a few hundred dollars per
Does the end user know what an end user is?
Thats exactly what my thoughts were. Seems they fell into the marketing trap of thinking everyone knows their industry lingo. Easy trap to fall into.
I sure would think the term 'end user' is self-explanatory, however as a government end user let we say there are ethical rules on gifts which include food and drink. For me if I I'm invited out I make it clear up front that I am paying my own way and if the "outside source" tries the get the check at the end and not accept my money, then my share goes on the table.
I desperately try to avoid these situations and being put in one makes me very uncomfortable and is a reason for me to try and avoid certain integrators and manufactures.
I worked at a large distributor where the practice of giving anything to a government customer was forbidden and a terminatable offense. Made if very hard to compete with the local and regionals in some accounts. I remember one guy who was always talking about how my competitor takes him out for steak lunches, implying that is what I should do to win some orders.
Yes, "end-user" is self explanatory - but it would sound odd if you were the end-user and not familiar with the industry jargon. I feel like it could be impersonable and a turn-off being labeled from their perspective.
Should should have turned him in to the IG or the contracting officer, he knew that was wrong. Government employees to include the DOD are instructed the on ethics regularly.
I worked at a distribution company many years ago where "end-user" was a common insult. as in... "dont be such an end-user."
O, I agree the term end user is not very endearing and not a good move as you said.
Typically owners or principles of businesses dont need nor want to be "wined and dined". They dont have the time for such nonsense and are far more interested in the underlying value of the product or service being bought/sold and what it can do for their business, and arent dumb enough to settle for lesser value for the price of a lunch. And if he is that dumb, wint be in business for long.
Dinners, lunches, golf outings, fishing trips, etc are all the purview of middle management and third party consultants taking advantage of their positions as gatekeepers. Its sad really when you think about it.
NOTICE: This comment has been moved to its own discussion: Typically Owners Or Principles Of Businesses Don't Need Nor Want To Be "Wined And Dined"
I don't "Wine and Dine" to win business. I "Wine and Dine" to thank a customer for their partnership.
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