Most social situations with customers include a meal. The traditional ‘business lunch’ is a way to develop relationships, win future jobs, and gain referrals. But it takes a careful strategy and planning for your meeting to be successful.
- Choose the location carefully
Many people choose a place randomly, but this can be a big mistake. If the restaurant is especially noisy, or if your customer has to drive a long way, then they’re not going to be impressed.
Select a location that’s close to them, has easy parking, and offers a quiet atmosphere so you can chat comfortably without being in ‘earshot’ of any one too! Also, choose a restaurant where the food and service are consistently good. Or if they are from a different area ask them for their local favourite and arrange to go there, a visit to their little ‘neck of the woods’ will ensure that they are comfortable in their own surroundings and will open up topics to break the ice!
- Make your customers comfortable
It’s important for your customers to feel at ease from the beginning, so make sure they know who’s paying the bill. If you’re the host and you issued the invitation, then you should pay. To avoid confusion, tell your customers up front that they’re your guests.
Also, tell them what you plan to order before the waiter or waitress returns to the table. Your guests may feel uncomfortable if they order an expensive steak, and you choose only salad and soup.
- Spend appropriately
Any discretionary expense incurred by a business should be looked at with your ‘WIFM’ or what’s in it for me glasses on – in other words will my return on investment exceed this expense?
Remember to review how much you spend on the customer – and compare it with how much you can reasonably expect to gain from developing the relationship.
For instance, if your customers have a lot of potential business for you, taking them to an expensive restaurant for dinner would be appropriate, because your rate of return could be high. However, if the customers can potentially give you only one or two small jobs, then a moderate lunch might be more suitable.
A general rule is to make sure that the amount you spend on customers is proportional to what you expect to earn from socialising with them.
Whilst the ‘Tax Office’ won’t generally allow this type of expense as a deduction, there are clever little ways to making sure that you can still get one!
If you spend a bit of time and money nurturing your business relationships with your customers this way, let’s have a chat to see how we could best arrange things to get maximum value – both in terms of business and tax efficiency.
Have a great day!