The WSJ ran an article last week (June 11, page B1): "Forget the Stock Price–Let’s Party!" The gist of the article is that a number of companies (primarily technology types) are spending a half million bucks and up for one evening of caviar, martinis, big name music groups, amusement rides in the Superdome and other exorbitant stuff to schmooze their customers. Sure, these "events" proliferated in the dot.com mania days, but still? Apparently so.

Was nothing learned? Have these folks completely lost their minds? Expensive bashes when the finances of their companies are in lousy shape? When most of these companies are bleeding cash, missing numbers, and watching their stock prices hover in the low single digits? I’ll bet that a lot of business folks who read the WSJ article just shook their heads in amazement and disgust.

I shook my head, too, when I read the article and thought: indeed, the world is a bizarre and wacky place. CEO’s of poorly performing companies who spend big bucks on big bashes after the dot.com and technology meltdown should be institutionalized. But then I re-read the article and thought about it more. Maybe, it’s all relative and not that bizarre. Heck, some corporations throw tons of money at a multitude of extravagances from fleets of private jets, to unnecessary edifices, to outrageous executive salaries, to multi-page page spreads in the Journal, to Super Bowl commercials. Does being profitable give a company any more right to toss around money for dubious purposes? Certainly, there’s more margin for error if you’re raking it in, but squandering money is squandering money.

A lot of readers (of the WSJ article) probably thought: "How can these (poorly performing) CEO’s spend anything on marketing (when their companies’ respective financial health isn’t that good)? Why aren’t they all back in the office working? Cancel the customer meetings until you’re in the black. Get real."

But that’s not the right attitude either. The question is: What’s the best use of that half million dollars (or another amount) to retain customers, increase current customers’ business, and find new customers. Blowing a half million dollars on a big party? Very doubtful that’s going to help.

But because the economy is not the best right now and/or because your particular business isn’t at peak performance are not good reasons to stop making marketing investments. You just need to invest wisely. "Events" are marketing tools, not unlike trade shows, other promotions, advertising, public relations, etc. In particular, events are aimed at customer goodwill that hopefully translates into retention, customers saying good things about you to others, and selling more products into your customer base.

Customer meetings are important–and there is no reason they should be dull. There’s also no reason that the Rolling Stones need to be the headline group or that the party favors are Mont Blanc pens or that you serve Caymus at dinner. Typically, the big event things are extensions of corporate hype and spin to deflect from company deficiencies, and they are usually a very bad use of marketing dollars compared to the alternatives.

On the other hand, getting together with customers is always a good idea. But that doesn’t require a big event(s) or spending tons of company money. It does require good planning and a lot of work. Here are some things to reflect on when you’re pondering a meetings(s) and event(s) with customers:

1) Are you trapped into thinking you’ve got to do one big annual meeting each year? Where was it written in stone that you must have one big meeting with all customers? Why not smaller, focused meetings one year and a larger meeting another year? What about more consistent, less expensive dialogue instead?

2) Do you feel compelled to invite all of your customers? Customers are not created equal; why not worry about your best customers or the one’s with the most upside? Do you know who they are?

3) Are customers involved in your meetings, or are your people just on their soapboxes the whole time? This is the Number One fault of customer meetings: a lot of telling but not much listening and sharing of ideas.

4) Are you meeting them to death? Less is often more. Cramming in more stuff to fit 8 or 10 or 12 hours a day is usually counterproductive. Sorry, but most adults attention spans can’t handle it.

5) Are you having some fun? Most meetings (and businesses) themselves are way too serious–you need to have some fun (at reasonable cost)

6) Do you give customers have time to talk among themselves–unsupervised? Letting customers interact without necessarily monitoring all discussions is healthy and productive. PS: Do you have the guts to hook them up online?

7) Do you follow-up and take action on what you learn? So you got through the meeting, but did you follow-up on ideas, leads, and continue the dialogue? If not, your meeting was a waste.

8) Did you bother to measure the tangible results from last year’s meeting? Maybe it was worth the big event expenditure e.g. if you followed up with a few customers and turned those into big sales last year. Maybe, but not likely.

9) Are you really just trying to spin them? Big meetings and events will not hide the truth; you’d better have your act together or not bother meeting at all.

I’m all for keeping customers happy and generating more business from the current client base. Customers meetings and events–if properly planned–can be very cost-effective ways to retain and increase business. But use common sense.

The CEO’s who are still throwing the big bashes are either spinning their customer base(s) and/or are simply worried that not doing the same big party again this year will send the wrong the signal (that the company is not doing as well). They are wrong. Everyone knows how your company is doing–you’re not going to fool them. And probably as many customers are aghast at such extravagance as those who are a little "impressed" by the Mont Blanc pen. CEO’s of companies described in the WSJ article should not be institutionalized for insanity, but they should be fired for gross stupidity and negligence for squandering valuable monies that could be used elsewhere to increase sales.

Meet with your customers, listen to them, learn from them, have some fun, but get a grip on the party dollars. Invest them in another marketing activity.

NoSpin Debunkers are free weekly online newsletters written by Tom Ranseen. If at anytime you would like to be removed from the NoSpin Debunker reader list, please Unsubscribe. Otherwise, enjoy, join the conversation, and please forward this debunker to as many friends/acquaintances as you think may be interested–or send me their email addresses. Thanks.

Tom Ranseen NoSpinMarketing 615.383.7157