Not Necessarily Out To Lunch

Entertaining clients in the '90s is less predictable, and more personal

When suppliers schmooze with Kurt Krempa of Olson & Terzian P.C., an engineering design firm in Buffalo, it's usually over lunch. Occasionally it'll be during dinner or golf. But two years ago, he was entertained as never before.

Deborah Naybor, owner of a land-surveying company, taught Krempa and his family to scuba dive. He was especially impressed at how Naybor talked his claustrophobic cousin through her fear of murky Lake Erie. "We now have a personal relationship, " Krempa says. "That takes much longer to develop through lunches."

Introducing '90s-style business entertaining: It's more creative and varied than ever. Impressing clients can be as simple as a family dinner at home or as elaborate as a cruise with a jazz band. Such events are as tax deductible as any other business entertainment: generally 50% to 80%, minus the cost of nonbusiness-related guests, such as spouses.

The shift is due in part to new demographics. Women and Gen-Xers are less likely to enjoy pastimes such as golf, steak dinners, or, at the extreme, strip joints. It also reflects a new national focus on health and family. "Entertaining has become more a marketing tool and less a perk," says John Cebrowski, a marketing professor at Pace University's World Trade Institute.

Developing personal relationships is particularly important for small businesses. "I am the business," says Donna Hegdahl, a marketing consultant in Dallas who has taken clients to yoga class. "I try to be a resource to their whole life."

Observers say these new styles stem partly from how women work. "One thing they do more than men is network clients," says Edith Weiner, co-author of Office Biology, a book on workplace trends. Susan Stautberg, whose New York-based PartnerCom helps companies form advisory boards, invites associates, mostly women, to her home periodically to meet a featured guest, such as a fashion designer or a politician.

Group recreation can do double duty, depending on the guest list. Outings that include spouses and children can help develop deeper relationships with clients. And bringing prospects along to mingle with established customers gives them a chance to learn firsthand about the host's business.

Not that old-style entertaining is dead. Women are taking up golf and cigars; martinis are making a comeback. But people are no longer limited to the old standards. For some, engaging in athletic activities beats watching them from a skybox. In Denver, small companies often take clients rock climbing or skiing, says Don Price, marketing guru at the local Small Business Development Center.

New-style entertaining can have hidden benefits. When consultant Hegdahl took Julie Addicott, a marketing manager at GTE Communications Corp., to her yoga class, the pair said they felt so relaxed they were more productive brainstorming afterward. Art Kosatka, an aircraft- security consultant and amateur pilot in the Washington area, takes clients flying. "The spectacular scenery over D.C. makes quite an impression," he notes. "Then we have a burger at an airport in the sticks. No distractions, and we can talk freely."

ART CIRCUIT. Many people appreciate activities that add value, either personal or professional, to the fun. Diane Yeager, a law partner in Washington, took a business associate who was refurbishing a house to an antiques show. Others say clients enjoy museum exhibits and art lectures. Inviting clients and their employees to do charity work can create a special bond, too. "Doing a clothing or food drive gives my staff a chance to meet their staff when they go pick up the goods," says the land-surveyor Naybor.

So think out of the box--the skybox, that is. By building relationships with a personal touch, business owners can enrich themselves in more ways than one.