It’s true that you often need to spend money to make money, but when your company spends money on food — whether it’s for meetings, training sessions, or recruiting events — don’t you want to get the most marketing bang for your buck?
You may have a system in place to help your employees optimize their food spending, but to maximize your return on investment (ROI), you need to control reckless spending while shifting your organization’s focus from expenses to returns. Running a company isn’t like visiting the craps table in Vegas — you don’t want your luck determining the ROI of your food spending. Instead, you want to put a process in place that controls it.
Forsaking Limits for Benchmarks
In 2016, Certify reported that 25 percent of responding companies did not place limits on employees’ travel and entertainment expenses. While there’s no question that a company needs to control spending, companies might consider setting benchmarks rather than limits. Benchmarks concentrate on establishing a standard that shows employees what you want them to achieve, but also gives them a range outside of the standard that you find acceptable.
A benchmark differs from a hard limit in that it gives an employee something to strive for and changes their focus from what they can’t do (exceed the limit) to what they’d like to do (fall below benchmark spending and exceed benchmark ROI). In addition to giving employees more flexibility and a better handle on the relationship between their spending and ROI, benchmarks also create a new way to measure performance and track successes.
When you implement a benchmark system, determine what point outside the range will trigger follow-up. For example, an employee that overspends benchmarks by 10 percent without exceeding ROI benchmarks by a commensurate amount may need to be audited or go through additional training. Establish your benchmarks by reviewing your company’s average spending and ROI over the past few years. Alternatively, you can use averages within your industry.
Make It All About The Gains
Too often, companies get caught up in scrutinizing employee spending and pay little attention monitoring employees’ ROI. By focusing solely on whether employees stay at or below a target spending limit, you may miss out on tracking trends in how an employee’s ROI moves with their spending, almost like a body builder who focuses too much on reps and not enough on gains.
When you focus on the gains made from spending rather than the actual amount spent, you show employees what your company truly prioritizes, and this in turn affects how employees look at the purpose of the spend. Center your reviews and audits on the returns and benefits of employee spending. Discuss with your employees what they did differently at high ROI meetings and what they could have done to improve ROI at less successful events.
Take Back Your Credit Card Rewards
One of the simplest ways to maximize food spending is to make sure employees spend with a corporate card that features rewards. When employees use personal cards for business expenses, they get the airline mile and cash-back rewards. Instead, accumulate those rewards for use by your company and you’ll soon see savings.
Reports from Certify tell us that 25 percent of all U.S. companies spend over $1 million on travel and entertainment each year. That makes t&e and food spending a great place to find ways to better impact profits. Ultimately, employees and managers should remember that travel and entertainment are operating expenses. They fuel the fire that represents your business growth, which makes it a great idea to place more emphasis on harnessing the power of the spend rather than limiting it.
Now that you have some ideas for maximizing your food spending, here are some tips on optimizing it.