Although the perception of meetings is not as big a concern as it was a few years ago, the intense scrutiny the industry experienced in 2008-09 will continue to influence how meetings and events are designed going forward. Budgets will remain tight, there still will be fewer perks for attendees, and planners will continue to downscale F&B, entertainment and activity expenditures as needed.
But some planners may face a different, more intimidating, challenge: Making the case to reinstate meetings altogether. Although there has been a lot of talk about the “green shoots of growth,” there is a very real possibility that the economy will still need time to fully rebound. That doesn’t mean companies should continue to cancel meetings, however.
Why meetings matter
“Tough times are a great time to renew trust,” John Baldoni wrote on his Harvard Business Review blog Leadership Matters. “When customers and employees see the leadership team standing front and center and delivering the message, it demonstrates that management cares about them and considers them essential to weathering the storm. Canceling such meetings, except when there are no other alternatives, sends the message that employees and even vendors and customers are expendable.”
At least two major studies have proven the value of face-to-face meetings, showing that business executives support the need to meet and illustrating the dangers of not bringing employees, clients and customers together. They offer great talking points for planners to use in discussing why meetings should take place.
The value of business travel
In September 2009, the Oxford Economics Study (which includes sales trips, meetings, conventions and incentive trips in its definition of business travel) found that:
- Executives and business travelers estimated that 28 percent of their current business would be lost without in-person meetings.
- About 40 percent of prospective customers become new customers through a face-to-face meeting. Without that meeting, the conversion rate is 16 percent.
- For every $1 a company invested in business travel, it experienced an average of $12.50 in increased revenue and $3.80 in new profits.
- The average U.S. business would forfeit 15 percent of its profits the first year it eliminated business travel, and it would take more than three years for profits to recover.
- Executives said customer meetings had the greatest return on investment (ROI), with $15 to $19.99 generated for every dollar invested.
- They also said the average ROI of trade-show participation generated $4 to $5.99 for every dollar invested.
- More than half of business travelers said that 5 percent to 20 percent of their company’s new customers were the result of trade-show participation.
- 85 percent of corporate executives perceived Web meetings and teleconferences as less effective than in-person meetings with prospective customers, 63 percent with current customers.
- Companies would need to increase an employee’s total base compensation by 8.5 percent in order to achieve the same effect of an incentive travel program.
“In order to grow, businesses have to invest,” says Roger Dow, president and CEO of the U.S. Travel Association, which commissioned the study. “This study shows that face-to-face meetings and incentive awards to top performers are among the smartest investments companies can make.” The study took 13 years and covered 14 economic sectors.
The importance of face-to-face meetings
The use of technology-enhanced and other virtual meeting alternatives skyrocketed during the recession, so Forbes conducted an insight study with more than 750 businesses to see if Webconferences, videoconferences and other virtual meetings could replace the need to meet face-to-face. Its study, “Business Meetings: The Case for Face to Face,” found that:
- More than 8 out of 10 executives preferred face-to-face contact to virtual meetings because they build stronger, more meaningful business relationships (85 percent); give executives the ability to read body language and facial expressions (77 percent); and include more social interaction and the ability to bond with co-workers and clients (75 percent).
- Those who favored technology-enhanced meetings (less than 20 percent) did so because it saves time (92 percent), saves money (88 percent) and offers more flexibility in location and timing.
- When asked to choose the meeting method most conducive to fostering specific business actions or outcomes, executives overwhelmingly preferred face-to-face meetings for objectives including persuasion (91 percent), leadership (87 percent), engagement (87 percent), inspiration (85 percent), decision-making (82 percent), accountability (79 percent), brainstorming (73 percent) and strategy (73 percent).
- Webconferences were preferred only for data presentation (44 percent) and information dissemination (43 percent), although they held less than a 10 percent margin over face-to-face meetings in both areas.
- Roughly 27 percent favored teleconferences for urgent matters; otherwise, the percentage of executives preferring teleconferences or videoconferences was negligible.
- 87 percent of the executives agreed with the statement, “There are tangible business benefits to in-person, face-to-face meetings that outweigh the cost savings of alternative, technology-based meeting methods such as Webconferencing or videoconferencing.”
“People don’t want to sit in their office looking at each other on computer screens,” says John Russell, a former chairman of the American Hotel & Lodging Association, who was quoted in the report. “That personal interaction — getting together to talk over dinner, drinks or a cup of coffee — is the foundation on which business relationships are built. It’s what drives business.”