To be, or not to be. Be in the same room, that is.
On paper, abandoning corporate travel in favour of virtual meetings makes financial sense. Not only do travel expenses disappear and travel stresses evaporate, the diversifying risks to employee health and safety drastically fade.
In short, virtual meetings are cheap, safe and efficient. But businesses can’t afford them.Why?
The Virtual Meetings Market Today
Web conferencing technology is predicted to be worth $3.6 billion USD by 2020.
With providers like Adobe, Uber Conference, Microsoft, Cisco and Skype offering premier and affordable platforms, the virtual meetings market shows no sign of slowing. In fact, the use of the technology exploded in 2015, with one survey revealing that over 50% of executives use virtual meetings every week.
The platforms are growing more sophisticated, yet increasingly user-friendly at the same time. Platforms like Zoom can be accessed on a suite of devices, and make real-time screen shares and annotations simple. It’s little wonder more than 380 000 businesses use Zoom alone.
Again, virtual meetings are cheap, safe and efficient. But are they also the cause of a 17% drop in profits?
Can Businesses Abandon Corporate Travel?
According to an Oxford Economics report, a business that abandons its corporate travel programme would suffer a 17% drop in profits within the first year.
The same report also found that 40% of executives say leads are converted into customers through in-person meetings. This conversion rate is just 16% without an in-person meeting.
This diminishing conversion can be put down to a few things:
1. 93% of communication is nonverbal
A UCLA study found that as much as 93% of communication effectiveness relies on non-verbal cues. While the video streaming qualities of virtual conferencing platforms like Zoom, Skype and GoToMeeting may be ever-improving, they’re far from a stage where attendees can identify a bead of perspiration or a general air of suspicion.
In essence, virtual meetings can limit communication effectiveness by 93%.
2. Business trips convey respect
Business trips aren’t all glitz and glamour, as any corporate traveller who has endured a 15-hour flight followed by a 9-hour layover (and last-minute dash to a consequential meeting) will tell you. In fact, there are numerous health conditions associated with regular international travel, including a number of stresses that travellers endure.
Thus when a potential client flies around the world to meet with you, you understand their commitment to the relationship.The equation is simple; business trips can be mentally, emotionally and physically draining. Soldiering through them for the benefit of the relationship conveys the kind of respect, dedication and professionalism that earns trust and reciprocity.
Other Benefits of In-Person Over Virtual Meetings
The benefits of corporate travel are many, a fact reflected in the prediction that the industry will be worth a jaw-dropping $1.6 billion USD by 2020. The return on investment of corporate travel has also been estimated to be between $10 and $14.99 per dollar invested.
But corporate travel benefits the employee as much as it does the business. Returning business travellers have been found to drive innovative thinking, fuelled by exposure to new ideas and fresh perspectives overseas.
Furthermore, the networking element of corporate travel can turn into its most lucrative. Flights alone can present valuable networking opportunities, a fact recognised by carriers who offer services like ‘Meet & Seet’, whereby business passengers can link their seat numbers to their social media profiles.
So corporate travel is good for business, and virtual meetings aren’t adequate replacements for the time-tested handshake. Despite this, corporate travel programmes continue to be a first port of call for cost cuts, according to a study published in the Academy of Management.
Travel managers who arm themselves with an effective management platform can optimise their policies, minimising unnecessary costs, ensuring compliance and driving business growth through corporate travel.
To see how Locomote can transform the way your business travels, view a live product demonstration by clicking below.