Lesson Learned: Don’t Retreat, Forge Ahead!
Jan 23
News Associated Luxury Hotels, economy, meeting industry No Comments
Please enjoy the following guest post from our friend and member Dave Gabri, President and CEO of Associated Luxury Hotels International!
Understandably it can be easy to get discouraged lately, if you watch the evening news or the Sunday morning news talk shows.
We were optimistic that the tiresome onslaught of negative economic news was behind us. After all, we have definitely seen positive signs in our meetings demand that business is back in the “business of business,” which includes an impressive growth in demand for face-to-face meetings.
But the recent stories about the latest challenges to the economy and markets could make you feel like everyone should hunker down and not spend a nickel.
Before reacting too quickly to change course, and cut meeting and incentive program expenditures which are needed for the developmental success of your organization or business, you should take a step back and analyze what we learned from the recent economic downturn of ’08 and ’09, even if we haven’t yet seen the “full” recovery. For one, we now realize the quantifiable value of in-person meetings, as it has been documented by intense research.
While business leaders have always intuitively understood and appreciated the value and benefits of face-to-face meetings and incentive/recognition travel programs for years, we now have the research to prove it. Studies like the “Return on Investment of U.S. Business Travel” by Oxford Economics show the indisputable value of meetings.
Quantifiable Value of Meetings
As you may recall, the authoritative study, conducted by a respected economic analysis firm, found that face-to-face meetings allow customers to convert 40 percent of prospective customers, versus just 16 percent without such a meeting. In addition, the average company generates 5 to 20 percent of new business through conference and trade show attendance.
The study also identified that each dollar invested in business travel (including meetings) drives approximately $12.50 in sales and $3.80 in profits. Furthermore, the average business would forfeit 15 percent of its profits in the first year of eliminating business travel, and it would take three years for profits to recover.
Additionally, the study found that 85 percent of the corporate executives surveyed perceive Web meetings and teleconferences to be less effective than in-person meetings with prospective customers, and virtually 63 percent believe virtual meetings are less effective than in-person meetings with current customers.
When it comes to incentivizing the achievers, companies now know they would need to increase an employee’s base compensation by 8.5 percent to achieve the same effect of incentive travel, but then would not capture the allegiance generated through incentive travel programs.
More Proof
A survey published by Harvard Business Review entitled “Managing Across Distance In Today’s Economic Climate: The Value of Face-To-Face Communication” provides additional verification. It found that 79 percent of the respondents said “face-to-face meetings are the most effective way to meet new clients to sell business,” while 89 percent said “in-person meetings are essential for sealing the deal.”
Also, a recent study by the Cornell Center for Hospitality Research found face-to-face meetings enhance attention, trust, empathy, social networks, and mirroring (such as responding to body language). The research also found that in-person meetings are better at inspiring a positive emotional climate, and for relationship-building.
So look at the big picture, rather than just these sensational headlines, to see what is in your organization’s or company’s best interest. Certainly a leadership lesson learned from ’08 and ’09 is that in order to keep the boat steadily moving forward, meetings make a difference to advance our objectives. So rather than retreat, forge ahead!
Current Discussions