Travel costs have soared in the past year and there are no signs of costs returning to what they were 12 – 18 months ago. According the Travel Industry Association, July 08 gasoline prices jumped 38% from a year ago and airfare rose almost 20% during the same time period. There is a great deal of debate whether or not crude oil will drop to $70/barrel (currently it’s headed in this direction) or rise to a couple of hundred dollars a barrel over the next few years. Even at $70/barrel, fuel costs will remain high. $200 round trip airfare is rare these days (Southwest may be in the ball park, but that will change as its fuel hedge for forward years diminishes significantly after 2009).
My last trip was a two city stop and cost our company almost $600 in airfare alone. When adding in hotel, rental car, food, etc., the trip cost almost $1,400 – my accommodations were by no-means luxurious. As a small business, we need to generate a tremendous amount of sales to offset travel costs. We are closely monitoring travel and measuring the results. Needless to say, we are cutting back on travel unless the ROI is there.
Most of the businesses we sell to understand travel costs are high and don’t require as much face time as in the past. While it’s still important to meet in person to initiate relationships, it’s no longer required to grow the relationship. I’ve talked with a couple sales reps that pride themselves on closing business without ever meeting the customer in person.
There are a number of tools that businesses can take advantage of to reduce travel costs – most notably web and video conferencing. Video conferencing is in its infancy, but will no doubt take off as bandwidth capacity increases and people are comfortable staring at a web cam.
Web conferencing is another story. It’s been around for years, yet there are still many businesses that don’t take advantage of it. It’s great for sales presentations, training, etc. Web Ex (now owned by Cisco) is the most well known brand because it was a pioneer. Now there are hundreds of web conferencing tools.
Even though there are hundreds of providers, there are two main web conferencing categories. A majority of web conferencing services fall into the first category requiring each participant to download software in order to view the presentation. The advantage of this approach is it enables collaboration. In other words, you can pass control to other people and view their computer or you can take control (only if the person approves) of their computer. The downside is the download process. Some companies don’t allow employees to load software on their computers rendering the service useless. Another problem is sometimes software simply does not work after your customer downloads it – creates a rather awkward situation. This has happened to me several times. Even if the software does work, it can take a few minutes for the download process to complete – no problem for those who excel at small talk.
Another option is web conferencing service that allows you to use a seminar and collaborative format. For those of you that aren’t familiar with seminar format, it does not require a participant (i.e your customer) to download software. They simply go to a web site and enter an access code. A web conferencing service such as GoMeetNow by RHUB allows you to work in a seminar as well as collaborative format and pricing is very attractive.
The beauty of web conferencing is the switching costs are relatively low. If the service isn’t right for you, it is easy to cancel and try another service.