For cash-strapped startups, opting for a virtual conference call over an in-person sales meeting may seem like a no-brainer. Flights, hotels, car rentals, meals and other business travel expenses add up quickly and eat into limited cash flow. But closing a major deal over the phone can be tricky, especially for startups that lack a proven reputation for success.
In-person meetings are a critical opportunity for building rapport, improving your understanding of a prospective client’s challenges and better positioning your business to meet these needs. Plus, with so many businesses favoring Skype calls, nothing differentiates your business quite like flying out to talk in person.
While 51 percent of all businesses cut back on business travel after the Great Recession, recent research found that curbing such travel might actually hurt a company’s bottom line for years to come. In fact, companies that invest in smart business travel receive a nearly 4-to-1 return on this investment, according to a U.S. Travel Association report.
That said, not every business trip is worth taking. You can drill down travel costs by projecting the trip’s ROI in advance.
How to determine business travel ROI.
Tracking business travel ROI can be difficult. It’s unlikely that a client will ever come out and say, “We’d have never hired you if it weren’t for that in-person sales pitch!”
The key to determining expected travel ROI is to look at prospective inputs and outputs. The travel investment may not be worth it if a sales pitch is truly a long shot or its timing involves a costly last-minute flight. If you don’t have any other clients in the city for additional meetings, you may consider skipping the trip.
For clients who are on the cusp of closing, the trip may be worth it. Create a spreadsheet that lists estimated travel costs per employee, potential sales outcomes and additional “bonus” investments in relationships, such as local networking with old colleagues or coffee chats with existing clients or mentors.
Finally, look for ways to minimize overall trip costs while maximizing trip impact and value.
Here are three tips to get you started:
1. Take advantage of time on the ground.
Flying out for a face-to-face sales meeting that’s scheduled for 1 p.m.? Don’t let the morning or late afternoon go to waste. If existing clients are close, schedule a quick coffee or informal drop-by to check in on their needs.
Don’t have any current clients nearby? Head to LinkedIn, and check your network. Eighty-four percent of LinkedIn users say they've created business opportunities from using the platform. Who do you know who is based in the city or could put you in touch with a prospective client? There are many ways to get the most out of your business travel.
2. Pick a home base.
In a major city like New York or San Francisco, hopping all over town for meetings can be exhausting, time-consuming and expensive. Consider setting up a “home base” near your main client’s office.
During downtime, hold “office hours” at a communal workspace or quiet coffee shop. Invite contacts from your network to drop by at their convenience. You’ll be able to see more people without spending a small fortune on in-town transportation.
3. Minimize overnight stays.
Hotel costs add up quickly. Whenever possible, opt for an early arrival flight and a same-day departure flight. Traveling at 6 a.m. or 11 p.m. may not be ideal for your sleep cycle, but you’ll maximize time on the ground, and because these flights are at less popular travel times, you’ll more likely save on airfare. To save even more, try booking at least six weeks in advance because, according to the Airlines Reporting Corporation, prices drop below average around this time.
When cash flow counts, determining trip ROI in advance is essential to smart travel investments. Look to piggyback client meetings on existing networking conferences or vice versa. Maximize the value of your time on the ground while minimizing overnight stays. Finally, consider joining an airline’s business travel program, which can help you save money while traveling and maximize your business’s travel ROI.