Manufacturing AUTOMATION

Features Industry Watch Opinion
Travel and technology: Leveraging technology to improve your company’s personal touch


June 15, 2006
By Paul Hogendoorn


Topics

It is that time of the year again – trade show time. The debates and discussions about their effectiveness will take place in numerous boardrooms, offices and at the trade shows themselves. At the same time, there will be related discussions about the declining importance and effectiveness of business travel.

Many companies have reconsidered business travel because of the convenience of the Internet, and the increasing costs and hassles associated with travel. However, just because the Internet makes communications with the outside world much easier, and rising costs and increasing hassles make travel more difficult, it could be a mistake to reduce or eliminate business travel and trade shows from your company’s agenda.”

Case in point. A company I know quite well manufactures and sells equipment to schools, institutions and recreational facilities. The product price ranges between $4,000 and $7,500. Since each customer typically only buys one unit (i.e. one customer, one sale), there is little benefit gained by building long-term relationships. They have about a half dozen other companies building and selling the same devices, and there always seems to be at least one competitor that is willing to sell at a lower price. With the relentless pressure to continuously reduce cost and cut margins, it seemed that using the Internet more and travelling less would be the right course to take. Instead, they chose a different course.

Over the last few years, this company came to realize that their close rate was about one in 10, but improved to one in five when they made contact by phone, and a whopping one in two when they made contact in person. Travel expenses for cold calls and canvassing the territory was reduced, and a better Internet marketing strategy was developed. Focused travel, however, was strongly encouraged and increased. More leads were created through the Internet, from which the good leads were sorted, and face-to-face contacts were then planned.

Another company I know well sells sophisticated electronic equipment to Tier 1 manufacturers all over the world. When it was clear that they had to be perceived as a global player in order to succeed, they routinely sent their sales and marketing people on expensive trips to wherever the opportunities emerged. Unfortunately, the sales cycles were generally very long, and by the time decisions were made, any personal or relational benefit gained by the earlier face-to-face meetings had faded to the point of no longer being a factor in the decision-making process. The company then chose to leverage the growing functionality of the Internet by doing remote presentations and hosting remote conferences. This functionality is now readily available to a company of any size through a number of service providers.

With this new tool, new opportunities were easily qualified and semi-personal contacts were established, with the added benefit that key personnel could now meet with the target customer’s team, rather than just one or two contact or point people. But, rather than eliminate the travel budget completely, this company chose to reserve it in case an in-person visit close to decision time would help close a deal.

This company now regularly sends its engineering or service personnel to the customer site whenever a hint of a problem or difficulty arises. Their rationale for this post-sale travel strategy is that with the initial commitment securely in-hand, early face-to-face visits represent good investments for longer-term relationship building, assuring not only the customers’ satisfaction with the first sale, but also strengthening their position with that customer for continued business in the future. Plus, true application experience can really only be gained at the customerís facility, solving the real problems that they are experiencing.

There has also been a noticeable change in trade show traffic. However, my own observation, both as an exhibitor and an attendee, is that there may be fewer people present, but those who are in attendance are far more focused.

For instance, I do a more thorough review of the trade shows I consider attending using the Internet. If it is one I choose to attend, I will do additional advance scouting work to identify the booths I want to visit and the products I want to see. The result is that if I am at a trade show, I am spending far less time grazing the aisles, and more time in places that could affect my next buying decision. As a trade show exhibitor, our company has participated in fewer events, but has spent far more effort in advance travelling to meet with qualified prospective customers.

The reality is that the increasing functionality of the Internet and the increasing cost and frustration of travel have changed how businesses travel, but not necessarily how much. Technology should not eliminate the need for, or reduce the benefit of, face-to-face contacts, but rather effective use of technology can make face-to-face contact far more valuable.


Paul Hogendoorn is president of OES, Inc. and chair of the London Region Manufacturing Council. He can be reached at phogendoorn@oes-inc.com. For more information about the LRMC, visit www.manufacturinglondon.com.”