The Enduring Value of Face Time

A Flawed Measure of Success

The difficulty of making the business case for meetings in times of recession is the meetings industry's own fault, believes Doug Ducate, executive director of the Dallas-based Center for Exhibition Industry Research. Over the past 20 years, the exhibition industry grew at such an impressive rate that "we became enraptured with our own data," he says. "The success story became built on growth: ‘We had 10 percent more attendees than last year, therefore it was a better show.' We sold that message."

When growth gives way to contraction, however, the trade show or conference becomes a failure by those flawed standards of success. "Organizations now realize the weakness of the argument," Ducate continues. "We've got to get back to the core value proposition" as the essential defense of meetings.

Better measures of an exhibition, he says, are the quality of attendance and whether the event drove sales, influenced purchases, or strengthened relationships between buyers and sellers. But it's no wonder attendance and net square feet became the favored standards. Those metrics are much easier to measure.

One of the most urgent challenges facing planners today is to make an unassailable business case for the value of meetings. Traditionally, that has entailed tracking spending, measuring results, and concluding that the meeting did or did not deliver a satisfactory return on investment. Proving ROI and conscientious spending is still a vital part of the argument (for more on this topic, see "Defending Your Event" on page 63), but on its own, it's an incomplete defense of meetings.

That's because demonstrating a meeting's value doesn't prove that some other, possibly less expensive communication method (tele­conference, website, memo, etc.) couldn't have produced an even greater return. In other words, in addition to the normal justification for an individual meeting or event, planners now have to make the case that meeting face-to-face is more effective than alternatives, that meetings provide opportunities that other communications methods don't, and that those advantages are worth whatever extra money and other resources in-person events might cost.

Talking points
When asked to present their best arguments to justify face-to-face meetings, industry sources often rely on emotional or rhetorical arguments because, in many cases, the opportunities in-person meetings provide are hard to quantify.

The human factor. The defense of in-person events usually begins with the fact that, as human beings, businesspeople crave and benefit from social interaction with their peers. "We're not robots," says John Baldoni, a leadership and communications consultant based in Ann Arbor, Mich. "There are many virtual ways of connecting, but there's nothing, I believe, that can replace face-to-face interaction. We want bonds to develop. We want the energy that brings."

Relationships form faster and stronger in person, Baldoni says, which is one of the reasons networking often is cited as a top benefit of meetings. The Center for Exhibition Industry Research, in a six-part study called "The Role and Value of Face-to-Face Interaction," published in 2003 and 2004, found that 69 percent of attendees consider in-person networking to be "very or extremely important" to their job performance. Doug Ducate, executive director of CEIR, thinks the results would be similar if the survey were conducted today.

Casual interaction. Others make more spe­cific arguments about the benefits of human interaction, namely that the most productive conversations between colleagues or clients often happen outside the framework of formal meetings. "The hallway or dinner conversations are in many ways more valuable than the program content, and you couldn't or wouldn't get that any other way," notes John H. Graham IV, president and CEO of ASAE & The Center for Association Leadership, based in Washington, D.C.

Jack Horne, the Chicago-based vice president of sales for Hyatt Hotels & Resorts, agrees that sidebar conversations between or after meetings lead to insights because, in social settings, "someone lets their guard down or puts their ego aside." Outside of the meeting room, or one-on-one with a speaker after a formal presentation, Horne explains, people are more likely to ask questions, admit they don't understand something or suggest creative ideas that they wouldn't feel comfortable floating in front of a large group. These barriers need to be overcome in order for progress to be made, he argues, and that tends to happen along the edges of any formal meeting.

The quality of engagement. The benefits of in-person meetings often are revealed in comparisons to virtual alternatives. Not only do people tend to be more comfortable in person, says Horne, the quality of interaction is better than on conference calls, for example. "I think it's the whole emotional level of participation," he adds. "When you're on conference calls, you're on your computer, you're distracted, you put it on mute. When you're face-to-face, you're forced to participate."

Kevin Iwamoto, vice president, enterprise strategy, for StarCite, a meetings management and technology company based in Philadelphia, says better interaction is possible in person because people communicate using more than their words. Physical cues, body language and eye contact all project people's feelings; if read correctly, that information can lead to more productive communication.

Physical interaction also helps clients develop trust with suppliers -- a necessity when considering making a large capital investment, says David Rich, senior vice president, strategic marketing worldwide, for George P. Johnson, a Boston-based event marketing company. "Will these people be there for me? When it hits the fan, will they protect me?" Rich asks. The conclusions don't come in brochure format, he notes. "You make it from talking to people face-to-face, to make sure you're on the same page. You do that through events."

Collaboration -- a key component of meetings -- is possible but remains difficult in a virtual space, says Joe Federbush, vice president of sales and marketing for Red Bank, N.J.-based Exhibit Surveys. Webcasts or teleconferences are "limited sources of interaction and engagement," he argues.

And for companies looking to make an impression on people, live space packs a greater visceral punch than the virtual world. "How are you going to launch a car in a webinar?" asks Horne.

Furthermore, the opportunity to travel and enjoy experiences as a group is motivating. Hyatt's own incentive program for top performers is "without a doubt the highlight of the year for this group of salespeople. You can't replace that with a certificate or a gift card," Horne says. (For more on rewards, see "The Case for Incentives.")

Competitive advantage. The case for meetings is bolstered by looking at the consequences of canceling, according to Iwamoto. Picture two companies handling important accounts, he says. "One decides, ‘Let's just phone it in.' The other company goes in to meet face-to-face. If I'm the customer, I'm going to start gravitating to that one." Because of the very fact that travel is difficult, expensive and time consuming, Iwamoto submits, companies that continue to make opportunities to meet with clients in person, either at large industry events or one-on-one, implicitly communicate their commitment to their clients and thereby gain a competitive advantage.

Failure to hold or attend meetings and events could be interpreted by the marketplace as a signal of distress or decline, adds Donovan Neale-May, executive director of the CMO (Chief Marketing Officer) Council in Palo Alto, Calif. Meetings help communicate the image of strength, he says.

Industry stats
While rhetorical arguments help make the case for meetings, if chief marketing officers or chief financial officers are to be swayed, the talking points will have to be accompanied by numbers. "As a meeting planner, I would focus on adapting my message and communications using the language of procurement and finance," advises Issa Jouaneh, vice president of global meeting solutions for American Express Business Travel. "Although arguments [for face-to-face interaction] are valid, the real focus at this point in time should be meetings as investments."

Meetings industry organizations have been busy developing research to put the value of meetings into statistics. The sheer amount of research about the industry is overwhelming, but only a few studies express the relative value of in-person meetings.

Thanks largely to CEIR, there is more research on trade shows than on any other kind of meeting, but many of the insights drawn from CEIR's studies, particularly the extensive investigation of the power of face-to-face interaction, have implications for other kinds of meetings as well.

Best for relationships. Event marketing, which includes trade shows, conferences and other special events, overwhelmingly is considered by sales and marketing executives to be the best vehicle for accelerating and deepening relationships with consumers or clients, according to "EventView 2009," a global study released this past February by the Event Marketing Institute, Meeting Professionals International and George P. Johnson. In North America, 53 percent of sales and marketing respondents said event marketing was the best for relationships, more than twice the number that chose "public relations," the second highest-ranked option.

Top return on investment. "EventView 2009" respondents also chose event marketing as the best driver of ROI (26 percent), beating out methods such as web marketing (20 percent), direct mail (13 percent), print advertising (15 percent), public relations (12 percent) and broadcast advertising (5 percent). Event marketing has ranked first for ROI in four of the last five years of this annual study; in 2005, event marketing ranked second, one percentage point behind web marketing. In the most recent study, of those who indicated event marketing provided the greatest ROI, more than 81 percent said that the value stemmed largely from face-to-face interaction.

A 2005 study from the CMO Council ("Staging & Gauging: Do Events Pay Off?") confirms the reliability of events to provide ROI. That survey found event marketing to be the second-best generator of ROI behind "direct response" (e-mail and mailings), which tends to be much less costly to produce.

Great for branding. Roughly 61 percent of marketers consider face-to-face exhibiting as the most effective means to build a brand image, according to 2007 research conducted by Forrester Consulting Services on behalf of American Business Media. Last year, additional research by Forrester ("B2B Marketers: Make Trade Shows Deliver Better Leads -- and Value," by Laura Ramos) showed that within the scope of event marketing, 45 percent of marketers consider trade shows "highly effective" at driving brand awareness, behind sponsorships (55 percent) and ahead of face-to-face executive events (37 percent).

Boost purchase intent. A meticulous study released last year by the Advertising Research Foundation ("Experiential Marketing: A Master of Engagement") determined that "active engagement" (in-person interaction) at trade shows has the most positive influence of any factor on "purchase intent" (the likelihood a person will purchase a product). Engagement boosts purchase intent by an average of 34 percent, according to the study, which also determined that purchase intent has a positive correlation with subsequently reported sales. In other words, face-to-face interaction significantly increases the likelihood of actual purchases, even among those who are already likely to purchase.

According to CEIR research released in 2003, nearly a third of attendees consider interaction at trade shows to be "extremely" or "very important" in making final purchase decisions. A separate CEIR study from 2004 reports that buyers consider "national trade shows" to be the most useful source of purchasing information, when considered with trade publications (which ranked second), sales calls, seminars, user groups and other forums.

Best for marketing. In February 2008, M&C published results of a survey of meeting industry suppliers who felt that face-to-face is the most effective way to market to meeting planners. Forty-three percent of suppliers said "in-person visits" was the most successful method, and 19 percent thought "trade shows/networking events" were best. Together, those who preferred face-to-face events far outnumbered those who preferred phone calls (13 percent), e-mails (8 percent), websites (8 percent) or direct mail (3 percent).

The most cost-effective leads. New research from CEIR, released in February, says identifying and meeting with potential customers is more cost-effective when using trade shows than other methods. The cost of identifying a potential customer is $215 per lead at trade shows and $443 using other means, the report found. Similarly, the study showed companies spend an average of $215 per lead at trade shows and $1,039 per lead using other techniques. More than 200 sales and marketing managers were polled, all with annual sales of $50 million or more.

Previously, CEIR reported that 88 percent of attendees said trade shows save them time by bringing a number of vendors under one roof; 62 percent went as far as to say trade shows save companies money by bringing buyers and sellers together.

Perceived value. Marketers like to keep tabs on what other marketers are doing. The CMO Council's latest survey of CMOs shows that 15 percent of marketing budgets are dedicated to trade shows, conferences and "experiential marketing." Only "database and direct marketing" (16 percent) and "sales collateral and literature" (15 percent) commanded a higher percentage of the marketing budget than trade shows and conferences (11 percent). The Trade Show Exhibitors Association's "2009 Exhibit Management Survey" reports that trade shows receive an even larger share of an organization's marketing dollars, about one-third of the overall budget.

The CMO Council report also noted that 63 percent of marketers expect to allocate the same amount of money to trade shows this year as they did in 2008, with 22 percent expecting an increase.

Workplace bene­fits. A wealth of re-search exists on general workplace management, including the positive effects that engagement, strong communication, clear objectives, accountability, and recognition have on employees and their contributions at work. These factors tend to lead to increased job satisfaction and productivity, which have been shown to increase an organization's profitability, according to a white paper, "The Value of Meetings," released in January by TBA Global, an international event marketing agency. Citing various studies from universities and business journals, the paper argues that meetings can help employers address some of their employees' most important issues, including gaining skills and knowledge.

Choose your battles
All of these arguments, by themselves, can only go so far, and without data confirming economic value, they remain only partial justification for the existence of a meeting or event.

And just because face-to-face meetings have value doesn't mean that companies or associations should exhibit at any or all events related to their business pursuits or continue to have meetings that can be replaced reasonably with alternatives. As Amex's Jouaneh notes, it is not a contradiction for executives to recognize the importance of face-to-face interaction while advocating to scale down involvement in trade shows or even cancel some internal meetings.

That's why industry sources warn planners to defend meetings judiciously while still seeking opportunities to cut costs. "It's hard to defend frivolous expenditures," says Ducate of CEIR. Planners will have to judge when it's appropriate to advocate for keeping a meeting and when to let a meeting go.

ASAE's Graham believes technology will continue to improve and will be an attractive permanent replacement for some meetings. But he also looks to the example of the pharmaceutical industry in predicting that technology solutions will hit a ceiling. Ten to 15 years ago, Graham says, the rise of mail-order drugs had pharmacies fretting that they would be run out of business. "The market grew, but then it stopped because people still wanted to go to the pharmacy," Graham says. "Meetings are similar. There will be people who only do online events. But most want face-to-face meetings or a mix of online and face-to-face.

"The implication," Graham continues, "is that you're going to be doing fewer meetings, but maybe there's opportunity there in terms of developing a skill set around how to enhance experiences online."

The task for meeting planners, as Graham sees it, is to defend meetings that should be defended while at the same time begin thinking about how to embrace a new, perhaps more virtual, definition of "meeting."