There does not appear to be a big rush back to business travel after the pandemic, with demand remaining below the $1.4 trillion commercial spend through 2025, according to the Global Business Travelers Association (GBTA). Only 27% of US companies expect to be spending money on travel over the next six months.
A Fortune Analytics survey found that only 67% of business professionals that traveled for work pre-pandemic plan to resume previous levels.
These results line up with the stated trend towards Work from Anywhere (WFH), with companies no longer looking to maintain traditional five-day-a-week office settings. A January Deloitte survey found that 75% of CEOs are considering reducing their commercial space requirements.
Companies have learned how to coordinate activities internally and with customers and partners digitally. The need to press the flesh doesn’t seem as vital as it did pre-pandemic.
“The outcomes of meetings held on Zoom vs. those held in person are not that much different, but the costs are night-and-day different,” said Richard Curtin, director of the University of Michigan Survey of Consumers. “It will be hard to justify the costs that were once supported.”
Management Consultancy Oliver Wyman contends that business professionals have found video conferencing and other digital communications tools to be sufficient in maintaining commercial relationships.
The GBTA noted that the pandemic’s impact was ten-times that of 9-11 and the 2008 financial crisis. After those events, there were also concerns that commercial travel wouldn’t bounce back, but digital channels are much more mature now, and the extended WFH time has normalized video conferencing.
It’s “our expectation that business travel will lag consumer travel,” said Jeff Campbell, CFO of American Express Co., on an earnings call.
Amazon, which spent $1 billion on travel annually, commented that its “sales teams found new ways to reach customers.”
Forrester Principal Analyst Peter Ostrow suggests that initially, there will be pent-up demand for business travel as individuals yearn to get out of the house. Still, he cautions that this should be a temporary burst, not a return to pre-pandemic travel volume. Companies should ask three questions for determining the appropriate volume and rationales for travel:
- What do Buyers and Customers Prefer? Not every meeting, particularly those involving disparate buying team members, should be face-to-face. B2B Sales should recognize that B2B purchasing has adapted over the past year as well.
- How Have We Made Things Work Remotely? “Sales leaders must determine what adaptations have supported more productive sales motions, rep productivity, adoption of top-down initiatives, and desired changes in seller behavior.” Being remote has allowed reps to develop new remote selling skills (e.g., prospecting, presentation) that should be retained. Likewise, CROs should consider whether SDRs should be centralized, or are they better off not commuting each day? Be careful not to let the voices of those underperformed during WFH drown out those reps who have excelled in the new environment.
- What Does the Data Say? Review the data and determine which personas were more or less accessible during WFH, which pipeline stages were faster or slower during WFH, and which product lines suffered due to the loss of in-person pitches.
Failing to address these questions could result in the loss of many of the digital efficiency gains that have sustained B2B sales over the past year.
In short, Ostrow suggests that research and data guide travel decision-making. Just as companies are re-evaluating the need for centralized offices vs. hybrid models or fully remote staffing, travel decisions should be re-evaluated as well. Field Sales and weekly exhibitions in different cities have always been expensive propositions. The focus should be on adopting the most effective interactions, whether remote or face-to-face, for driving long-term revenue growth.
Remote work also has a demographic impact, with professionals decamping from New York, Seattle, San Jose, and San Francisco for Miami, Austin, Charlotte, Nashville, and Denver. There are even a set of “Zoom Towns” such as Boulder, CO, Tulsa, OK, and the Hudson Valley (NY) benefiting from in-migration.
“The rise of remote work changes that equation [between work and home locations]—not in all sectors of the economy but in more than ever before. Skilled techies and knowledge workers, in particular, can enjoy the kind of freedom and flexibility that used to be available only to successful novelists, artists and inventors—the ability to work when and where they want to. They can increasingly “vote with their feet,” selecting the kinds of places that best meet their needs without worrying about what they can earn in the local labor market. Families may gravitate to smaller cities, updated suburbs or rural areas with outdoor amenities, while ambitious young professionals fresh out of college or graduate school are likely to continue flocking to urban centers for entry-level jobs and social life.”Richard Florida and Adam Ozimek, “How Remote Work Is Reshaping America’s Urban Geography,” Wall Street Journal (March 5, 2011)
And WFH has not been a productivity loss, but a net positive as workers are no longer saddled with long commutes and water cooler chitchat. Stanford University economist Nick Bloom found as much as a 2.5% productivity lift from remote work.
According to Outreach CEO Manny Medina, 70 to 80% of buyers want a digital experience.
From a sales and marketing perspective, many of the digital practices that boosted SalesTech and MarTech industry revenues over the past year are likely to continue. There will still be field sales reps calling on top prospects, but there will be more video conferencing and fewer face-to-face meetings than before. Likewise, tradeshows and user conferences are likely to be smaller or operate more as roadshows rather than large events. Tent pole events, such as Dreamforce, will return, but less popular events may downsize or remain virtual. And even the tent-poles are likely to be hybrid events. For example, Dreamforce has always recorded and posted its sessions for virtual viewing, so will likely combine live and digital best practices at future events.