Every dollar invested in business travel yields $2.90 in profit. Adopting a smart travel strategy can help you hold the line on costs.
Video conference call or in-person meeting?
For most small businesses, opting for a free video conference call makes more financial sense than a pricey business trip.
But closing a major sales deal is also much easier in person than from the opposite side of the country, especially if you don’t have a strong existing relationship with the prospective client.
In-person meetings are also critical to building rapport, better understanding the challenges your prospective client faces, and better positioning your business to be the preferred solution provider.
So what’s a cash-strapped small business to do?
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The Case for Business Travel: Every $1 Invested in Travel Yields a $2.90 Profit
Tracking business travel ROI can be tricky, especially when it comes to correlating attendance at networking events with client sales. That said, studies show a clear link between the value of business travel investment and business profit. Following the 2009 recession, more than half of all businesses cut back on business travel. While these cutbacks may have been necessary to balance the books, eliminating business travel altogether can also backfire.
A 2013 study by Oxford Economics and the US Travel Association found that for every dollar invested in business travel, U.S. companies generated $9.50 in revenue and $2.90 in profit, reports USA Today. The study analyzed government data on 14 industries over an 18-year period. And more than half of 298 business travelers said that slashing travel budgets during the economic downturn likely hurt their company's long-term performance.
With oil prices falling to a record low, business travel is more affordable than it’s ever been, whether you’re renting a car or flying cross-country. Adopting a smart travel strategy can help you further hold the line on costs and maximize trip value. Follow these tips to minimize travel expenses in 2016:
1. Limit Overnight Stays
Yes, the pain of a 6 am flight is real– as is taking the last flight out at 11 pm. But by flying as early or late in the day as possible, you’ll maximize time on the ground and cut down on expensive hotel reservations. Plus, since these flights are at less desirable times, you’re more likely to score competitive flight prices. Make the most of your time on the ground by scheduling an early morning coffee meeting or post-work networking session.
2. Loyalty Pays Off
Corporate loyalty programs and discounts can add up to some pretty big savings, not to mention some nice perks! The American Airlines Business Extra Program is a complimentary business travel reward and incentive program designed specifically for small and mid-sized companies.
Your company earns points for any air travel while employees continue to earn their individual frequent flyer miles. Another popular reward program is the Business Advantage program offered through Intercontinental Hotels Group (IHG). Earn points for booking meeting rooms and other accommodations that can be redeemed for everything from free nights to shopping coupons.
3. Compare Airport Options
Don’t assume a city’s largest airport will always offer the most competitive flight deals; it truly depends on which airline you’re flying and where your business meetings will take place.
Have a meeting in New York City? A flight to Newark with an easy change to the NJTransit train straight into Penn Station could have you downtown for hundreds of dollars less than a flight to JFK followed by an expensive taxi or Uber ride into the city. Check out neighboring cities, too. Last-minute flights into Austin for SXSW are notoriously expensive, but flying to nearby San Antonio could easily save you several hundred dollars– and it’s just over an hour’s drive to Austin.
4. Skip Expensive Dinner Meetings and Post-Work Cocktails
Between the pricey entrees and the high-end bottles of wine, taking a client’s team out to a major dinner can add up quickly. Opt instead for a less expensive coffee or lunch meeting, and resist the urge to needlessly impress. (The client will care far more about your business acumen than your taste in French Bordeaux wine.)
Are you in town for a big meeting but want to catch up with other clients, too? Skip the post-work cocktails at the hotel bar (which can also get expensive) and instead, hold “office hours” at a nearby coffee shop or shared workspace. Invite current clients to drop by at their convenience throughout the afternoon.
Business travel doesn’t have to eat into your bottom line. When a video call simply won’t cut it, be savvy about booking cost-effective trips. Minimizing overnight while maximizing the impact of your time on the ground. Join a business rewards program and see the ROI on that travel add up even faster!