Skip the trip: Web conferencing booms

Online conferencing can slash your travel budget and even goose sales - if you pick the right service.

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(Fortune Small Business) -- Alan Minton, vice president of Cornerstone Information Systems, was hardly opposed to taking business trips. After all, travel is part of his core business. Cornerstone, a 70-employee firm based in Bloomington, Ind., makes automation software for the travel industry.

But in March 2005, Minton embarked on a disastrous four-day sales trip to San Francisco. One potential client canceled at the last minute. Another sent representatives who weren't empowered to make buying decisions. At his final meeting Minton was peppered with the kinds of technical questions that his IT guy could have handled easily - except that his IT guy was back in Indiana.

That unproductive trip got Minton thinking. What if he used conferencing software to meet and vet potential clients over the Internet before he ever stepped on a plane?

"I'm not trying to eliminate my trips," he says. "I'm just trying to make them more productive."

For little more than $500 a year, online meeting software has done just that. Cornerstone's travel budget has been slashed in half, while its revenue has grown by a healthy 30% each year for the past three years, to $50 million annually. Minton attributes part of that growth to meeting prospective clients online. He says the software has shortened Cornerstone's sales cycle by 30% - no small deal considering that the firm's average sale is $30,000.

Online meeting services have been around for more than a decade. The basic concept hasn't changed much: Using Webcam-enabled computers and phones, dozens of users can see and chat with one another, share documents in real time, type messages to the whole group or a few individuals, and write on a shared virtual whiteboard.

At first, services such as WebEx were clunky, expensive and difficult to install. But in recent years prices have dropped, bandwidth has broadened, and the services have started to live up to their promise. The Web conferencing industry grew by 19% in 2008, topping $1.1 billion in sales, according to research firm Frost & Sullivan.

"Online meetings have become a key money saver for a growing number of small businesses that are trying to cut travel budgets," says Frost & Sullivan analyst Roopam Jain. And no wonder: Even with the economy in free fall, the average price of a domestic round-trip airplane ticket is expected to increase this year by 2.8%, to $1,139.

The cost and quality of online meeting services vary wildly. At the low end, companies such as Yugma.com and Dimdim.com offer basic Web conferencing for free. On Dimdim you can text chat, share slides, whiteboard, documents and web pages and record your call. To share your desktop, however, you must download software. For $99 a year, you can do two-way video chats and get custom branded meeting rooms.

The most popular online meeting services, GoToMeeting (owned by Citrix Online (CTXS)), WebEx (now owned by Cisco (CSCO, Fortune 500)) and Premiere Global Services' Netspoke, offer comprehensive packages for $40 to $60 a month. GoToMeeting's revenues grew nearly 70% in 2007, Citrix says, largely thanks to a wave of new small business customers. Premiere Global says Netspoke sales rose 20% in 2008.

Nearly all these services offer free trials - and Cornerstone learned the hard way to try before buying. "It's critical that a tool like this doesn't fail," Minton says. The first online meeting service he signed up for, WebEx, froze up during client meetings. Customers tended to assume that Cornerstone's own software had gone awry, not that of the Web conferencing system used to display it.

Minton eventually settled on GoToMeeting, a $49-a-month all-you-can-meet service. Up to 15 users share PowerPoint presentations, Web pages and just about any document on the meeting organizer's desktop. Voice service can be supplied by phone or computer microphone at no extra charge. Control of the cursor, the virtual equivalent of having the floor, can be passed among participants like a conch shell.

"You can identify issues that people wouldn't normally think about," Minton raves. "You can get everyone brainstorming at the same time."

Last year, Cornerstone opened up a satellite office in Bangalore, India. At the same time, the company upgraded to Citrix's GoToWebinar, a $99-a-month service that accommodates as many as 1,000 users in one meeting.

Citrix markets GoToWebinar less as a collaborative tool than as a "virtual auditorium" for training or marketing purposes. GoToWebinar's extra features include the ability to poll the audience during the presentation and take surveys immediately afterward. Minton's favorite feature: The software monitors his audience's attention span and alerts him whenever users start doing other, unrelated tasks on their computers.

"I use it to try to be more relevant, entertaining and interesting," he says.

Finding the right system

As with any software, the bells and whistles can get in your way. At Boston Engineering Corp., a 35-employee firm in Waltham, Mass., project manager Richard Savoie tried various Web conferencing services before settling on LiveMeeting by Microsoft (MSFT, Fortune 500). Because LiveMeeting costs just $4.58 a month per user, it can be a real bargain for very small firms. But Savoie has seen meetings tank because new users got confused, demo videos didn't work, Webcam features crashed the system, and calendar invitation times got mixed up.

"My advice is to practice with these tools in advance," he says. "You can really get egg on your face if you don't know how to use them."

It often makes sense to supplement virtual meetings with physical ones. Take a Cambridge, Mass., company called ChoiceStream, which helps retailers make online product recommendations to their customers. Last year, ChoiceStream signed a million-dollar contract with a major customer in the U.K. ChoiceStream was using a $2,000-a-month online meeting service called Intercall, but switched to GoToMeeting after Intercall crashed about a dozen times during client meetings.

Sealing the deal required six sales trips to London at $15,000 a pop. ChoiceStream's limited travel budget could stretch no further. And even six trips would have proved insufficient had ChoiceStream's three-person sales team not followed up each trip with an online meeting. Doug May, ChoiceStream's vice president of sales, suggests a fifty-fifty split between virtual and real meetings.

"This deal would not have happened without online meeting software," he says. "But Web conferencing will never replace getting in front of customers and looking them in the eye."

Clarification: This story has been updated to more accurately describe Dimdim's services.  To top of page

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