Can "High Tech" Displace "High Touch," or Does Virtual Drive Face-to-Face?

It should be obvious that what matters for businesses are outcomes, not inputs and activities: the financial bottom line (despite other stakeholder interests). Jobs, highly-desired quality products, sustainable environmental operations, employee benefits, contributions to economic vitality and other desirable outcomes cannot be obtained unless firms are sustainable financially. 

Also, some firms have a business model that benefits from remote work. Cloud services providers, PC manufacturers, connectivity companies generally and software firms whose products enhance remote work provide examples. 

So maybe we should not be surprised that Dell Technologies argues “COVID-19 has made one thing clear to us: work is something you do, an outcome, not a place or a time,” says Jeff Clarke, Dell Technologies COO. 

While the pandemic didn't start the remote work trend--it has been growing for 40 years, Covid-19 has shown its value, and almost certainly accelerates the trend. 

“Here at Dell, we expect, on an ongoing basis, that 60 percent of our workforce will stay remote or have a hybrid schedule where they work from home mostly and come into the office one or two days a week,” says Clarke. 

Such proclamations tend to convince observers that demand for other products, ranging from airline tickets to hotel stays, must inevitably suffer. And, to be sure, some period of lower demand likely will occur. 

But high tech drives high touch. virtual also drives more demand for face-to-face interactions.  That is a 40-year trend. This perhaps matters most for business-to-business sales professionals, who must establish trust with potential new clients. Eventually, when there is no medical bar to doing so, a renewed push for face-to-face contact will reassert itself, even if--and because of--high tech virtual replacements. 

"High Tech, High Touch" Patterns Will Return

The prevailing wisdom about business life after Covid-19 often is that “nothing will be the same.” In place of “high touch” face-to-face meetings, businesses are going to substitute “high tech” virtual sales and marketing. That might happen, to a significant and permanent degree. 

At the same time, firms are going to rediscover the value of face-to-face, “high touch” activities, perhaps to the same degree as they shift to virtual “high tech” operations. It has been a 40-year trend. 

Some of us remember a 1982 book called Megatrends by futurist John Naisbitt that popularized the phrase “high tech, high touch” to describe a coming trend: that as we began to use more technology, we would equally appreciate “high touch” human or non-technological interactions. He explored how that had evolved in his follow-on book High Tech, High Touch. 

Here’s the important insight into post-Covid-19 business behavior: High-touch refers to the human and emotional aspects of business interactions, including the establishment of trust. 

Virtual support can be quite effective once a business relationship and trust have been established. But it arguably will be harder to create trust with a new prospect using only “high tech” tools. 

High-touch refers to close relationships with customers, interacting with people, not just machines.  To be sure, that arguably can be done, up to a point, virtually. But high-touch also arguably requires above-average interaction with customers, and that includes face-to-face contact. 

High touch--helping customers on a human level through various stages of the buying process and lifecycle--involves a much higher participation, and usually relies on one individual or team within the company to maintain direct, personal and frequent contact with accounts, says ESG. 

“Humans crave the kind of interaction that only other humans can provide,” and likely cannot always be provided by conferencing tools. 

It’s one that places the priority on human interaction and human relationships, not on efficiency or speed. That is why travel services emphasize both touch and tech. 

“In a high tech world, people are longing for balance,” notes EHL Insights. As important as technology has become for customer experience and support, “authenticity” and “emotion” also are emphasized. There is an analogy for business-to-business sales as well. 

This “reversion to mean” happens quite often. Right now, professionals now rely on videoconferencing to supplant face-to-face meetings because nothing else is possible. But after the pandemic ends, prior trends will reassert themselves.

That has proven to be true for industries and economies in recoveries from major economic disruptions in the recent past. 

If evidence from three past global recessions--but not the Great Recession of 2008 and the Great Cessation of 2020--provide any useful insight, the recovery might take between three and 4.5 years, perhaps three years for public companies, perhaps 4.5 years for the overall economy. 

Some 17 percent of public  firms will not survive. That is the percentage of public firms that went bankrupt, were acquired, or became private, in the aftermath of the Great Recession. 

About 80 percent of the survivors had not yet regained their pre-recession growth rates for sales and profits three years after a recession. 

About 40 percent of the firms had not returned to their absolute pre-recession sales and profits levels after three years. 

Ranjay Gulati, Harvard Business School professor and Nitin Nohria, Harvard Business School dean, conducted a study in 2010 of corporate performance during three global recessions: the 1980 crisis (which lasted from 1980 to 1982), the 1990 slowdown (1990 to 1991), and the 2000 bust (2000 to 2002). 

Obviously, the two big events missing from the study, because of the timing, were the Great Recession of 2008 and the current “Great Cessation” of 2020. Still, their findings are useful for charting the likely path of recovery after the Covid-19 pandemic recedes into history.

They studied 4,700 public companies, breaking down the data into three periods: the three years before a recession, the three years after, and the recession years themselves. 

At a macroeconomic level, the U.S. economy had not recovered its pre-2008 levels by 2011, three years after the Great Great Recession of 2008. 

source: Bureau of Economic Analysis

U.S. growth rates returned to 2007 levels about 4.5 years after the Great Recession. Latin America and some Asian countries bounced back really fast, in about 1.5 years.

So if the recovery from the Great Cessation follows the Great Recession pattern, it will take about four years for gross national product to return to 2019 levels. 

The impact on household wealth was starker, as median household net worth still had not reached 2007 levels by 2018, 10 years after the Great Recession. Job levels in the United States had returned to 2007 levels by 2014 (about six years after the Great Recession). 

Still, prior trends reasserted themselves. That is likely to happen with face-to-face “high touch” sales in the business-to-business markets as well. It might take some time, but it is almost certainly going to happen. 

Newtonian Technology Trends Post-Covid

Twenty years ago, futurist John Naisbitt wrote High Tech/High Touch, an examination of technology and a follow-on to his 1982 book Megatrends. It was Megatrends which predicted that people immersed in technology would be driven to seek human contact. 

High Tech/High Touch essentially concluded that the trend remains intact, shown in the prominence of both consumer technology markets and products, services and markets that offer escape from technology.

As the Covid-19 pandemic wears on, increasing our reliance on technology and restricting human contact, Naisbitt’s observations still hold. The more we are now forced to use technology, the more important will actual “high touch” matter. 

source: Megatrends

It is almost Newtonian: for every action there is an equal and opposite reaction. Kept indoors, demand for outdoor activities has grown significantly. Forced not to travel, people will want to travel. Required to interact virtually, people will want face-to-face encounters. 

The conventional wisdom that “everything has changed” suggests disruptive change in work and living habits that are permanent. That likely will prove to be a one-sided analysis. 

Post-pandemic behavior might be more unexpected than is commonly suspected, for several reasons. First, linear extrapolation from the present nearly always proves wrong. Non-linear change is more likely, an argument the “everything has changed” view also suggests.

But non-linearity cuts both ways. We might well see non-linear regression to the mean, as well as accelerated change of behavior. 

Many trends that already were underway before the pandemic  will be accelerated to an extent, though not nearly so much as many seem to believe. Naisbitt’s observations suggest why: to the extent we continue to work remotely, more often, we also are going to want and desire face-to-face contact. Unable to freely travel, humans will want to do so again. 

Zoom is not a perfect, or nearly perfect substitute for face-to-face interactions. People will want to get away from their screens, to the extent they are forced to rely on them. 

The Newtonian reaction to high tech will be high touch. 

Can Videoconferencing Replace In-Person Sales Meetings? When?

With videoconferencing, “a face-to-face meeting is no longer the same thing as an in-person meeting,” notes Express Virtual Meetings. Few would disagree with that assessment, as the Covid-19 pandemic limits in-person business-to-business meetings. 

What remains to be seen is how behavior persists once the threat of the pandemic recedes from memory. The question is likely not whether use of videoconferencing grows, and is used at a higher rate than in the past. Many would argue usage has been growing steadily for a couple of decades.

The bigger question is how much usage will remain when the “next best thing to being in person” is not absolutely required, when in-person activities are possible again. 

For better or worse, sales, training, education, customer support and internal organization meeting activities that once were conducted face to face now are, at least temporarily, going to be conducted by substitute means, perhaps often by videoconferencing. 

Almost every organization will find that videoconferencing is a necessary substitute for collaboration when travel is not possible or recommended. Some might even go so far as to argue that trade shows and in-person conferences will often not be possible in the future. That will be quite challenging, if it happens at any significant level, for many sales professionals in any business-to-business markets. 

source: Drift

The issues are especially pointed for sales professionals selling business to business, which traditionally has required face to face meetings, not so much for technical presentations or customer support, but to build trust and rapport when a substantial purchase has to be made. 

As always, correlation is not necessarily causation, as when it is argued that closed deals are higher when videoconferencing is used at some point in the sales process. It might be that firms using videoconferencing routinely also have better sales prospecting, development and support processes in general, including use of video support. 

“At the very beginning of a business relationship, it can be beneficial to meet in person in order to create a strong basis for an ongoing relationship,” says Express Virtual Meetings. 

“Touch builds trust,” says René Shimada Siegel, president and founder of High Tech Connect. “That’s why job interviews and project pitches generally need to be done in person.” 

“In-person business meetings let attendees develop transparency and trust in ways that are not always possible with other forms of communications,” says Dr. Richard D. Arvey, a psychologist and professor with the National University of Singapore. 

One member of a corporate team wrote in an online forum that although her team had held many virtual meetings and work sessions, she only felt truly comfortable with the other team members after finally meeting them face-to-face. She said her deadlines now take on greater importance for her, because the project is no longer just a voice on Skype or a person writing an email — but a friend and colleague who is now real to her.

Given that both videoconferencing and face to face meetings have advantages, “the first stages of an engagement or project should be handled by face to face meetings, so the most important details can be discussed and then follow up meetings can be done virtually ,” argues
EZTalks. “The final meeting should also be done in person.”

While better than audio conferencing or email, even videoconferencing is “not as good as in-person communication” for many meetings,  argues Scott Edinger is the founder of Edinger Consulting Group. 

But it is logical to assume that curtailing face to face meetings and trade show attendance will cause softness in the pipeline, despite vigorous efforts to use videoconferencing as a substitute for face-to-face meetings. 

That is likely going to be an issue for business-to-business sales in a variety of industries ranging from pharmaceutical sales to network capacity sales. 

It might be logical to argue that videoconferencing will eventually be seen as more effective for internal functions; less effective for garnering new business; more effective as a retention tool. One study of Norwegian travelers shows the heavy use of videoconferencing for internal organization communications or information exchange. 

Face-to-face meetings were more often used for conferences, seminars or education, as well as project work. 

source: Researchgate 

“One sales leader has directed his sales force to divert all attention to existing accounts and stop pursuit of new logos,” said Randy Illig, FranklinCovey global leader of the sales performance practice. His thinking is simple: trust is required when a customer has to choose between suppliers. 

“And it's going to be hard to establish trust during this time with somebody you don't know,” said Illig. 

And though it is too soon to predict whether such trends will remain in place once the pandemic is over, there is at least some reason to believe that physical face to face meetings will return. 

A study by Oxford Economics found that  85 percent of corporate executives perceive web meetings and teleconferences to be less effective than in-person meetings with prospective customers, while 63 percent believe virtual meetings to be less effective than in-person meetings with current customers. 

That does not necessarily mean such attitudes are correct, or unchangeable. But not many would likely argue that videoconferencing is a full and effective substitute for face to face sales activities. 

source: Oxford Economics

Face-to-face requests are 34 times more likely to result in a donation to a cause than sending an email request, two researchers find. With the caveat that a firm such as Virgin and the U.S. Travel Association have a vested interest in getting business people to invest in travel, 28 percent of executives and business travelers believe they would lose 28 percent of their current business if prevented from face-to-face meetings. 

And with the caveat that some “face to face” interactions can be conducted using videoconferencing, “more than half of business travelers stated that five percent to -20 percent of their company’s new customers were the result of trade show participation, according to the U.S. Travel Association, citing a study conducted by Oxford Economics. 

source: Oxford Economics

There is no contradiction between growth of videoconferencing in business-to-business sales processes, at least for the next several years, when there are likely to be strong pressures to limit in-person interactions, and in-person meetings. 

Logic suggests videoconferencing will be most valuable for retaining clients, while in-person meetings will be vital for getting new clients.  “You can’t really trade travel for face to face communication,” says Vyopta. “If you could, cell phones, email, digital cameras, computers, and the internet would have all reduced travel drastically by now, but instead, we’ve seen a steady increase in all types of travel.”

“Travel is the ultimate way to connect, and that will probably never change, especially for business,” Vyopta argues. 

An existing customer already has a level of necessary trust. That will not be so easy with new potential clients.