How do you determine whether to have a face to face meeting or a virtual conference with a customer?

My short answer is face to face is ideal and video conferencing should only be used if your customer has no possibility to meet you face to face.

My long answer is:
I can't stress how important it is to build a personal relationship with the customer. Your customer should feel like you are on their team to help them achieve their business goals and targets. In many cases this means you have to adapt to your customer's environment and spend time in their offices/premises. If I was working for a B2B company, I would want myself and/or my team to sit together with the customer's team in their premises for as long as possible. Once a customer realizes how well you understand their company and their business, they will be very reluctant to work with someone else.

No matter how good video conferencing gets it will always be a limitation to developing a better relationship/partnership with your customer. Video conferencing doesn't allow you to fully assess the mood of the customer or the "atmoshpere" of the meeting itself, which many experienced sales people will agree is vital when dealing with customers.

Having said all this, there are times where video conferencing can be useful. One example is if your customer's team is geographically distributed and can not meet f2f due to short notice or urgent issues. I have seen cases where clients use video conferencing to demo their products or services for their customer from remote locations.

I prefer f2f every time and video conferencing is only a second choice when f2f isn't possible.