Almost 6 in 10 B2B companies (57%) in the US have reduced their marketing spend as a result of the coronavirus outbreak, according to a McKinsey study of 3,600 B2B decision-makers. But the changes to the B2B model are more significant and potentially longer-lasting than just a fall in marketing budgets.
With social distancing in place and many professionals working from home, there has been a need to change how companies connect with their buyers, primarily through the use of more digital communication methods. Most of those surveyed believe these changes will stick for 12 months or more, with 8 in 10 (79%) responding that their new commercial and go-to-market models are either very likely (32%) or somewhat likely (47%) to be sustained.
Indeed, it appears that the changes are paying off. As of April 27 (the closing date of the most recent survey), about two-thirds (65%) of respondents said that their new sales model was at least as effective as it their model was prior to COVID-19.
What Changes Have Occurred in Sales Models?
As would be expected, far fewer B2B companies are using in-person or field sales teams. Before the crisis, close to 6 in 10 (57%) sold in this manner. But since the outbreak of COVID-19, that figure is now just 1 in 5 (20%).
There’s also been a drop in the use of inside sales, which is somewhat surprising as these are remote interactions. Half of firms (50%) used this channel before the crisis, but now only 39% report doing so.
Instead, there has been a rise in online and self-serve interactions. The use of online/web support (e.g. chatting with customers via video/website/mobile app) has risen from 63% to 73%, while the adoption of e-commerce (direct sales without the involvement of a sales rep) has increased slightly by 47% to 50%.
As such, e-commerce is accounting for a greater share of revenues: among those firms that sell online, e-commerce has been responsible for 52% of revenues during the COVID-19 pandemic, up from 40% prior to COVID-19.
Preference for B2B E-Commerce and Self-Service Rises Significantly
Even before COVID-19, B2B e-commerce sales were rising. Forrester Research previously forecasted that e-commerce would account for one-eighth of US B2B sales this year. Backing this trend, a study by Accenture showed that B2B buyers were already increasing both their average number of items per e-commerce purchase and their average order values. Data from Episerver also indicates that B2B buyers cite self-service functionality as the second-most important factor in how vendor sites can improve.
Data from McKinsey’s study backs this up. When asked to choose their top three methods for purchasing goods and services, the self-serve option of using a mobile app was cited 3x as often this year (37%) as in 2019 (11%). By contrast, preferred methods that have tumbled include calling a sales rep (from 53% to 33% y-o-y) and ordering from a sales rep in person (47% to 27%).
At the research stage, B2B buyers are now much more likely to prefer live chat, which has now been cited as a top-3 option by 30% of buyers, up from 16%. By contrast, trade shows have fallen as a preferred option from 22% last year to 10% this year.
In allocating 100 points to digital or traditional, B2B buyers surveyed April 27 weighted the importance levels on almost 2:1 basis to digital (65:35), as opposed to before COVID-19 when the digital to traditional weighting was almost equal (47:53).
The rest of the survey data can be viewed online here.
About the Data: Figures are based on the McKinsey COVID-19 B2B Decision Maker Pulse conducted April 20-27. Some 3,600 B2B buyers are surveyed every three weeks.