McKinsey: How COVID-19 has changed B2B sales forever
While governments and organisations still work to contain COVID-19 and stem the growing humanitarian toll that it is exacting, the effects on customer behaviours are rippling across the B2B landscape. The pandemic has forced a dramatic increase in digital adoption. The revolution of B2B buyers and sellers whole-heartedly embracing digital has presented a massive opportunity for B2B organisations.
McKinsey has been decision makers globally across industry since the crisis began. What we have discovered in our recent research on decision makers’ behaviour globally across industries is that the big digital shift is here to stay.
Digital is overwhelmingly what B2B buyers and sellers prefer
Although the abrupt pivot to digital sales in the early stages of the pandemic may have caught some B2B organisations off guard, in the months since, decision makers have become steady converts. More than three quarters of buyers and sellers say they now prefer digital self-serve and remote-human engagement over face-to-face interactions. This pattern held true for SMB and enterprise decision makers alike—with the level of acceptance rising steadily since April 2020.
Safety is one reason, of course. But self-serve and remote interactions have made it easier for buyers to get information, place orders and arrange service. And customers have enjoyed that speed and convenience. Only about 20 percent of B2B buyers say they hope to return to in-person sales, even in sectors where field sales models have traditionally dominated, such as pharma and medical products.
Far from a local phenomenon, decision makers worldwide have embraced the shift to digital and remote engagement. From being “forced” to adopt digital in reaction to the widespread COVID-19 shutdowns in the early stages, B2B sales leaders are only becoming more convinced that digital is the way to go.
Customers are buying big online
The most notable sign that digital sales have come of age is the comfort B2B buyers have with making large purchases online—whether for new products or reorders. The prevailing wisdom used to be that e-commerce was mainly for smaller-ticket items and fast-moving parts. Not so anymore. Notably, 70 percent of B2B decision makers say they are open to making new purchases in excess of $50K in a fully self-serve or remote fashion, and 27 percent would spend more than $500K.
B2B decision makers globally say that online and remote sales are as—or even more—effective than in-person engagement. It’s not just selling to warm leads either. Sellers believe digital prospecting is as effective as using in-person meetings to connect with existing customers. And according to our survey respondents, these pandemic-induced patterns are likely to become permanent. Close to nine in ten decision makers say that new commercial and go-to-market sales practices will be a fixture throughout 2021 and possibly beyond.
New ways of working can drive exponential performance
What started out as a crisis response, has now become the next normal with big implications for how buyers and sellers will do business in the future and the dramatic increase in digital adoption presents seminal opportunities for B2B players:
- Lower cost-per-visit: For instance, it’s faster and easier for reps to organise digital demos than travel to specific locations. Less time on the road means more time in front of customers, which data show translates to more sales.
- Extended reach: Untethering reps from specific territories or verticals can allow organisations to prospect more broadly, giving them greater scale and flexibility to serve new markets more effectively.
- Flex the talent base: If selling can be done from home, new geographic pools of talent are now open, allowing organisations to tap retirees, stay-at-home parents and other non-traditional profiles to augment their staffing.
- Innovation: Smarter resource allocation can lead to smarter customer solutions. It’s far more feasible for B2Bs to bring a “dream team” of product specialists, solution architects and other subject matter experts together in virtual settings than it is to coordinate travel. In addition, digital interactions also leave a data trail that’s easier to capture and share than is true for notes and debriefs from the field. Those insights can be pooled with other customer and market data to help feed sales analytics, surface important buying patterns and behaviours and drive ROI.
Ultimately, while the opportunity is significant, so is the pressure to capitalise upon it. The acceleration of digital adoption has raised the stakes. Some B2B leaders will seek to exit the crisis period at “PE speed,” digitising their go-to-market models in order to optimise their revenue and cost structure. And those innovators that take that approach should derive competitive advantage by gaining more customers and a greater share of loyalty.