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.
Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.