B2B Sales Just as Effective When Remote? Really?

A survey of business-to-business executives by McKinsey has found that virtually all firms in the B2B space have adapted to Covid-19 pandemic “stay at home” rules by shifting to online support and e-commerce, while dramatically shrinking in-person sales. 

Over a few months, 60 percent to 70 percent of those executives say they believe remote sales are just as effective as the former in-person sales methods. 

That might shock you. “Remote selling” is 60 percent to 70 percent “just as effective” as in-person selling? 

source: McKinsey

Maybe not. 

If they really believed that remote sales truly were “just as effective” as in-person sales, the percentage of respondents who believe they are “very likely” to  be doing so a year after the end of the pandemic restrictions would not be half, or less than half, of those same respondents. 

B2B Executive Views on Remote Selling
source: McKinsey
Country	% Remote	% "Just as Effective"	% Very Likely to Keep 1 Yr. Afer	% Somewhat Likely to Keep 1 Yr. After
Asia Pacific	96	70	35	48
Japan	93	68	18	45
United States	96	65	32	47
China	98	70	30	61
Europe	97	60	28	50
Global	96	64	32	48

source: McKinsey

Keep in mind that intentions in such surveys often do not match actual behavior, no matter how sincerely opinions might be held. 

At least in part, even respondents reporting they are “very likely” to continue with “remote” go to market strategies after the pandemic is over might be thinking of e-commerce and online support activities, not direct sales. 

I might very well be wrong, but a “new normal” where B2B sales activities are not conducted face to face seems highly unlikely. 

In other realms, such as after sales customer support, online delivery does make sense, and likely will continue at a higher level than before.

In other areas, internal meetings, training and routine support operations are likely to continue using newer forms of remote communication, if not always significantly higher levels of remote communication. 

That scenario likely hinges on a permanent shift to remote work at significant scale, and that is likely not to be as robust a trend as many expect.

Fixed Networks Bore Most of the Stay-at-Home Traffic Increase, Says Ericsson

Most of the 20 percent to 100 percent increase in network traffic caused by lock down policies was handled by the fixed networks, says Ericsson. Mobile network traffic increased 10 percent to 20 percent. 

source: Ericsson

As you might expect, given the stay-at-home orders, use of some apps related to mobility saw less usage. Travel and booking app activity was down about 33 percent, while ride hailing app usage dipped a bit more than 20 percent, Ericsson says. 

Use of location apps dipped about 22 percent. Use of parking apps declined about 13 percent.

As you might also guess, use of some apps related to people staying at home grew. Remote working app usage increased about 30 percent, for example. Use of instant messaging grew about 53 percent; use of social media about 50 percent. Use of news and video apps also grew more than 40 percent. 

source: Ericsson

Rural Internet Program Politics

The U.S. Federal Communications Commission’s rural broadband funding program, the 

Rural Digital Opportunity Fund, is pretty much technology neutral. What it arguably is not so much is supplier neutral, even if such programs have become more neutral over time. 

Even if the regulations do not specify it, all rural support programs historically have favored rural fixed network telcos who are carriers of last resort. 

The assumptions for the subsidies are sound enough. Since there actually is no sustainable business case for fixed network communications in many rural areas, the only way service will be provided is by use of subsidies. 

But the need for subsidies does not, in and of itself, explain why most of the funding has traditionally gone to rural fixed network telcos, even if the obvious answer was that, in the monopoly era, there was only one firm to which such funds might have been given.

That has changed over time, as other platforms have emerged. 

When voice was the issue, mobile networks arguably would have been capable. In the broadband era, cable TV companies are obvious suppliers, and many fixed wireless or new alternatives such as low earth orbit satellite firms will eventually emerge as potential suppliers as well.

You can assume the funding decisions will not--as a political matter--be based strictly on which platforms can deliver suitable broadband access. There is a requirement to supply voice services, which many internet service providers might prefer not to do. There are some regulatory oversight conditions cable TV or other smaller independent companies might shy away from. 

And then there are the non-network issues. Most rural telcos are “significant” providers of local jobs and have significant political support in states. Nor is it clear those businesses are sustainable without direct subsidies, where others might well survive without the funds. Mobile operators, wireless ISPs and cable TV operators might have a business case without subsidies. 

Some argue the past programs have not worked, or might not actually be needed as much as often is claimed. Perhaps 60 percent of high-cost funds support corporate overhead, not the expansion of networks. And since funding is based on “high costs,” applicants have incentives to keep their costs high. 

The need for subsidies and societal value is clear enough. The politics of funding arguably are also clear. Carriers of last resort arguably will carry some political weight that is not reflected in funding criteria in a direct sense. 

Publisher or Platform? Or Both?

Some issues--including network neutrality and regulation of publishers and platforms--are nettlesome and complicated, as much as we might prefer absolute simplicity. In part, that is because new platforms and industries do not conform neatly to our prior models. 

Platforms might be likened to common carrier products: all users are treated the same way, at standard prices, terms and conditions. The platform makes publishing possible, as formal common carrier networks simply “transport” products, but do not exercise editorial control, as do publishers of newspapers, for example. 

But big content platforms no longer operate as pure platforms. They also exercise content moderation and make choices about what gets published, under the guise of community moderation. That makes them publishers more akin to newspapers or magazines. 

That is why the debate over Section 230 of the Communications Decency Act is important.  Title V of the Telecommunications Act of 1996 was intended to protect platforms from content posted by platform users, exempting the platforms from laws pertaining to other publishers. On the other hand, platforms claim the right to censor and remove content under the rubric of community standards. 

But there arguably is a crucial difference between “offensive” speech and “political” speech. Most people might agree that bans on obscenity or violence are one thing, but restrictions on clearly political speech are questionable. 

Nor is it easy to apply First Amendment protected speech rules, which classically protect speakers from government restrictions, not listeners and readers from private company restrictions. 

On the other hand, “while the First Amendment generally does not apply to private companies, the Supreme Court has held it ‘does not disable the government from taking steps to ensure that private interests not restrict’ . . . the free flow of information and ideas,”  say Adam Candeub, law professor at Michigan State University, and Mark Epstein, antitrust attorney. 

We do not yet have good models for regulating such hybrid industries. But that is likely to change, as regulation changed with the emergence of over the air broadcasting and then cable TV, with a hybrid model not fully in the realm of either common carrier nor unregulated publishing. 

As platforms become a mix of content delivery (platform) and curated and created speech (publisher), some new hybrid form of regulation is likely to emerge and evolve, given a government interest in fostering open and fair debate where it comes to political speech. That was the approach taken with broadcasting, for example. 

Less Change Than You Think, Early On; More than You Expect Later

It is not hard to find projections that the Covid-19 pandemic will create a new normal that radically reshapes key elements of life and work. One might note similar projections about 5G, artificial intelligence, virtual reality, edge computing, unmanned vehicles or internet of things. 

History and science suggest we ought to be cautious about early levels of change, but also remain open to greater than expected long term changes. 

There is a bit of business wisdom that argues we overestimate what can be done near term, but underestimate the long term impact of important technologies or trends. The reason is that so many trends are an S curve or Sigmoid function. 

Complex system learning curves are especially likely to be characterized by the sigmoid function, since complex systems require that many different processes, actions, habits,  infrastructure and incentives be aligned before an innovation can provide clear benefit. 

source: Rocrastination 

One practical implication of the S curve or Sigmoid function is that the search for the next wave of products must begin before the current wave is exhausted. John Chambers of Cisco was fond of noting the importance of catching such transitions.

source: John Lusink

Another practical implication is that we generally cannot reap the benefits of new technology immediately. A learning curve happens as firms and industries gradually learn how to use new technology to transform their core business processes. 

Video Seen as Top 5G Use Case in Enterprise; Fixed Wireless in Consumer Space

Enterprise information technology professionals widely believe video applications will be an early lead application for 5G, with 83 percent of 1,000 IT professionals surveyed by Parks Associates naming video detection and alerts as a 5G use case of interest. An equal percentage named video surveillance as a promising use case. The study was sponsored by Nokia. 

source: Nokia

A companion survey of consumers found fixed wireless cited by 76 percent of consumers as a “most appealing” use case. The consumers were surveyed in the United States, United Kingdom and South Korea. The study conducted by Parks Associates was sponsored by Nokia. 

At least in part, that might be because 41 percent of respondents believe they can buy internet access from just one service provider. Some 66 percent of respondents claiming they would subscribe to 5G FWA if it cost the same as their current broadband service and delivers the same or better performance.

source: Nokia

As always, consumer research on new products they have not used yet can be misleading. Many such surveys have consumers saying they are willing to pay more to use a proposed new product or service, with high interest in the new products. 

Actual consumer behavior can diverge significantly from survey findings, of course. But there was significant reported interest in a range of use cases, which appear to have been “prompted” choices. In other words, researchers picked the use cases and asked for opinions about the proposed use cases. 

That prompted approach also appears to have been used in the study of enterprise IT professionals. 

Mobile Teledensity is 5X Fixed Network Peak

Sometimes technology and policy changes really do have a big impact. Consider “teledensity,” measured for decades as the number of phone subscriptions for every 100 persons. Globally, teledensity rose until about 2005 globally, peaking about 2000 in the United States. Even at its peak, though, fixed network teledensity was less than 20 lines per 100 people. 

source: ITU

The technology disruption was mobile phones and networks, which rapidly shifted demand away from consumer fixed services. 

In 2020, there are about 8.3 billion mobile subscriptions in service, greater than world population. Mobile teledensity, in other words, is over 100 accounts per 100 people. 

source: World Bank