How Might B2B Sales Change, Post Pandemic?

With the caveat that we do not yet know how patterns will change in a few years, business-to-business sales practices during the Covid-19 pandemic have been forced to change. The big issue is whether the changes are permanent, and if so, at what level. 

While not all B2B sales situations are the same--varying by size of transaction, importance of transactions and degree of routineness or uniqueness--many professionals have said they have confidence in socially-distanced modes. 

At least early in the pandemic, sales professionals were fairly optimistic about socially-distanced sales practices, and most believed the practices would stay in effect for at least a year after the pandemic ends. 

source: McKinsey 

Like it or not, most B2B sales activities had to shift to virtual formats during the pandemic. Very few professionals reported the older model of sales teams visiting customers was still in place. 

source: McKinsey 

Many professionals also believe that remote sales have worked as well--or better--than the older face-to-face model. 

source: McKinsey 

Video and chat seem to have been widely adopted as the channels to replace in-person visits. 

source: McKinsey

Perhaps surprisingly, 70 percent to 80 percent of B2B decision makers said they prefer the remote interactions, or digital self service, where that is appropriate and possible, to visits from sales personnel. 

source: McKinsey 

One might suppose those findings are true when suppliers and buyers already have established relationships. Indeed, only 25 percent of sales professionals reported that the remote modes were “much less effective” or “someless less effective” with current customers. 

What might surprise you is that the same percentages were reported for prospecting for new customers. Just five percent of respondents suggested remote selling with prospects was “much less effective” than in-person approaches, with 20 percent saying remote prospecting was “somewhat less effective.”

source: McKinsey 

If sales professionals continue to hold those views after the pandemic is over, it is reasonable to expect rather wholesale change in many sales practices on a permanent basis, with less reliance on business travel for sales presentations or after-sales consultations. It is unclear whether there might be a shift to greater reliance on inside sales, but that seems a possibility.

It is conceivable that in some industries, there also will be less demand for attendance at business conventions and trade shows. On the other hand, it also is possible that the traditional value of trade shows--ability to meet with lots of potential customers in one location, with one sales trip--will remain highly valuable. 

It also is likely that attitudes could change over a few years, especially for support and prospecting with large accounts. While remote sales might be kept in place for “tactical” functions, “strategic” functions might still call for face-to-face sales calls.

The B2B Sales Journey Has Changed

The business-to-business buyer journey has changed. As in the past, B2B transactions remain complex, with multiple influencers and decision-makers, with many rounds of research, evaluation and stakeholder engagement work required. 

 

Since the Covid pandemic, when person-to-person meetings were largely impossible, means the B2B purchase journey has been streamlined. There is less distinction between marketing and sales. Timelines often are compressed. Buying authority is more decentralized as “computing as a service” can be bought with a credit card. 

 

Buyers still must identify the business need, research solutions, evaluate options and reach a decision. But buyers are doing more of that online and on their own.

Enterprise sales have in the past largely relied on field sales. But change is happening. Perhaps a third of business-to-business buyers might be willing to conduct fully-virtual transactions for new products up to a value of approximately USD 500,000, according to a McKinsey report. 

And marketplaces, ecosystems and platforms can make a huge difference. PCCW Global, using an automated system for sales to settlements, “gained over 800 customers in the last 18 months, with growing traction, without any actual sales contact,” Halbfinger said. 

“We don’t even have to know who the customer is,” he added. Sales come from third parties or online, direct from the trading platform PCCW Global uses. 

B2B sales have evolved as virtual marketing, sales, fulfillment and settlement evolve using artificial intelligence and other digital tools. Those themes, and many more, are featured in a PTC Webinar Series: Frictionless Business™  on How B2B Sales Will Change, Post Covid. 

Featured panelists included:

• Matt Bramson, Founder & Managing Partner, Cloud Strategy Solutions, USA

• Marc Halbfinger, Chief Executive Officer, PCCW Global, Hong Kong SAR China

• Nancy Ridge,  Founder & President, Ridge Innovative, USA

• Elmar Rode, Director Communications Industry Strategy Group, Oracle, Germany

• Gary Kim, IP Carrier principal, acted as moderator

Available on 12 July 2021 to PTC members, the series will be available on YouTube in about 30 days. Other episodes in the series already are available for immediate viewing.

B2B Sales Journeys Now Begin Online

No matter how long a business-to-business sales process takes, perhaps 60 percent to  70 percent of potential business product buyers have conducted research on solutions to their problems before they contact a sales professional.  

In other words, “B2B customers today progress more than 70 percent of the way through the decision-making process before ever engaging a sales representative,” according to some studies.

The B2B sales journey in 2020 began online, using search about 90 percent of the time, according to Forrester Research. Search is involved 90 percent of the time, according to Google.  

In 2020, 80 percent of the average B2B buyer journey took place online, and whatever statistics you choose to believe, online research is a huge part of the buyer journey.  

Though intensified by the pandemic, 96 percent of B2B sales teams have shifted to remote selling, according to McKinsey.

That includes checking a supplier’s website, doing online searches and reading user reviews, according to Marketing Charts. Some 94 percent of all potential business customers conduct online research before making any purchases valued at more than $100,000, for example.  

source: Marketing Charts 

Accenture notes that business buyers also increasingly expect a “consumer online” experience when buying B2B. In 2014, for example, about 40 percent of prospects conduct online research for a majority of goods priced under $10,000, and 31 percent do so at that frequency for goods costing at least $100,000.  

More importantly, perhaps, many B2B transactions take place online as well. 

source: Marketing Charts 

That remained true in 2020. More than half of prospects reported found solutions online. And 70 percent of buyers defined their solutions before they ever contacted a sales professional. 

source: Demand Base 

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.

At Least for the Moment, B2B Sales Professionals See No Return to Old "In-Person" Sales

By the start of 2022, only 15 percent of business-to-business sales executives expect in-person sales meetings to be the norm, a McKinsey survey suggests. About 83 percent of the time, it appears B2B marketing and sales personnel believe digital and remote channels are as effective, if not more effective, than before the Covid pandemic, for reaching new customers. That is the same figure professionals claim for sales to existing customers. 

The obvious issue is whether this becomes the new normal for B2B sales and marketing. Currently, about 70 percent of sales interactions are remote or digital, only about 30 percent in person. 

There are lots of implications for spending priorities, skill sets and channels. 

source: McKinsey 

source: McKinsey

CFOs are Likely to Demand More Inside Sales than Field Sales

Before the Covid-19 pandemic, international business travel was a $1.5 trillion annual expense, growing about seven percent a year. So among the questions to be asked is whether such business travel spending rebounds to former levels, or changes.

According to researchers at Growth Lab, business travel and spending has grown far faster than global gross domestic product. So it might be reasonable to expect executives to consider whether such spending--and how much--is required, post Covid. 

To be sure, much such travel arguably is related to the emergence of global firms that must coordinate across geographies, creating a need for personal relationships best developed face to face, rather than virtually. 

source: Growth Lab 

As a matter of necessity, business-to-business sales and support operations have had to move to virtual modes during the pandemic, when international travel was unlawful. As was the case for much office or knowledge work, productivity arguably has not suffered from enforced virtual work modes. 

Whether that remains true long term is another question. Most businesses can work, short term, off embedded social capital and relationships. How well they can do so long term is the unanswered question. Will new employees be able to socialize and learn each organization’s culture on a mostly-remote basis? Will human bonds be sustainable when they are created and sustained mostly virtually? 

Can business-to-business sales permanently shift to virtual modes on a permanent basis?

source: McKinsey  

There is evidence that although online traffic to company websites has grown substantially, sales close rates have fallen. In a business-to-business context, face-to-face interactions arguably are important. In other words, field sales became impossible and all sales became “inside sales.”

Most organizations selling B2B use a mix of field and inside sales, but inside sales has a bigger role for smaller customers and follow-on sales.

It remains unclear how the field sales roles can change, longer term. But there is some thinking that the distinction between field sales and inside sales almost vanishes when remote sales is ubiquitous. And, to be sure, financial officers will welcome the chance to reduce sales costs by emphasizing virtual and reducing the cost of field sales. 

Most buyers are comfortable with remote purchasing when sales amounts are relatively small. The issue is how big purchases must be handled or how to reshape sales funnels. 

Over the longer term, sales effectiveness will drive the balance of physical or virtual; field or inside sales. As always, larger sales with a longer sales cycle will be more apt to use physical processes. 

And since most organizations set operating budgets based on historical norms, a dip in sales expense in 2020 is likely to be followed by continuity in 2021 and at least a few years beyond. 

Face-to-face sales in B2B settings will get more attention as the pandemic ends. The issue is how much of a return can be expected. “Less” seems more likely than “more.” And “less” seems more likely than “return to 2019 levels.” Any organization that believes it can permanently change its sales cost metrics is going to try and continue doing so.

How Much will B2B Sales Processes Change after Covid-19?

Digital channels already are a big part of business-to-business sales processes, and the conventional wisdom has to be that use of digital channels will grow, as part of permanent behavioral changes created by the Covid-19 pandemic. What is yet unclear are the extent and degree of permanent changes. 

Gartner, for example, predicts that by 2025, 80 percent of B2B sales interactions between suppliers and buyers will occur in digital channels.

Depending on how one tabulates, that might be a bit more than presently happens, or might be less. Today, perhaps 17 percent of interactions tend to happen in person, for example. And most might agree that digital commerce channels will increase. 

That might logically happen for smaller purchases routinely, with strategic purchases requiring more sales interaction overall, and arguably more time spent in person-to-person engagements.  

Business customers now routinely use supplier websites, for example,  to identify problems, explore solutions, build requirements, narrow the range of potential suppliers, validate those choices and create firm consensus around choices, Gartner notes. 

Interactions with sales representatives still are part of those tasks. In fact, in 2019 slightly more B2B buyers reported reliance on sales personnel than websites. Followup communications and activities arguably also rely on other channels (email, text messaging, audio and video conferences) to flesh out details. 

source: Gartner 

About 17 percent of time spent conducting research happens in live meetings with potential suppliers. About 67 percent of research time is consumed conducting online research, meeting with buying groups and conducting other research offline, Gartner notes. Still, one can conclude by comparing information channel activities with time spent in each channel that meetings with potential suppliers have an outsized influence. 

source: Gartner 

One might also assume that strategic choices and expenditures will require more face-to-face interactions, as well as more digital research and follow-up, than routine purchases. 

B2B Sales Might Never Be the Same

We do not yet know whether Covid business-to-business sales processes have changed permanently or not. But a McKinsey survey suggests at least 30 percent of sales journey operations are conducted entirely on a “self serve” basis, not face to face. About 32 percent of B2B research, evaluation and ordering operations are conducted digitally.

source: McKinsey 

About 34 percent to 36 percent of sales processes are conducted digitally with a sales person. Only about 34 percent to 36 percent of such processes are conducted face to face. 

Altogether, roughly two thirds of B2B transactions are conducted digitally, not face to face, by phone or fax.

Compared go pre-Covid patterns, fewer sales are concluded in person; more are conducted using video conferencing, online, by email or e-commerce methods. 

source: McKinsey 

The survey suggests growing comfort with remote interactions. In April 2020 only 27 percent of respondents thought the remote sales processes were more effective than face-to-face methods. By February 2021 that percentage had grown to 58 percent. 

Fully 87 percent of respondents believed they would continue with remote interactions for at least a year after the pandemic ends. 

source: McKinsey