How Covid-19 is Altering the Shape of B2B Sales

“There’s always opportunity in a downturn, you just need to identify it and go for it.” Wise words from an uncle who’d lived through many a recession and kept his nerve and his business afloat – changing course when he had to by adapting to market conditions.

This advice is particularly useful for the period we live in now with the global COVID pandemic forcing lockdowns, economic downturns, and business closures. 
McKinsey¹ Digital, reports that: “Those companies that move early and decisively in a crisis do best.” Indeed, many of the past year’s success stories have been those companies that made the shift to accelerate their digital transformation and adapted their business models.

At the beginning of 2020, the B2B sector was lagging far behind retail in its digital transformation and ecommerce effort but Gartner² now forecasts that: “By the end of 2021, digital commerce is expected to overtake direct sales as the most used channel for B2B selling.” 

When it comes to B2B, McKinsey’s customer-behavior research³ shows that digital interaction with B2B customers is now two times more important than traditional channels – more than a 30 percent jump since before the outbreak of the COVID-19 pandemic. 

However, this is not the same across all industries. Findings in a recent report⁴ from Digital Commerce 360 Research indicate that “while B2B e-commerce sales grew overall, the growth was highly uneven across many industries, depending in large measure upon the impact COVID-19 had on specific markets”. 

That said, 2021 will see companies continue with their digital transformation efforts with buyers increasing their levels of purchasing, and sellers increasing their levels of sales via digital channels. 

The previously cited Gartner⁵ report concurs: “Because of the convenience and lower cost of buying from websites, 80% of organizations have a formal target for increasing purchases through the digital commerce channel.” 

This trend is further supported by the fact the majority of B2B buyers today are millennials. They want things on their terms. In general, these digital natives still expect a personalized buying experience but prefer it to happen via digital channels. They want that seamless shift from researching a product online to making a purchase directly via whatever device they happen to be using at a time of their choosing. 

Sellers’ digital intentions and goals rate are even higher; Gartner finds that: “85% of sellers have a formal goal for increasing sales through the digital commerce channel.”

Omnichannel is the new normal

The on-off disruptions to business over the past year have concentrated minds and many organizations have made efforts to develop new business models, adapt their current business practices and reach out to new markets – direct to consumers or new geographies, for instance. 

“The pandemic hasn’t really changed our digital transformation plans but it has accelerated them,” says Fabien Appert, CIO at Carrefour Assurance. “We had already started to increase the share of sales to digital. Where salespeople add value is where customers need bespoke quotations or have to adjust one for specific circumstances.”

A good example of adapting business practices is an English textiles company which was particularly affected early in the pandemic as one of its main markets is the design capital of Italy, Milan, one of the first areas in Europe to experience a significant COVID-19 outbreak. 

In the past, a buyer would have a sales representative show up in person with a swatch book and the client would put a red sticker on all the ones they were interested in. Next, the sales exec would arrange for fabric samples to be sent to the fashion house. This process had to be replicated online with digital presenters.
So the first task in its digital journey was for the company to digitize its entire collection of fabric swatches comprising about 10,000 different SKUs. 

Buyers can see all the swatches – they can zoom in and get full product details; mark a check box with the ones for which they want to request physical samples.

Next is where the ‘phygital’ process comes together. Sales reps check these orders and add value by suggesting that if you like this sample/color/material then you may also like that and send extra samples to them. 

With the prospect of things opening up, the sales team are itching to book flights, but the business has seen a fantastic year thanks to digitization of the samples and digitalization of the processes not to mention the huge saving on travel and hotel expenses (in fact, it was able to divert much of its travel budget to the digitalization project). 

The buyer-seller relationship is still very much alive, and the sales team will continue to work from a distance and minimize the amount of travel to just a trip once a year rather than once a season. 

Another anecdote comes from UK clinical data and web-registry software vendor, Dendrite Clinical Systems whose CEO, Dr Peter Walton, would spend the best part of a day travelling to and from a one-hour meeting; of course, today video conferencing is the norm. His team have become digital natives and moved to different countries – Hungary, Spain, France and Australia – with work being conducted much as it was before and more efficiently. 

Peter says: “My travel budget of £120k has whittled down to nothing. Before I would spend weeks in the Far East visiting clients. If I did that today I think they would be wary and wonder why I bothered when we can easily meet via video.”

Once the pandemic is under control and ‘normal’ travel is back, he suspects that his travelling will be nothing like at the level it was before. “To be honest,” he says, “many of my clients work from home these days so if I were to travel as before it may be a challenge to bring together all the stakeholders as they won’t necessarily be available to attend a meeting.”

Orchestrating the future

Obviously, it’s not all plain sailing and there are obstacles to overcome – not least the complexity of products and pricing that many B2B companies have, and how to orchestrate them in the online world. 

Then there’s the question of people: historically, people have bought from people. In the new way of working, the sales team needs to be realigned to where it can still add value and adapt to become hybrid reps in the ‘phygital’ world – selling via phone, email and web conferencing, using social networks to maintain customer relationships and only scheduling face-to-face meetings as needed. 

Ibexa and denkwerk customer DÖRKEN grasped the significance of the COVID-19 lockdowns very early on. Sales and the sales processes had to be digitalized – swiftly – and people would have to start selling not only to the buyers with whom they had cultivated deep and long-standing relationships, but also reimagine these relationships digitally.

DÖRKEN is a manufacturer of industrial coatings, and its sells to wholesalers in industrial paint and paint products. “The paradox of manufacturing is that usually, the production processes are state-of-the-art, but the sales team has a hard time letting go of its traditional way of doing things,” says Daniel Hölper, the online sales consultant at DÖRKEN. “And this is also true of the wholesalers that buy from us. Their outlook and practices are – or were – very analog.”

COVID-19 created a context in which an industry that was not particularly receptive to digital transformation had to adjust to its inevitability. DÖRKEN made this easier by making the new digital processes as recognizable as possible. A trade fair for wholesalers featured interactive live demos of new ideas or products, with lively Q&As to mimic as much as possible the traditional trade fair stand. 

“At first we were scared no one would listen or that the wholesalers would fall asleep but that did not happen. We kept the sessions short and snappy,” says Daniel.
Digital breakfast meetings were made more attractive through gamification where participants won points by watching 60m of video or by clicking on company links, making them eligible for a weekly prize.

These digital encounters are gaining traction, especially now that DÖRKEN has built its own studio to host them. “This gives us more control and gives us more possibilities,” says Daniel. “Events are getting more sophisticated with breakout sessions to get our customers more engaged in new products.”

DÖRKEN knew the message had got through to the wholesalers when several of them approached DÖRKEN for help in digitalizing their own processes. “And so now we have come full circle so to speak and are helping our customer base in their digital transformation, digitalizing our ecosystem.

“Everyone in the industry is agreed, even our older salespeople: there is no going back," concludes Daniel.

Conclusion

While no one would argue that COVID-19 was anything other than a tragedy, it did lead to business changes that were necessary and long overdue. Industries that were doing “just fine” without a strong commitment to digital had to change strategy from one day to the next and are realizing after the event that they weren’t “fine” at all but missing out on a lot of opportunities by being slow to digitalize.

Businesses are happy to have achieved in under a year what they were planning to do in two or five – but of course we’ll never know how successful those projects would have been, and what damage might have done to those businesses who had not made digitalization a priority.

As businesses in Europe and North America emerge from COVID-19, the way they work has changed ¬– and for the better. Successful businesses will continue on this path and find new, imaginative ways to connect people digitally. 

Wherever you are on this path, Ibexa is there to help you on your way. If you'd like to discover more, save your seat at Ibexa Engage 2021 - Future-proof Your B2B Sales Strategies: Mastering New Business Channels and Driving Growth into the Next Normal. Join us to see how Ibexa and our local partners can help you evolve your sales channels to serve your buyers' new needs.  

^{[1] The digital-led recovery from COVID-19: Five questions for CEOs https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/the-digital-led-recovery-from-covid-19-five-questions-for-ceos[2] Gartner: Increase Profits and Delight Buyers by Becoming a Digital-First, Omnichannel B2B Seller. Published 1 April 2021, by Mark Lewis.[3] McKinsey B2B Decision Maker Pulse Survey. https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/survey-global-b2b-decision-maker-response-to-covid-19-crisis[4] Digital Commerce 360 Research The 2021 US B2B ECOMMERCE MARKET REPORT, KEY FINDING[5] Ibid: Gartner: Increase Profits and Delight Buyers by Becoming a Digital-First, Omnichannel B2B Seller. Published 1 April 2021, by Mark Lewis.}