McKinsey Survey: European B2B decision maker response to COVID-19 crisis

McKinsey & Company 1
Optimism is relatively low and steady: One-third are optimistic
about the economy, up one percentage point from two weeks ago
Confidence level on economic conditions after the COVID-19 situation1
% of respondents
12 12
50 48
38 39
April 6 April 28
Optimistic: The economy will rebound in 2–3 months and grow
just as strong as or stronger than before COVID-19
Neutral: The economy will be impacted for 6–12 months or
longer and will stagnate or show slow growth thereafter
Pessimistic: COVID-19 will have lasting impact on the economy and will
show regression/fall into lengthy recession
Source: McKinsey COVID-19 B2B Decision-Maker Pulse #1 4/1–4/6/2020 (n = 1,400); McKinsey COVID-19 B2B Decision-Maker Pulse #2 4/20–4/28/2020 (n = 1,473)
1Q: How is your overall confidence level on economic conditions after the COVID-19 situation? Figures may not sum to 100% because of rounding; a “prefer not to answer” option was given, but <1% of respondents filled it out in 2020.

Europe is slightly less optimistic compared to other regions
12 12 11 9 12
18
12 10
41
13 12 10
43
48 47 47
50
49
50
29
19
48
58
51
41
45
39 42 43
37
33
39
68 71
10
30
37
50
2
FranceAll
countries
ItalyAll
Europe
Germany UKSpain China India Japan S. Korea Brazil US
Confidence level on economic conditions after the COVID-19 situation1
% of respondents
Pessimistic: COVID-19 will have
lasting impact on the economy and
will show regression/fall into
lengthy recession
Optimistic: The economy will
rebound in 2–3 months and grow
just as strong as or stronger
than before COVID-19
Neutral: The economy will be
impacted for 6–12 months or
longer and will stagnate or
show slow growth thereafter
1Q: How is your overall confidence level on economic conditions after the COVID-19 situation? Figures may not sum to 100% because of rounding; a “prefer not to answer” option was given, but <1% of respondents filled it out in 2020.
Europe APAC
1% -9% 4% 7% 0% 0% 12% 3% 2% 8% -10% -5%
Source: McKinsey COVID-19 B2B Decision-Maker Pulse #2 4/20–4/28/2020, (US n = 607), (France n = 219), (Spain n = 215), (Italy n = 407), (UK n = 218), (Germany n = 414), (China n = 443),
(South Korea n = 200), (Japan n = 202), (India n = 411), (Brazil n = 419)
2%
Percentage-
point change
in optimism
between April
1–9 surveys
and April 20–
28 surveys

Europe has slowed its budget decline slightly and near-term spend
reductions are expected to decelerate
1“About the same” refers to ±3% change in budget.
2Q: How has the coronavirus (COVID-19) situation affected your company’s budget for the following areas? Percentages may not add to 100 due to rounding.
3Q: How do you think spending on the following may change in the next two weeks? Percentages may not add to 100 due to rounding.
4Includes survey respondents from (France n = 219), (Spain n = 215), (Italy n = 407), (UK n = 218), (Germany n = 414).
5Includes survey respondents from (France n = 200), (Spain n = 200), (Italy n = 400), (UK n = 199), (Germany n = 400), (China n = 400), (South Korea n = 201), (Japan n = 200), (India n = 400), (US n = 619), (Brazil n = 400).
IncreasedAbout the same1Reduced
61 58
26 24
1813Europe4
Global5
55 54
26 24
19 21
April 9 April 28
56 43
29
33
16 24
50 42
28 32
22 27
April 28April 9
Company’s budget (changes already made)2 Expected in the next two weeks3
Spend shifts as a result of COVID-19
% of spend changes

Respondents report downward budget shifts across all categories,
with banking and insurance least affected to date
61
51
50
63
58
58
64
58
63
61
57
53
52
21
28
31
20
23
24
19
23
18
24
25
27
28
18
21
19
17
19
18
17
19
19
15
19
20
21
Banking and insurance
Capital equipment
Distribution and transportation
Software and telecom
Specialty inputs
Commodity inputs
Packaging
Energy
Processing supplies
Finished goods
Vehicles
IT hardware
Real estate
Reduced IncreasedAbout the same3
Budget changes due to COVID-19 (changes already made)1
% of respondents
Net
intent2
Services
Inputs
Capex
-44%
-31%
-32%
-45%
-39%
-41%
-48%
-39%
-44%
-46%
-38%
-34%
-31%
Source: McKinsey COVID-19 B2B Decision-Maker Pulse #2 4/20–4/28/2020 (n = 1,473)
1Q: How has the coronavirus (COVID-19) situation affected your company’s budget for the following areas? Figures may not sum to 100% because of rounding.
2Net intent is calculated by subtracting the % of respondents stating they expect to decrease spending from the % of respondents stating they expect to increase spending.

Advanced industries are experiencing the most significant decline
in budget across categories
1Budget net intent is described as the % of budget decreases subtracted from the % of budget increases.
2Q: How has the coronavirus (COVID-19) situation affected your company’s budget for the following areas?
3“About the same” budget changes are those that are +/- 3%.
Budget net intent1 per category for each industry2
Overall industry net intent
% where budget is about the same3
Advanced
industries
Technology,
media, and
telecom
Global energy
and materials
Pharma and
medical
products
Travel,
transportation,
and logistics
Global finance,
banking, and
insurance Consumer/Retail
Services
Inputs
Capex
Specialty inputs
Energy
Processing supplies
Packaging
Commodity inputs
Finished goods
Capital equipment
IT hardware
Vehicles
Real estate
20 26 21 25 23 32 26
Net intent: % of budget decreases subtracted from the % of budget increases
Below -50 -50 to -25 -25 to 0 0 to 25 25 to 50 50+

In the next two weeks, budget decreases are likely to decelerate,
with some pockets of budget increases emerging
1Net intent is described as the % of spending decreases subtracted from the % of spending increases.
2Q: How do you think spending on the following may change in the next two weeks?
3“About the same” spending changes are those that are +/- 3%.
Net intent: % of budget decreases subtracted from the % of budget increases
Below -50 -50 to -25 -25 to 0 0 to 25 25 to 50 50+
Next two-week spending net intent1 per category for each industry2
Overall industry net intent
% where budget is about the same3
Advanced
industries
Technology,
media, and
telecom
Global energy
and materials
Pharma and
medical
products
Travel,
transportation,
and logistics
Global finance,
banking, and
insurance Consumer/Retail
Services
Inputs
Capex
Specialty inputs
Energy
Processing supplies
Packaging
Commodity inputs
Finished goods
Capital equipment
IT hardware
Vehicles
Real estate
31 32 27 32 30 50 39

McKinsey & Company 7Source: McKinsey COVID-19 B2B Decision-Maker Pulse #2 4/20–4/28/2020 (n = 1,473)
Technology,
media, and telecom
Global energy
and materials
Advanced
industries
Global finance,
banking, and insurance
Pharma and
medical products
Consumer/retail
Travel,
transportation,
and logistics
All industries are shifting capacity down in light of tempered
demand; travel seeing sharpest decline
Flat
-15%
Demand
for
products/
services
Operational capacity (eg, production)3 Flat-15%
Impact of COVID-19 on demand and capacity1,2
% change due to COVID-193
1Q: How has the coronavirus (COVID-19) situation affected your company’s production (operation) capacity? Percentages may not add to 100 due to rounding.
2Q: How has the coronavirus (COVID-19) situation affected demand for your company’s products/services? Percentages may not add to 100 due to rounding.
3Weighted average uses following midpoints: “increased/reduced 25+%” is +/- 30%, “increased/reduced 11–25%” is +/- 18%, “increased/reduced 4–10%” is +/- 7%, “About the same (+/- 3%)” is 0%.

Companies are reducing marketing spend in all regions; more than
60 percent of European B2B companies have cut back
62 61 63 58 56
68 71
62
69 65 71
58 57
18 20 19
21 23
18 14
19 8
26 20
16 20
20 19 18 21 21
14 15 19 24
8 10
26 23
ItalyAll
countries
ChinaEurope France Germany UK JapanSpain India S. Korea Brazil US
Europe APAC
Marketing spend change1
% of responses
1Q: How has the coronavirus (COVID-19) situation affected your company’s marketing spend across all channels? Percentages may not add to 100 due to rounding.
IncreasedAbout the same2Reduced

1Q: Prior to COVID-19, how important were each of these methods in delivering an overall outstanding sales experience? Please distribute 100 points across these two items, giving more points to the method that you believe is more important to
you personally when interacting with your suppliers.
2Q: Now, thinking about the next two weeks given the environment with COVID-19, how important are each of these methods in delivering an overall outstanding sales experience? Please distribute 100 points across these two items, giving more
points to the method that you believe is more important to you personally when interacting with your suppliers.
3Q: Prior to COVID-19, how important was each method in delivering an overall outstanding sales experience? Distribute 100 points across these items, giving more points to the method that you believe is more important to your customers.
4Q: Now, thinking about the next two weeks given the environment with COVID-19, how important are each of these methods in delivering an overall outstanding sales experience? Please distribute 100 points across these two items, giving more
points to the method that you believe is more important to your customers.
47
65
53
35
Before COVID-19 April 28
+40%
48
69
52
31
Before COVID-19 April 6
+45%
Traditional Digital
The importance of digital sales has doubled over that of traditional
sales interactions since the onset of COVID-19
Importance of digital vs traditional to
B2B buyers themselves1,2
Points allocated out of 100
Importance of digital vs traditional to
B2B company customers3,4
Points allocated out of 100

Digital and traditional, directed channels are now seen as the most
beneficial for researching suppliers
1Q: What ways of interacting with a supplier would be most beneficial to you when researching/considering suppliers going forward? Rank up to 3 that would be most beneficial. A free-response option was given, but 0% of respondents filled it
out in 2020.
Most beneficial supplier interactions for researching/considering suppliers1
% of respondents ranking in top 3
Digital
Self-serve Directed Self-serve Directed
Traditional
25
21
18
17
13
24
19
8
18 17 17
15
11
26
22
16
Email from
sales rep
Post on
social
media/online
Supplier
website
Referral
from
someone
in my
industry
Online
material
from
supplier
Google/web
search
Customer
referral
Live chatInfo on
mobile
app
Text from
sales rep
Industry
publication
Trade
show
Print
material
from
supplier
Meeting
sales rep
in person
Call from
sales rep
Direct
mail from
sales rep

When ordering from suppliers, B2B customers find value in a mix
of omnichannel interactions
1Q: Which of the following methods do you/would you most prefer to use when submitting your order? Please rank up to 3 that would be most beneficial.
Self-serve Sales rep involvementInternal processes
Most preferred method for ordering1
% of respondents ranking in top 3
47
34
36
34
40
33
27 26
Using a supplier’s
website
Using my
company’s
procurement
department
Using my
company’s
e-procurement
portal
Using a
mobile app
Using call
center/customer
service
Calling sales repEmailing sales rep Ordering
from sales
rep in person

The majority of companies that serve other businesses have shifted
their go-to-market model in response to the COVID-19 crisis
52
46
49
43
3
21
39
56
48
3
In-person/field sales team (eg, meeting with
customers face to face)
E-commerce (eg, products/services sold directly
online with no sales rep involved)
Inside sales team (eg, interacting with
customers on the phone)
Online/web support (eg, chatting with customers
via video/website/mobile app to support purchase)
Other
Before COVID-19 During COVID-19
Go-to-market sales model during COVID-191,2
% of respondents
97%3
shifted their GTM
model during
COVID-19
1Q: In what ways was your company’s product or service sold before COVID-19?
2Q: Now today, in what ways is your company’s product or service sold during COVID-19?
3Q: Which of the following statements best describe the changes your company has made to its commercial and go-to-market model during COVID-19?

E-commerce revenue is up more than 20 percent since the onset
of COVID-19
Percent of company revenue driven by e-commerce before and during
COVID-19 (among companies that sell online)1,2
Average % of total revenue
1Q: Approximately what percentage of your company’s revenue before COVID-19 was driven by…Figures may not sum to 100% because of rounding.
2Q: Approximately what percentage of your company’s revenue during COVID-19 is now driven by…Figures may not sum to 100% because of rounding.
49
59
During COVID-19Before COVID-19
+20%

E-commerce share of overall B2B company revenue is up in all
countries, most notably in Brazil and Italy
Percent of company revenue driven by e-commerce before and
during COVID-19 (among companies that sell online)1,2
Average % of total revenue
45
49
56
51
47 46 47
44 42
47
61
42 40
56 59
65
56
64
51
57
52
47
53
68
62
52
S. KoreaAll
countries
France Spain UKGermany Italy China JapanIndia Brazil USAll
Europe
1Q: Approximately what percentage of your company’s revenue before COVID-19 was driven by…Figures may not sum to 100% because of rounding.
2Q: Approximately what percentage of your company’s revenue during COVID-19 is now driven by…Figures may not sum to 100% because of rounding.
Before COVID-19
During COVID-19
Europe APAC
23% 16% 11% 21%36% 20% 12%13% 11% 46% 29%12%
X% % change
20%

14
31
43
9Much less effective
April 6
Much more effective
Somewhat less effective
As effective as before
Somewhat more effective
100
3
1Q: How effective is your company’s new sales model at reaching and serving customers? Figures may not sum to 100% because of rounding.
60% of B2B decision makers believe the new sales model is as effective
or more so than prior to COVID-19 (up from 48% in early April)
Effectiveness of new sales model in reaching and serving customers1
% of respondents
21
35
32
8
April 28
100
5
48%
as effective or more so
compared to prior to
COVID-19
60%
as effective or more so
compared to prior to
COVID-19

Companies are likely to keep their new sales model for more than
12 months after the onset of the COVID-19 crisis
78%
are very likely or somewhat
likely to sustain these shifts
12+ months after COVID-19
Staying power of new sales models1
% of respondents
1Q: Which of the following statements best describe the changes your company has made to its commercial and go-to-market model during COVID-19? Figures may not sum to 100% because of rounding.
Source: McKinsey COVID-19 B2B Decision-Maker Pulse #2 4/20–4/28/2020, (n = 1,473)
28
50
19
3
Unlikely to sustain 12 months after
Very likely to sustain 12+ months after
Somewhat likely to sustain 12 months after
NA, made no go-to-market changes

More than 80 percent of B2B companies have adjusted incentives
in response to the effects of COVID-19
38
26
18
16
13
10
Short-term bonuses/incentives
More fixed incentives
Lower quotas
Higher quotas
No change
More variable incentives
Sales team incentive structure changes in response to COVID-191
% of respondents
1Q: To what extent has your company made changes to the incentive structure of your sales team in light of COVID-19? Figures may not sum to 100% because of rounding.

22
20
17
13
13
9
7
Advanced industries
Global energy and materials
Technology, media, and telecom
Pharma and medical products
Travel, transportation, and logistics
Global finance, banking, and insurance
Consumer/Retail
9
20
20
19
20
12
$500M to < $1B
$1M to < $25M
$100M to < $500M
$25M to < $100M
$1B to < $10B
$10B+
4
6
17
15
29
15
8
7
<50
100–499
50–99
500–999
50,000–99,999
1,000–9,999
10,000–49,999
100,000+
Survey respondents by no. of employees of company
% of respondents1
Survey respondents by role in company
% of respondents1
Survey respondents by industry
% of respondents1
Survey respondents by annual revenue of company
% of respondents1
20
15
15
13
10
8
7
6
6
Sales
Operations
IT/computer services
Purchasing
Top management
Shipping/logistics
Engineering
R&D/Innovation/Product design
Marketing
B2B Pulse Decision-Maker Pulse #2: Respondent Overview
Pulse #1 closed on April 6, 2020 Pulse #2 closed on April 28, 2020
1Percentages may not sum to 100 due to rounding.

McKinsey Survey: European B2B decision maker response to COVID-19 crisis

Recommended

Recommended

More Related Content

More from McKinsey on Marketing & Sales

More from McKinsey on Marketing & Sales (20)

Recently uploaded

Recently uploaded (20)

McKinsey Survey: European B2B decision maker response to COVID-19 crisis