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

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

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Omnichannel in B2B sales: The new normal in a year that has been anything but

B2B buyers aren’t just moving to omnichannel. They’ve arrived. Given the choice of in-person, remote, and e-commerce channels, purchasers have shown they want them all.

Omnichannel in B2B sales: The new normal in a year that has been anything but

B2B buyers aren’t just moving to omnichannel. They’ve arrived. Given the choice of in-person, remote, and e-commerce channels, purchasers have shown they want them all.

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

  1. 1. McKinsey & Company 1 Highlights from McKinsey’s latest B2B Pulse survey ~3,500 B2B decision makers surveyed in 12 countries throughout February 2021 Omnichannel is now the standard, not the exception. Even as in-person engagement has reemerged since August 2020, buyers have made clear they prefer a cross-channel mix, choosing in-person, remote, and digital self-serve interactions in equal measure. B2Bs say omnichannel works—and even surpasses past approaches. Eight in ten B2B decision makers say that omnichannel is as or more effective than traditional methods—a sentiment that has grown sharply throughout the past year. Buyers will spend six figures or more digitally, and budget projections are equally robust. Despite ongoing market volatility, six in ten respondents plan to maintain or grow their operating expenditure investments over the next five years. And nearly half plan to expand their capital expenditure over the same period, a six percentage-point increase since August 2020. Hybrid sales reps will soon become the most common sales role. Sixty-four percent of B2Bs intend to increase the number of hybrid sellers over the next six months, making this model the lead sales role. E-commerce was the most popular route to market for B2B companies (marginally outpacing in- person). And 41 percent of leaders say it is their most effective sales route, beating out in-person (37 percent) and video (31 percent).
  2. 2. McKinsey & Company 2 Omnichannel is the standard, not the exception 1Q: How do you currently interact with sales reps from your company's suppliers during the following stages of interactions? How would you prefer to interact with sales reps during the following stages of interactions? Note: Figures may not sum to 100% because of rounding Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626); McKinsey & Company B2B Decision-Maker Pulse Survey, 2/12–2/26/2021 (n = 3,498) Current way of interacting with suppliers’ sales reps during different stages1 % of respondents …and that’s exactly what customers want ~2/3 of buyers prefer remote human interactions or digital self-service 22 34 48 35 31 32 Traditional interactions (i.e., in-person) Remote human interaction (i.e., video) Digital self-serve (e.g., e-commerce) Aug '20 Feb '21 22 33 49 35 29 32 Aug '20 Feb '21 35 36 46 34 19 30 Aug '20 Feb '21 36 34 44 34 20 32 Aug '20 Feb '21 Identifying and researching new suppliers Considering and evaluating new suppliers Ordering Reordering
  3. 3. McKinsey & Company 3 1Q: How effective is your company's new sales model at reaching and serving customers? 2Q: How effective is the new sales model in acquiring new customers (e.g., those that have never purchased from your organization before)? Note: Figures may not sum to 100% because of rounding B2Bs say omnichannel works—and even surpasses past approaches Source: McKinsey COVID-19 B2B Decision-Maker Pulse #1 3/30–4/9/2020 (n = 3,619); McKinsey COVID-19 B2B Decision-Maker Pulse #2 4/20–4/28/2020 (n = 3,755); McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626); McKinsey & Company B2B Pulse Survey, 2/12–2/26/2021 (n = 3,498) Overall: Effectiveness of new sales model in reaching and serving customers1,2 % of respondents Equally or more effective than before COVID-19 Existing customers New customers 9 11 15 24 18 25 31 34 27 29 29 25 39 28 20 13 4 Feb 25, 2021 Aug 11, 2020 6 April 9, 2020 April 28, 2020 Much less Somewhat less Same Somewhat more Much more 7 7 15 24 33 36 28 23 20 13 3 5 Aug '20 Feb '21 54% 76% 65% 75% 83% 83%
  4. 4. McKinsey & Company 4 This pattern held true across geographies, with decision makers in Brazil, India, and the United States among the most enthusiastic % of respondents 1Q: Overall, how effective is your company’s new sales model at reaching and serving customers overall? Note: Figures may not sum to 100% because of rounding and “don’t know / unsure” option was not included for analysis. Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626); McKinsey & Company B2B Pulse Survey, 2/12–2/26/2021 (n = 3,498) By country: Effectiveness of new sales model in reaching and serving customers1 % of respondents 24 21 22 22 21 42 27 6 15 36 5 13 12 34 53 46 33 31 28 32 43 32 31 14 33 27 25 19 19 32 33 15 26 34 36 15 24 33 36 13 4 11 13 11 12 11 15 15 11 30 19 19 4 3 2 2 4 3 4 2 2 8 27 2 5 China All UK Brazil S. Korea Italy Spain Japan US India Chile Germany France Much more Somewhat more As effective as before Somewhat less Much less Total effective Change from Aug 2020 81% 83% 93% 87% 86% 85% 85% 85% 83% 83% 81% 79% 76% N/A 54% 74% 68% 118% 63% 62% 43% 57% 68% 22% 59% 60%
  5. 5. McKinsey & Company 5 B2B budget projections indicate a willingness to spend over the next five years Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626); McKinsey & Company B2B Pulse Survey, 2/12–2/26/2021 (n = 3,498) 1Q: Over the next 5 years, how do you think COVID-19 will affect your company’s overall costs and investments in each of the following areas? Note: Figures may not sum to 100% because of responses under “prefer not to answer” option not included in analysis, and because of rounding. Expected change in opex and capex investments over the next 5 years due to COVID-191 % of respondents 16 21 41 39 -43 -40 Feb 2021 Aug 2020 Decreasing Increasing Maintaining 19 21 41 47 -40 -32 Feb 2021 Aug 2020 All industries opex All industries capex 2 percentage point decrease 6 percentage point increase
  6. 6. McKinsey & Company 6 Investments in IT hardware, software, and marketing outpace spend in other categories 30 27 41 28 31 24 42 42 35 Top 3 increased spend 1Q: How has the COVID-19 pandemic affected your company’s budget for the following areas? Note: Figures may not sum to 100% because of responses under “prefer not to answer” option not included in analysis, and because of rounding. Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626); McKinsey & Company B2B Pulse Survey, 2/12–2/26/2021 (n = 3,498) Decreasing Maintaining Increasing IT Hardware Software, telecom/software services Marketing / advertising How has the COVID-19 pandemic affected your company’s budget1 % of respondents
  7. 7. McKinsey & Company 7 As purchasing goes omnichannel, sales models will go hybrid 1Q: Which of the following roles exist in your sales organization? 2Q: You said that your organization has “hybrid sellers”. Please state your level of agreement with the following statements: “Hybrid sellers were recently introduced given the switch to virtual sales due to COVID-19”; “Hybrid sellers will be the most common sales role in my organization over the next 3+ years.” Source: McKinsey & Company B2B Pulse Survey, 2/12–2/26/2021 (n = 3,498) 28% 77% 85% of B2B organizations have hybrid sales roles today1 of those with hybrid sales roles introduced this role given the switch to virtual driven by COVID-192 expect hybrid sellers will be the most common sales role in their organization over the next 3 years Hybrid sellers are representatives who interact with customers via video, phone, apps, and occasional in-person visits
  8. 8. McKinsey & Company 8 31 95 18 91 Already 0 Q12021 Q42021 Q22021 Q32021 20 Q12022 40 60 80 100 Expected return to in-person meetings and events1 % of respondents But the availability of in-person customer interactions doesn’t mean sellers are going back2: Only Say they are likely to be in person 76-100% of the time Say they are likely to be in person less that half the time 15% 47% Sales meetings Customer events Companies expect in-person sales meetings and customer events to resume in 2022, but sellers will be judicious with in-person meetings 1 Q: When do you expect your company to do the following: Have in-person sales meetings? Have in-person customer events? 2 Q: When your sales force is capable of having in-person meeting with customers, what percent of customer interactions do you think will be in-person vs. remote? Source: McKinsey & Company B2B Pulse Survey, 2/12–2/26/2021 (n = 3,498)
  9. 9. McKinsey & Company 9 50 45 25 30 35 60 40 55 65 Pre-COVID-19 Aug 2020 Feb 2021 E-commerce became the most popular route to market for B2B companies during the pandemic year, with in-person rebounding 1Q: Now today, in what ways is your company’s product or service sold during COVID-19? 2Q: In what ways was your company’s product or service sold before COVID-19? Note: Figures may not sum to 100% because of rounding Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626); McKinsey & Company B2B Pulse Survey, 2/12–2/26/2021 (n = 3,498) Top 3 ranked effective by respondents: E-commerce 41% In-person: 37% Videoconference: 31% In what ways was your company’s product or service sold before and during COVID-191,2 % of respondents E-commerce Email In-person Phone Videoconference Online chat
  10. 10. McKinsey & Company 10 To capture growth, B2B companies must overcome specific channel conflict pain points 1Q: How much do you agree or disagree with the following statements? “My sales team has faced channel conflict with e-commerce being used more often in multichannel sales”; “My company has faced challenges as a result of field sales roles working from home similar to an inside sales role”; “The growth in e-commerce has negatively impacted my company’s direct and indirect sales channels.” Source: McKinsey & Company B2B Pulse Survey, 2/12–2/26/2021 (n = 3,498) 68% 77% 60% of decision makers say their sales team has experienced increased channel conflicts as result of more omnichannel sales have faced challenges with field reps now working from home of the market today is dominated by e-commerce, which is also viewed as potentially cannibalizing other direct or channel sales

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