McKinsey Survey: Global B2B decision maker response to COVID-19 crisis
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The document discusses the shift in B2B supplier interactions towards remote and digital self-service models following COVID-19, with approximately 70-80% of decision-makers preferring these methods for ease and safety. A significant proportion of B2B companies believe that the new remote sales model is as effective or more effective in reaching existing and new customers compared to pre-COVID practices. Additionally, many organizations have reduced their in-person sales teams and physical locations as part of this transition.
McKinsey Survey: Global B2B decision maker response to COVID-19 crisis
- 1. McKinsey & Company 1 22 22 36 35 48 49 44 46 31 29 20 19 Considering and evaluating new suppliers Identifying and researching new suppliers Ordering Reordering Most B2B supplier interactions are remote or digital self-service Current way of interacting with suppliers’ sales reps during different stages1,2 % of respondents 1. Q: How do you currently interact with sales reps from your company’s suppliers during the following stages of interactions? 2. Figures may not sum to 100% because of rounding. In-person interactions Remote human interactions Digital self-service interactions Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626) of the time, B2B decision makers have in-person interactions with company suppliers ~20–30%
- 2. McKinsey & Company 2 23 23 36 35 45 48 43 44 32 29 21 20 Identifying and researching new suppliers Considering and evaluating new suppliers ReorderingOrdering This current remote and self-service sales model is exactly what is preferred by B2B buyers Preferred way of interacting with suppliers’ sales reps during different stages1,2 % of respondents 1. Q: How would you prefer to interact with sales reps from your company’s suppliers during the following stages of interactions? 2. Figures may not sum to 100% because of rounding. In-person interactions Remote human interactions Digital self-service interactions of B2B decision makers prefer remote human interactions or digital self-service instead of in-person interactions, citing ease of scheduling, savings on travel expenses and safety as their top three reasons why ~70–80% Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626)
- 3. McKinsey & Company 3 15 31 29 20 6 August 11 Three in four B2B decision makers believe the new (mostly remote) sales model is as effective or more so now than prior to COVID-19 11 25 29 28 7 April 28 Much less effective Somewhat less effective As effective as before Somewhat more effective Much more effective Effectiveness of new sales model in reaching and serving customers1,2 % of respondents 1. Q: How effective is your company’s new sales model at reaching and serving customers? 2. Figures may not sum to 100% because of rounding. Source: 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) 65% as effective or more so compared to prior to COVID-19 75% as effective or more so compared to prior to COVID-19
- 4. McKinsey & Company 4 B2B decision makers believe the new model is even more effective for prospecting as it is for existing customers Effectiveness of new sales model at reaching and serving customers and in acquiring new customers1,2,3 % of respondents 15 33 28 20 5 August 11 Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626) Somewhat less effective As effective as before Somewhat more effective Much more effective Much less effective 76% as effective or more so compared to prior to COVID-19 1. Q: How effective is your company’s new sales model at reaching and serving customers? 2. Q: How effective is the new sales model in acquiring new customers (eg, those that have never purchased from your organization before)? 3. Figures may not sum to 100% because of rounding. Current customers New customers August 11 15 31 29 20 6 75% as effective or more so compared to prior to COVID-19
- 5. McKinsey & Company 5 Belief in the effectiveness of new (mostly remote) sales model has increased in all countries since April Effectiveness of new sales model in reaching and serving customers1,2 % of respondents 15 11 16 8 12 38 21 18 31 24 28 25 29 30 46 31 21 45 35 27 29 42 33 38 28 37 23 35 15 30 21 29 20 23 29 23 21 23 15 26 15 16 18 20 11 65 46 All countries 37 7 France Germany India 43 Italy 6 JapanSpain UK China US 4 6 6 3 S. Korea 6 Brazil Much less effective Somewhat less effective As effective as before Somewhat more effective Much more effective 1. Q: How effective is your company’s new sales model at reaching and serving customers? 2. Figures may not sum to 100% because of rounding. % of respondents choosing “as effective” or more so compared to prior to COVID-19X% Percentage-point change in respondents choosing “as effective” or more so compared to April Europe APAC 10% 22% 7% 6% 13% 17% 11% 2% 4% 7% 19% 9% 75% Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020, (US n = 602), (France n = 206), (Spain n = 200), (Italy n = 401), (UK n = 206), (Germany n = 401), (China n = 408), (S. Korea n = 200), (Japan n = 200), (India n = 400), (Brazil n = 402) 71% 67% 74% 73% 75% 81% 70% 74% 78% 77% 74%
- 6. McKinsey & Company 6 B2B decision makers believe the new (mostly remote) sales model is as effective for prospecting or more so now than prior to COVID-19 Effectiveness of new sales model in acquiring new customers1,2 % of respondents Somewhat less effective As effective as before Somewhat more effective Much more effective Much less effective 1. Q: How effective is the new sales model in acquiring new customers (eg, those that have never purchased from your organization before)? 2. Figures may not sum to 100% because of rounding. 15 10 15 11 13 35 8 22 19 33 22 31 29 33 30 44 31 30 46 38 27 28 35 32 38 25 34 25 35 15 27 23 27 20 28 26 18 22 24 15 25 14 15 15 22 10 6 5 France 5 2 GermanyAll countries 4 6 5 Italy 5 Spain Japan 3 UK 7 China US 7 4 India 6 S. Korea 3 Brazil 77%63% 69%76% 70%75% 82%73% 73%81% 83%80% % of respondents choosing “as effective” or more so compared to prior to COVID-19X% Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020, (US n = 602), (France n = 206), (Spain n = 200), (Italy n = 401), (UK n = 206), (Germany n = 401), (China n = 408), (S. Korea n = 200), (Japan n = 200), (India n = 400), (Brazil n = 402) Europe APAC
- 7. McKinsey & Company 7 38 32 12 15 1 under $50,000 $500,000 to < $1 million $50,000 to < $500,000 I would not make a purchase via end to end digital self service $1 million or more Remote and self-service is not just for low-value purchases; a majority spend $50K or more Maximum order value you would purchase through end-to-end digital self-service and remote human interactions for a new product or service category1,2 % of respondents 1. Q: What is the maximum order value that you would purchase through end-to-end digital self-serve and remote human interactions for a new product or service category? 2. Numbers do not add to 100% because “I don’t know” option offered was not included for analysis. would spend more than $50,000 on a completely self-serve or remote interaction 97% of B2B buyers might make a purchase in a fully end-to-end, digital self-service model ~60% Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626)
- 8. McKinsey & Company 8 Before COVID-19 During COVID-19 The majority of B2B companies have shifted their go-to-market model from traditional to digital, with heavy reliance on video and online chat 1. Q: In what ways was your company’s product or service sold before COVID-19? 2. Q: Now today, in what ways is your company’s product or service sold during COVID-19? Go-to-market sales model during COVID-191,2 % of respondents 61 52 13 38 47 40 52 29 50 13 53 48 49 55 Traditional Digital interaction with sales rep Digital self-serve In-person Via videoconference (eg, sales reps interacting with customers via Zoom, Teams, Skype, etc.) Phone Email Online chat (eg, chatting with customers via web chat, email, etc.) E-commerce (eg, products/services sold directly online with no sales rep involved) Fax X% % change % change -52% -3% -6% 41% 1% 23% 6% Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626)
- 9. McKinsey & Company 9 1. Q: Approximately what percentage of your company’s revenue before COVID-19 was driven by…/during COVID-19 is now driven by… 2. Figures may not sum to 100% because responses under “other” option offered were not included in analysis, and because of rounding. Before COVID-19 During COVID-19 Revenue from videoconference, online chat, and e-commerce has increased substantially 6% 4% 69% 8% 31% 17% X% % change Source of revenue before and during COVID-191,2 % of revenue % change 28 13 2 11 13 11 20 13 14 3 19 14 14 23 Traditional Digital interaction with sales rep Digital self-serve In-person Via videoconference (eg, sales reps interacting with customers via Zoom, Teams, Skype, etc.) Phone Email Online chat (eg, chatting with customers via web chat, email, etc.) E-commerce (eg, products/services sold directly online with no sales rep involved) Fax -55% Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626)
- 10. McKinsey & Company 10 Video is almost always ‘more helpful’ than audio alone 79 76 76 77 14 16 15 16 8 8 9 7 1. Q: How much more or less helpful is it to use video (eg, Zoom, WebEx, Teams) vs phone only in the following situations? 2. Q: What percentage of your customer meetings now take place via videoconference (eg, Zoom, Teams, Skype, etc.) where participants can “see” one another via video? 3. Q: If you are unable to physically meet in-person, for which of these commercial activities do you prefer video in addition to audio? Helpfulness of video (eg, Zoom, WebEx, Teams) vs phone only in different situations1 % of respondents Meeting with others in your company Meeting with existing customers Meeting with prospects Meeting with vendors/suppliers More helpful to use video Neutral Less helpful to use video of B2B customer meetings now take place via videoconference (eg, Zoom, Teams, Skype, etc.) where participants can see one another via video2 53% B2B buyers also believe video is preferred for:3 Demonstration of products/services Pricing negotiations Customer support/ trouble shooting Day-to-day account management Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626)
- 11. McKinsey & Company 11 Screensharing and seeing one another are the most helpful features of videoconferencing 1. Q: What features/functionality of video conferencing are most helpful for you? 75 67 40 38 36 Most helpful features/functionality of videoconferencing1 % of respondents ranking in top 3 Screensharing Annotation Breakout rooms Whiteboards Seeing one another Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626)
- 12. McKinsey & Company 12 31 17 15 18 19 One in three B2B companies has already reduced both their FTEs for in-person sales and number of physical locations 30 17 20 18 1637% companies reduced their number of people (FTEs) on in-person sales teams by more than 4% due to COVID-19 34% companies reduced their number of physical locations using in-person sales by more than 4% due to COVID-19 Number of people (FTEs) in in-person sales Number of physical locations3 using in-person sales Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626) 1. Q: How has your organization changed your in-person sales team structure? 2. Figures may not sum to 100% because of rounding; “not applicable” option was given; however not included for analysis. 3. Dealerships, stores, branches, etc. Reduced +11% Reduced 4–10% About the same (within ±3%) Increased 4–10% Increased +11% Changes to in-person sales team structure (changes already made)1,2 % of respondents
- 13. McKinsey & Company 13 In most countries, one in three B2B companies has already reduced their FTEs for in-person sales… 1. Q: How has your organization changed your in-person sales team structure? 2. Figures may not sum to 100% because of rounding; “not applicable” option offered was not included for analysis. Reduced +11% Reduced 4–10% About the same (within ±3%) Increased 4–10% Increased +11% Changes in number of people (FTEs) in in-person sales (changes already made)1,2 % of respondents x% percentage of respondents who indicated reduction of more than 4% due to COVID-19 12 8 10 7 10 31 13 12 17 15 13 17 17 13 14 22 11 17 13 12 15 34 43 40 39 38 39 37 49 15 35 23 32 22 23 24 21 26 20 28 20 18 27 17 19 15 13 11 10 16 16 8 13 19 12 32 16 ItalyAll countries 6 France Germany Spain UK China Japan India S. Korea Brazil US 65 31% Europe APAC 36% 35%37% 33%36% 36%42% 35%39% 49%37% Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020, (US n = 602), (France n = 206), (Spain n = 200), (Italy n = 401), (UK n = 206), (Germany n = 401), (China n = 408), (S. Korea n = 200), (Japan n = 200), (India n = 400), (Brazil n = 402)
- 14. McKinsey & Company 14 …and they’ve reduced their number of physical locations 1. Q: How has your organization changed your in-person sales team structure? 2. Figures may not sum to 100% because of rounding; “not applicable” option offered was not included for analysis. 3. Dealerships, stores, branches, etc. Changes in number of physical locations3 using in-person sales (changes already made)1,2 % of respondents Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020, (US n = 602), (France n = 206), (Spain n = 200), (Italy n = 401), (UK n = 206), (Germany n = 401), (China n = 408), (S. Korea n = 200), (Japan n = 200), (India n = 400), (Brazil n = 402) 36%36% 28%35% 28%34% 30%45% 27%42% 51%34% x% percentage of respondents who indicated reduction of more than 4% due to COVID-19 12 11 10 12 7 30 15 7 15 14 19 13 8 13 24 7 17 9 9 15 37 49 45 38 44 41 34 55 20 33 24 42 20 23 19 19 27 19 21 16 18 30 24 14 15 13 9 17 18 15 9 12 16 12 27 13 GermanyAll countries France 6 Italy Spain 6 UK China Japan India S. Korea Brazil US 6 2 Europe APAC Reduced +11% Reduced 4–10% About the same (within ±3%) Increased 4–10% Increased +11%
- 15. McKinsey & Company 15 -25-30 -20 5-20 -10-15 10 -5 0 10 -25 -15 -10 -5 0 5 Consumer/retail Advanced industries Technology, media, and telecom Global energy and materials Pharma and medical products Travel, transportation, and logistics Global finance, banking, and insurance The travel, transport, and logistics industry is seeing the sharpest reduction in FTEs for in-person sales and physical locations Number of physical locations using in- person sales Number of people (FTEs) in in-person sales Net addition1 of people (FTEs) in in-person sales and number of physical locations (changes already made)2 % of respondents 1. Net addition: % of respondents reporting reduction subtracted from % of respondents reporting increase. 2. Q: How has your organization changed your in-person sales team structure? Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626)
- 16. McKinsey & Company 16 0 5-15 -5-30 15 -15 -10-25 20-20 10 -35 -30 -25 -20 -10 -5 0 5 10 15 20 25 India Brazil France Spain S. Korea Germany ItalyUK China Japan US Most countries are seeing a sharp reduction in both FTEs for in-person sales and physical locations Number of physical locations using in- person sales Number of people (FTEs) in in-person sales Net addition1 of people (FTEs) in in-person sales and number of physical locations (changes already made)2 % of respondents 1. Net addition: % of respondents reporting reduction subtracted from % of respondents reporting increase. 2. Q: How has your organization changed your in-person sales team structure? Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020, (US n = 602), (France n = 206), (Spain n = 200), (Italy n = 401), (UK n = 206), (Germany n = 401), (China n = 408), (S. Korea n = 200), (Japan n = 200), (India n = 400), (Brazil n = 402)
- 17. McKinsey & Company 17McKinsey & Company 17 Contents The next normal of sales is here to stay—what it will take to succeed
- 18. McKinsey & Company 18 The next normal is here to stay—companies expect the new sales model to persist 1. Q: 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. Staying power of new sales models1 % of respondents 89% are “very likely” and “somewhat likely” to sustain these shifts 12+ months after COVID-19, up from 80% in April 2020 32 48 17 4 46 43 8 3 April 28 August 11 Very likely to sustain 12+ months after Somewhat likely to sustain 12 months after Unlikely to sustain 12 months after Made no GTM changes Source: 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)
- 19. McKinsey & Company 19 11 29 30 19 11 In-person meetings might not return at scale until 2021; even then, more than half are expected to remain virtual 14 46 32 8 40% of B2B companies expect to have in-person meetings again in 2021 60% of B2B companies expect to have less than 50% in-person interactions even when their sales force is able to have in-person meetings again Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626) Quarter when sales force is expected to have in-person meetings again1 % of respondents In-person vs remote interactions (when your sales force is capable of having in-person meetings)2 % of respondents 1. Q: When do you expect your sales force to have in-person meetings again? Figures may not sum to 100% because of rounding. 2. Q: When your sales force is capable of having in-person meetings, what percent of interactions do you think will be in-person vs remote? Figures may not sum to 100% because of rounding. 76–100% in-person 51–75% in-person 26–50% in-person 1–25% in-person Aug–Sep 2020 Oct–Dec 2020 Jan–Mar 2021 Apr 2021 or later Already having in-person meetings
- 20. McKinsey & Company 20 11 9 8 10 15 9 24 8 16 13 14 29 28 20 34 31 39 9 15 41 24 38 34 30 23 36 31 25 30 36 21 33 33 31 28 19 28 20 17 16 14 36 12 17 13 14 17 11 12 16 8 14 8 17 29 16 6 BrazilSpainAll countries France Germany Italy UK China Japan India S. Korea US 2 4 3 In-person meetings might not return at full scale until 2021 40% Quarter when sales force is expected to have in-person meetings again1,2 % of respondents 1. Q: When do you expect your sales force to have in-person meetings again? Figures may not sum to 100% because of rounding. 2. Figures may not sum up exactly due to rounding. Aug–Sep 2020 Oct–Dec 2020 Jan–Mar 2021 Apr 2021 or later Already having in-person meetings % of respondents who expect sales force to have in-person meetings again no earlier than in 2021x% Europe APAC Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020, (US n = 602), (France n = 206), (Spain n = 200), (Italy n = 401), (UK n = 206), (Germany n = 401), (China n = 408), (S. Korea n = 200), (Japan n = 200), (India n = 400), (Brazil n = 402) 37% 28% 44% 46% 48% 12% 39% 49% 40% 51% 48%
- 21. McKinsey & Company 21 Even once in-person interactions become feasible again, more than half of all interactions are expected to remain virtual 1. Q: When your sales force is capable of having in-person meetings, what percent of interactions do you think will be in-person vs remote? 2. Figures may not sum up exactly due to rounding Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020, (US n = 602), (France n = 206), (Spain n = 200), (Italy n = 401), (UK n = 206), (Germany n = 401), (China n = 408), (S. Korea n = 200), (Japan n = 200), (India n = 400), (Brazil n = 402) 14 16 18 17 15 17 8 18 10 17 15 46 51 52 43 59 42 49 37 38 40 47 47 32 26 26 33 23 35 39 32 39 44 25 31 8 7 7 14 13 11 10 8 USChinaItalyAll countries France Germany UKSpain Japan 6 India S. Korea Brazil 554 6 60% Percent of interactions (in-person vs remote) when your sales force is capable of having in-person meetings1,2 % of respondents 76–100% in-person 51–75% in-person 26–50% in-person 1–25% in-person % of respondents who expect their salesforce to have no more than 50% in-person interactions once feasible againx% Europe APAC 67% 70% 60% 74% 59% 57% 55% 48% 46% 64% 62%
- 22. McKinsey & Company 22 Most companies believe that their sales teams need both skill building and technology for effective remote selling 1. Q: How much do you agree or disagree with the following statements? 2. Q: Thinking about your company’s future in the context of COVID-19, how much do you agree or disagree with the following statements? 85% 83% 81% Tech beyond videoconference Additional skills for in-person to remote transition Basic video technology “Strongly agree”, “agree” and “somewhat agree” 68% 76% Redesigned sales trainings New profiles of sales reps of B2B companies believe that they have both capabilities and technology to sell today, however… 87% 81% Have both capabilities and technology to effectively sell today Need both skill building and technology ~90% companies believe that they need to further develop both capabilities and technology 4 in 5 B2Bs believe that their sales teams need to adjust to following terms1 % of respondents Skills and technologies needed2 % of respondents Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626)
- 23. McKinsey & Company 23 One in two B2B companies is looking to potentially reduce their number of sales reps as they refine their overall sales model 37 58 Expect to reduce going forward Have already reduced 1.5X 1. Thinking about your company’s future in the context of COVID-19, how much do you agree or disagree with the following statement? 2. How has your organization changed your in-person sales team structure? 3. For example, ability to shift sales rep territories or quotas mid-year to target-higher value opportunities. 58% 72% 81% 83% Will be decreasing the number of sales reps Need to switch to a different, more dynamic resourcing model Will be redefining sales roles to focus on different sales methods Will introduce a more agile sales planning process3 B2B companies believe that they need to adjust to the following terms as new normal1 % of respondents …and as an implication, future reductions in the number of sales reps are expected1,2 % of respondents “Strongly agree,” “agree,” and “somewhat agree” Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 3,626)