B2B Sales and Purchasing
The crisis response of Q1 2020 has shaped B2B sales practice in Q1 2021. Not only have digital selling techniques become more widely accepted, but the expectation is that they’re here to stay, because most people prefer them.
Pre-pandemic sales meetings meant early starts, maybe with jetlag thrown in. The sellers had to arrive well-turned out and on time before trying to connect their laptops to the in-house technology. Various stakeholders on both sides were typically absent. In the end, 20 minutes of the slot were lost to small talk, late arrivals and setting up. Several follow-up actions would be requested but, depending on the transport and roaming options, it could take a while for sales teams to get to them.
Of course, the best companies already had efficient ways of supplying potential clients with follow-up material and sales meetings could be productive, but it was hard for the sellers. And, if they were facing challenges, it was maybe even worse for the buyers. Typical sales meetings weren’t ideal for either party.
The Challenge of B2B Purchasing
The Purchasing Department has its own deliverables but often suffers from a lack of subject matter expertise on the product offering in question. They could be working with as many as 10 further stakeholders, each with their own red lines. For technology categories, things have often moved on so much since the last big purchase that it takes a great effort, even for the service owners, to establish exactly what problem needs to be solved and what the relevant solutions may be. Faced with these challenges, it is not surprising that Gartner found only 17% of a purchasing process is spent interacting with vendors.
Digital Selling Channels
The two big channels to excel over the past year are video meetings and live chat. A purchasing manager (or other stakeholder) can research complicated product and service classes online by watching focused, bitesize video and reading dedicated pages supported by live chat. By having trained individuals supporting the chat function it is possible to progress prospects towards a purchase decision although the process is not as linear as a traditional sales pipeline would suggest. McKinsey found that complexity was a bigger barrier to completion than expense; 70% of B2B respondents would consider spending up to $50,000 through purely digital interaction with 59% going beyond that and 27% prepared to pay over $500,000.
It is important for B2B sales and marketing functions to work in parallel. Purchasing teams go through cycles during which they develop an understanding of their company’s needs before considering the options available to them. Selecting a vendor comes much later in the process and the most successful companies are those that help the client reach that point by delivering discreet pieces of information when and where the client needs them. The sales team is one part of a multichannel communication operation but not the only one. As a result, they have become less influential. Their role is changing to be more about facilitating the learning and helping buyers to complete tasks in their discovery processes so that they feel confident about their choices.
Video conferencing via Zoom, Teams, and Webex – to name three – has been widely adopted to replace live meetings and they suit the new sales and purchasing paradigm. As people have acclimatized to the technology, they have found it preferable to in-person meetings. Online meetings make it easier to have all relevant parties present without creating an imbalanced dynamic and it’s simple to toggle between slide decks, media and web-cams. Prospective clients can direct the topic of conversation and the sales side find it easier to have data and expertise to hand. Rather than trying to understand a full offering in one go, features and benefits can be discussed from different perspectives with deep dives where necessary. It is also simple for individuals to have one-to-one sidebars with the most appropriate person on the other side.
Another option for large firms making complex purchasing decisions is to engage an independent consultancy that retains full visibility of its specialist markets. One of the reasons for this is system integration, which has become critical. When considering one solution, it is far more important now to know how it would work as part of a wider ecosystem. A product can serve its own narrow purpose but if it fails to integrate with others then it falls short of modern requirements because it does nothing to streamline daily workflows. Typical symptoms include users having to flip between systems, incomplete fields on screen, duplicate data entry and task avoidance. Companies that want to meet these challenges step back and realize that there need to be some overriding strategic principles if a technology ecosystem is going to work efficiently. We have worked for years to get the heavy lifting of a purchasing process complete, developing a clear picture of the transformation to be made before any thought of selecting vendors. Whether a consultancy is engaged or not, this is what tends to pull a wider group of stakeholders into the decision-making process.
Of course, B2B businesses that have to make complex purchasing decisions are likely to be selling complex offerings too. On the Trading Floor, the most complex asset classes and bespoke investments are still transacted with a high level of human interaction. While live chat functionality may not be relevant to transacting business as an investment banker, 2020 saw video and IM becoming increasingly important to sales processes. In turn, this means that there is an elevated requirement for IT and Purchasing departments to ensure that they select and support multiple communications services that integrate effectively. This needs to be achieved in compliance with industry regulations and regulators have made it clear that COVID-related leeway is no longer an option. For capital markets, this takes the demands of data capture and trade reconstruction into new territory.
The Future of B2B Sales
As the options for business travel and face to face meetings increase in 2021 it will be interesting to see how things develop. More governance can be achieved through digitally supported meetings, regardless of the industry. They offer lower risks and costs, and the ubiquitous webcam has effectively killed the “putting a face to a name“ cliché. Despite this, business travel will step back up but there will need to be some compelling justifications.