As the world comes to terms with the impact of the coronavirus pandemic, organizations worldwide are grappling with how their businesses are likely to be impacted by the crisis. While much has been written about the impact on B2C businesses, B2B businesses are so far assumed to be less affected. We wanted to dive into this a little deeper and understand how buying behaviour has changed and is likely to change after the crisis and what implications it has for B2B sales.

At SDI, we focus on B2B lead generation for modern SAAS based products in mid to large enterprises. As part of these projects, we reach out to C-suite and senior profiles across functions such as Sales, Business Development, Administration, Human Resources etc. to open conversations.

Our B2B lead generation campaigns put us at the frontline of sales efforts and help us sense early trends and their implications for B2B businesses. After a couple of weeks of observing and analyzing responses across 100+ campaigns, we came across some key trends that are evolving in B2B buying which might continue beyond the current crisis. While these are still just early indicators, we’ve summarised our observations in three parts:

• Overall impact on B2B buying
• Sector & solution wise impact on buying
• Recovery & Implications for B2B sales

Overall impact on B2B buying

Impact on B2B is not as visible yet, but is equally devastating
We don’t want to sugarcoat this; the situation is unprecedented. The initial two weeks were nothing but shock, uncertainty and a lockdown of communication. Most buyers were worried about their families, teams, associates both for their health and their jobs.
While the response rates to our campaigns stayed constant throughout the period, the number of people open to exploring solutions dropped by 50-60% in the first two weeks.

Post recovering from the initial shock, the conversations are largely geared towards getting their own house in order. A few deals which were very close to fruition are being worked upon. If you’re working on opening net new conversations, it’s an uphill task at this point.

New budgets are hard to come by, old ones are being reworked
We had expected that new budgets would be hard to come by in these uncertain times. What we hadn’t quite factored in was the impact on existing budgets. Almost all initiatives which were sanctioned but not kick started are being put on hold as companies look to preserve cash. Even ongoing projects are being worked upon till the nearest logical milestone to be considered for review.

In our reach-outs, we often ask open ended questions to get a sense of budgets for the upcoming quarter. Nearly 35% of the respondents said they had received specific instructions to hold on to existing purchasing conversations even if they were budgeted, while another 30% felt that their organisations were likely to put such a restriction once the lockdown is lifted.

Sector & solution wise impact on buying

Solutions for support functions, expansion worst hit
Solutions addressing issues in daily operations are relatively better off. Companies are exploring options to optimize their operations in the mid to long term even though they might be extremely value conscious. Another area where we saw our response rates improve were for solutions related to logistics and transportation.

Travel, accommodation & recruitment services are the worst hit and will take some time to recover. Solutions for other functions like HR, finance, legal etc. are at best getting lukewarm responses.

SME buying severely impacted as compared to Enterprise buying
While buying has reduced across the board including enterprises, SME buying has come to a complete standstill. For our campaigns targeting SMEs, we saw positive responses dip by over 70% in the first two weeks. Only solutions related to sales enhancement and credit support garnered some amount of positive responses from SME buyers.

Recovery & Implications for B2B sales
Though the current scenario might seem gloomy, we expect buying to show some recovery in the coming months. However some fundamental changes to the buying process are likely to continue post the immediate crisis as buyers adjust to the new world post the crisis.

Deployment time and upfront investments are key criteria for selection
As we recover from the lockdown, companies will be looking to optimize their operations, reduce fixed costs and outsource non core activities. This will create unique opportunities for B2B solution providers.

The buying process however will focus significantly on deployment times and upfront investments. Most buyers we spoke showed complete aversion to undertake a large time & resource consuming deployment at this stage.

‘True’ Subscription models are being preferred
While this flows from the previous point, we cannot emphasise this feedback enough. Most B2B SAAS solutions in India have a subscription model(Pricing/month) but the client is expected to pay upfront for six months to a year. Very few SAAS products have a true monthly subscription model.

Post the lockdown, as the business environment continues to remain uncertain, buyers will be looking at true off the shelf subscription products which they can try out without significant financial and human resources and long term commitment.

End to end solutions will see more traction
In our conversations, we saw much greater interest in end to end solutions rather than piecemeal solutions which sit on top of other systems. Buyer’s we spoke were weary of working with multiple vendors to build a solution. They also showed aversion to solutions that promised merely data aggregation, analysis and reporting no matter how insightful the reporting might be.

Their immediate priority is to look for solutions that can offload a part of their work without having to spend much management bandwidth.

Public spending is leading recovery
One interesting area where we found buyer’s way more active were cases related to public spending. As private entities look to conserve cash, public spending is likely to dominate the buying. These could be direct government spending or organizations associated with government works.

However employment generation seems to be a key criteria while awarding such projects. Tech solutions promoting reduced manpower are not likely to find favor in such projects.

Client Success is regaining well deserved attention
As new sales growth sputters in the short term, businesses need to dedicate special focus on their existing clients. Not only is this important for retention, but a large proportion of new conversations are likely to emerge from existing clients either internally or in terms of references.

This is not to say that client success wasn’t important before the crisis. It certainly was. But as buyer’s turn increasingly risk averse, strong references and verifiable case studies are fast becoming prerequisites for a successful sales conversation.

Right prospecting is key to developing a healthy sales funnel
As new sales conversations dry up, prospecting will be the achilles heel of your sales funnel. As conversations are more likely to drop off in the middle & bottom of the funnel due to pricing or budget constraints, it is imperative to have a strong top of the funnel.

B2B businesses will have to invest more in prospecting on two fronts. They’ll have to increase outreach to spot buyers with both the willingness and ability to invest. Organizations with existing inside sales teams are more likely to successfully adapt to this new way of prospecting without physical meetings. Organizations which have relied on their sales team for prospecting will have to quickly change course or look for options outside to manage costs.

If you feel we can help you with your sales development, please reach out to us here and we’d be happy to share our approach.