What began as a regional outbreak quickly spread to a global pandemic. The COVID-19 impact has spared no one or no business. While a few ecommerce sites are experiencing a robust increase, most companies were hit economically and are scrambling to find ways to continue to conduct business.
The full effects of COVID-19 on the B2B market in the coming months is still unclear. However, as worldwide governments try to contain the virus, we are aware of some ways in which B2B space will feel the impact:
COVID-19 Impact on Supply Chains
Governments all over the globe are issuing business shutdowns and citizen quarantines, especially in workplaces. As a result, plants, factories, and manufacturing companies are halting production. This is resulting in a dramatic slowdown or stoppage to supply flow for many B2B companies. For instance, as China shut down manufacturing plants, big tech companies in the U.S. quickly felt the impact.
According to the Institute of Supply Chain Management, 75% of companies experienced some sort of disruption in their supply chain. 80% predict they will see disruption in the coming weeks and months. As more and more suppliers shut down manufacturing efforts, B2B companies will be cut off from deliveries. This will impact revenue.
Social Distancing Drives Demand for Ecommerce
Normal in-person interactions of all types have been banned in countries worldwide—particularly for brick-and-mortar shops. According to Technomic, 52% of consumers are avoiding crowds and 32% are leaving their house less often because of coronavirus. Additionally, Coresight Research reported that almost 75% of U.S. consumers will avoid shopping and/or doing business in person. They will instead resort to online buying and web interactions only. These numbers are expected to spike in the coming days, weeks, and/or months. This is giving B2B businesses one option—sell online.
While many B2B businesses are well-equipped to manage online sales, others may not have a digital sales strategy. This makes it difficult for these businesses to adapt and keep revenue up.
Even if businesses are well-equipped to rely on e-commerce for the coming weeks, remember that inventory will be impacted by a strained supply chain. Additionally, businesses should expect a bottleneck effect in their delivery capability, since the volume of online orders is projected to spike.
Without in-office presence, many B2B products and services will see a drop in sales. Additionally, certain B2B companies that operate via delivery will have to compete with Amazon, the delivery powerhouse that many businesses default to in a time of need.
Marketers Must Focus on Digital Marketing
Live marketing events are being cancelled or postponed worldwide. In fact, according to eMarketer, the total loss from canceled events in the U.S. will surpass $500 million. Many companies will undergo a net loss in terms of their travel expenses vs. expected new client and revenue growth from these events.
In-person events and trade shows made up almost 40% of engagements and 53% of conversions for B2B marketing teams as of January 2020—just before the virus spread. U.S. Companies will obviously have to rethink this to make up for the loss.
Digital marketing efforts will have to take the place of live events, trade shows, and conferences. In other words, marketing teams will have to adjust their projected revenue from each channel and redirect into digital channels. They will also have to collaboratively plan with sales teams more actively in order to meet their goals during this difficult time.
One thing that will hopefully benefit these B2B digital marketing efforts is the fact that more consumers will be online in the coming weeks. As more people spend time at home, avoid social contact, and set up home offices, consumer usage of digital marketing channels—such as social media, paid search, and webinars—will likely increase. This is a perfect time to amplify your strategy to attract new customers online.
Consider that many people will turn to social media to stay connected with friends, family, and colleagues as they quarantine at home. Your sponsored and paid ads have the potential to get a wider viewership than normal. Hopefully, this will lead to unprecedented revenue for your team in these channels.
B2B Sales Teams Must Think on Their Feet and Sell on the Go
Many salespeople have an established selling system in their everyday routine. Although these systems may differ from company to company, salespeople stand by them and they work. Now, many employers are sending salespeople to work from home, which is throwing off millions of routines. These salespeople must find a way to adapt to being cut off from team collaboration and selling from the comfort of their workplace. They will have to integrate on-the-go selling systems that facilitate mobile lead capturing and calling quickly.
Salespeople need to keep in mind that their business may be entirely digitally operating. This means their consumer base is finding their company online and are using digital methods to get in touch.
National sentiment is in a state of panic. Emotions drive consumers, not logic when they buy, salespeople will have to adjust to capture buyer demand right as it happens. They will have to call more quickly, place customer pain points at top-of-mind and focus on their value proposition to close sales.
B2B salespeople should also keep in mind that an effective nurture strategy may save their annual goal this year. If sales are slow in the coming months due to the coronavirus’ economic impact, focus on filling the funnel now. Then, keep nurturing those prospects as the year progresses.
Actions to Take
If you work in the B2B space and are concerned about the health of your business during this difficult time, know that there are ways to combat the situation and keep selling. Remember that your target market is spending more time online, which you can use to your advantage. For instance, delve into digital marketing strategies and amplify your e-commerce plan.
If cash flow concerns leave you wondering how you will make the switch to digital and ecommerce platforms, while keeping your business running, contact Allied Financial Corporation. We provide accounts receivable financing to help you through the COVID-19 impact and to provide funds to help you invest in your future.