B2B brands are reducing their marketing spend and changing the way they do business in response to the COVID-19 crisis, according to Marketing & Sales: COVID-19 Response, an update of McKinsey & Company’s B2B Decision Maker Pulse.
Worldwide, 62% of B2B firms have cut their marketing budgets, including 57% in the U.S. But 71% apiece have curtailed their spending in the UK and South Korea, along with 69% in India, 68% in Spain and 65% in Japan.
On the positive side, 23% of U.S. firms plan to increase their marketing allocations, second only to 26% in Brazil.
And despite the marketing cuts, 50% of B2B decision makers are optimistic. However, that is down from 55% in early April.
Above and beyond marketing, 50% of U.S. B2B companies have trimmed their general budgets, and nearly 40% of say they will be further reducing their spend in the next two weeks and over the long term.
And their way of doing business is changing — 96% of companies have shifted their go-to-market model to remote selling during the crisis, and 65% now believe this is just as effective — or even more so — than before, up from 60% in early April.
What’s more, 32% say they are “very likely” to sustain these shifts 12 months after COVID-19, and 47% are somewhat likely to do the same.
With people working at home, digital sales are more important. Ecommerce revenue is up nearly 30% since the start of the crisis, and mobile app ordering is up over 250%.
In addition, on a scale of 1 to 100, digital rose in importance for B2B buyers from 47 before COVID-19 to 65 on April 27, a 40% increase. Traditional has declined proportionally.
Similarly, digital has seen a 30% boost in importance among B2B company customers.
Email plays a relatively minor role, with 19% citing emails from sales reps as one of the three most beneficial interactions for researching suppliers.
That’s up from 17% in 2019, but it is greatly overshadowed by live chat, which jumped to 30% this year, versus 16% in 2019.
Supplier websites, Google/web search and online material from suppliers also beat email.
On the other side of this process, 39% decision makers rate emailing their sales rep as the most preferred method of ordering. While down from 46 in 2019, email tops all other forms of sales rep involvement: calling sales rep (33), using call center/customer service and ordering from sales reps in person (27).
McKinsey surveyed 3,600 B2B decision makers in 11 countries and 12 sectors and 14 spend categories.