Starting with July 4, the UK has been cautiously lifting some restrictions. As large parts of the economy are slowly reopening, and the nation is trying to adjust to “the new normal” of social distancing, we’re also starting to feel the economic impact of the crisis, which, according to the Office for National Statistics, should be the worst since 1979. The possibility of a recession is looming over the UK, but the current context is still driven by uncertainty. We don’t know how big it will be and how many years it will set back the UK, but one thing is certain: local businesses will have a hard time navigating the post-pandemic market.
As a powerhouse of the UK economy, the B2B sector employs more than 10 million people who contribute £1.7 trillion, so it goes without saying that the way B2B organisations respond to upcoming challenges will send ripples across the whole economy. Amidst the current disruption, B2B brands are dealing with an unfamiliar scenario that pushes them towards digital transformation. While some have already managed to shift gears and respond quickly to the crisis, others are struggling to stay afloat.
Opinions are split on whether B2B organisations will survive the crisis.
The COVID-19 has created unprecedented challenges for businesses across all verticals. Most marketers hadn’t been trained to deal with the economic blow of a pandemic, nor did they expect to live an event of this scale in their lifetime. So, from this point of view, COVID-19 is the first true test of resilience for B2Bs.
Global management consulting firm McKinsey surveyed UK B2B professionals, which revealed that post-pandemic behaviours and expectations vary considerably:
- 39% of B2B companies believe that the British economy will rebound in 2-3 months
- Around half of B2B companies have already reduced their budgets.
- Digital sales interactions have passed traditional interactions, and mobile orders have doubled.
- 97% of B2B companies have changed their go-to-market strategy and switched to remote sales.
- Most B2B participating in the survey responded that they would like to keep the current changes after the COVID-19 crisis ends because they were satisfied with the results.
Not all sub-sectors have been hit the same.
Within the B2B community, companies have experienced the COVID-19 pandemic at different intensities. One eMarketer survey, which included B2B respondents from the UK, revealed that tourism, hospitality, and the arts experienced the highest level of disruption (66%), followed by consumer services (60%), and education (52%). Meanwhile, financial services and IT % telecom experienced the lowest levels of disruption (28% and 21%, respectively).
As for the reasons why B2B organisations were most concerned during the COVID-19 crisis:
- 58% were concerned about the impact of COVID-19 on sales and revenue
- 56% were concerned about cash flow
- 52% were concerned about how the disruption would prevent them from executing their business strategy
Compared to other sectors of the economy, B2B does seem to have a potential advantage, however: it was easier for them to switch to the work-from-home model since some were already doing remote work occasionally. According to a survey from Marketing Week and Econsultancy, 51% of B2B companies were prepared to transition to WFH, compared to just 34% of B2C companies. Additionally, only 11% of B2B companies believed that their operations would be compromised by remote work.
What comes after COVID-19? How can B2B companies adapt?
To mitigate the economic impact of the pandemic and help businesses survive, the UK Government has launched programs such as the Self-Employment Income Support Scheme and the Job Support Scheme, which many companies are already considering. These initiatives are part of the reason why 67% of businesses believe they will survive the pandemic. But, as beneficial as furloughs might be for short-term relief, companies still need to adapt and change their long-term strategies. After all, COVID-19 has changed the business landscape significantly. Customer behaviours have changed, new trends have appeared, and there needs to be a fundamental shift in the way B2B companies approach marketing.
Market research becomes more important than ever.
B2B is a key area of research for businesses in general, but after the pandemic, we can expect it to become even more important. Because B2B buyers expect to be treated as partners, not targets, understanding their needs and expectations is crucial: what challenges are they facing during this period? What services do they need? How do they expect your relationship to evolve, and how can you help them overcome these uncertain times? The tactics that worked pre-pandemic might no longer work, so businesses need to invest in market research to find out what their buyers crave.
A change in marketing tone is imminent.
Although it sounds impossible, companies can build trust and strengthen their brand at a time of crisis. But, because COVID-19 uncertainty makes business more sceptical and likely to de-invest, they need to change their marketing messages and adapt to the new reality. Thought leadership, which was a popular strategy before the pandemic, could leave room for more straightforward, solution-focused communication. B2B marketers will have to be more empathetic and resonate with their partners’ needs. It will no longer be enough to say “we can offer you this product”. Instead, the message will have to shift towards “what challenge are you facing that we can help with?” and “let’s work together to think of a creative solution to your problem”.
COVID-19 will accelerate digital transformation
Even before the pandemic, digital transformation was one of the biggest trends in the B2B sector, so when it hit, most B2B companies had already gone digital or were in the process of doing so. Now, we will see this trend become even stronger. As B2B companies discover that digital platforms streamline communication and boost efficiency, they will be more likely to use digital touchpoints to optimise their operations and engage with audiences.