As consumers have shifted how they shop and what they buy during the COVID-19 pandemic, business buyers are also altering their spend. Media buying will change because of the Coronavirus outbreak, but B2B buyers will alter several other spending categories as the economic fallout progresses worldwide.
Before this global health crisis, US B2B buyers were concerned about the possibility of a recession. According to Avionos’ November 2019 survey, more than 80% of US B2B buyers said they were concerned about a recession in 2020.
When asked what would help them get through a recession, US B2B buyers’ answers focused on vendors providing better resources: roughly a third said they would need more quality and accurate information about what they are buying, while 23% of respondents noted they would need to have more confidence in the purchases they are making.
Now that a recession is here, companies are going to cut spending in order to mitigate losses, prevent layoffs and in a worse case scenario, avert going out of business.
In many cases, products and services that aren’t essential will be the first to get cut, at least in the short term. For B2B companies selling products that aren’t considered essential during this time, the next few months will not be easy. They should not pursue the hard sell or be too aggressive with marketing and sales touchpoints, which will come off as insensitive and turn off buyers who face tough decisions about where they need to cut. Instead, B2Bs should show compassion and offer solutions and deals while being consultative. This might not bring in revenues right away, but it will ultimately help them maintain and restore relationships, which will be beneficial once budgets return to normal.
Some B2B buying will still occur and be necessary, especially for B2B tech buyers seeking software to enable remote working. An email survey conducted in mid-March by software review site TrustRadius asked software buyers worldwide about how they expect COVID-19 to impact their spending. Four in ten noted that they will spend more at least initially in order to make sure their employees can work from home with limited hiccups. That same survey found that 30% of respondents of those spending more purchased videoconferencing software, and 15% bought security software, such as VPNs and firewalls, to keep company information protected while working remote.
About a quarter of respondents said there would be no change in their spending budget, and 15% noted they were unsure. For those landing in the unsure category, TrustRadius asked why, and 39% of that respondent base said it was too early to tell.
Only 18% of respondents from the US B2B buyer sample said they would spend less because of the pandemic. Roughly 30% of those spending less were looking to make “aggressive cuts.” And although there is uncertainty about when the pandemic will cease, 69% of those reducing spend said that they plan to return to previous budget allocations for software purchases.
What Marketers Can Do Now
- Be patient as buyers, including current customers, are making hard decisions.
- Audit, then cut or rework existing marketing plans to ensure they are relevant and not in bad taste because of the new reality due to COVID-19.
- Brand messages and marketing should add value and not noise.
- Pivot in an authentic way to show how the company will serve those affected by the pandemic.
- Review what email communications are going out. Make sure they serve the audience in a practical way.
- Implement tactics to maintain client trust and relationships.
Need assistance evaluating your marketing strategy and plans? Scheduling a call or email Lori Berson at lberson@BersonDeanStevens.com.
BersonDeanStevens has been a recognized brand strategy and marketing leader for over 25 years, including over a decade in Marketing Automation. We work in partnership with you to differentiate your brand and achieve your business goals. Client list.