As consumers have shifted how they shop and what they buy during the COVID-19 pandemic, business buyers are also altering their spend. We already noted how much 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. In a November 2019 survey from digital commerce solution provider Avionos, 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 looking more likely, companies are going to cut spend 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 reviews 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.
"No one is buying, but everyone is learning," said Michael Brenner, founder and CEO of B2B content agency Marketing Insider Group. "Outside of the healthcare sector, remote work tech and collaboration software, B2B buyer's just aren't buying right now. But they are researching online.
"My analysis [in late March] of more than a dozen B2B sectors found that daily B2B keyword searches are down on average 35%. We are advising clients to slow or stop their spend on promotional ads, continue publishing educational content and even to take advantage of low CPMs in digital to promote helpful guides and webinars," he said.
For now, B2B marketers need to be patient as their buyers, including current customers, are making hard decisions. Meanwhile, a priority should be to audit existing marketing plans. Are there any that are irrelevant or in bad taste because of the new reality bought on by COVID-19? If so, cut it or rework it. What email communications are going out? Do those serve the audience in a practical way? How can brand messages and marketing add value and not noise? Is there a way to pivot in an authentic way to show how the company will serve those affected by the pandemic? If so, marketers should strongly consider implementing those tactics to maintain client trust and relationships.