The pandemic has heavily influenced how businesses operate and many have had to adjust, thus, the traditional business model for most B2B companies has changed. To maximize the efficiency of operations while remaining cost-effective, digitizing sales in the context of the B2B dynamic is the most appropriate solution. In Southeast Asia specifically, the digitization of sales will allow businesses to effortlessly reach their consumers through technology and related-digital solutions. While the global pandemic has certainly impacted B2B sales trends, the challenges faced present businesses with the unique opportunity to revolutionize and digitally transform their operations. Expect Southeast Asian businesses to rapidly embrace the digital revolution.
To understand how B2B sales have been affected by the pandemic and how businesses can recover via digital transformation, read this excerpt from our latest white paper, Transforming B2B Digital Sales in Southeast Asia, which you can read in full here.
The COVID-19 pandemic in 2020 has disrupted economic activities across Southeast Asia (SEA), with some experts predicting the full impact to be on par or even greater than the 1997-1998 Asian Financial Crisis. Global demand has plummeted as supply chains have been severely disrupted and business operations come to a near-complete halt. With unemployment on the rise and declining consumer confidence, slow economic recovery is expected with major SEA economies facing major contractions in 2021.
Prior to COVID-19, IMF initially projected the ASEAN-6 (Indonesia, Philippines, Malaysia, Singapore, Thailand, Vietnam) growth on average at +4.4% for 2020. It has since adjusted that figure to -3.4% on average across the region. The Philippines is expected to be the worst hit, with GDP expected to fall by 14.5% from the pre-COVID GDP forecast.
In addition, economic contraction of major trading partners like China, Japan, United States, and the European Union have massive negative impact on the demand for exports, with their economic GDP growth forecasts at 1.9%, -5.3%, -4.3% and -8.3% respectively.
Effect of COVID-19 Pandemic on B2B Digital Sales
As a result, many major B2B industries in SEA have been severely affected by the widespread pandemic.
- Vietnam’s Ministry of Industry and Trade (MITI) reports that the textile industry in Vietnam is bracing for a 70% fall in number of orders in the second quarter, largely due to reduced demand from major buyers in US and Europe.
- Thailand, the regional vehicle production and export hub, saw a 19.2% decline in car production in the first quarter year-on-year, according to Federation of Thai Industries (FTI). Experts predict the figures to plunge even further to 37% by end of the year.
- Meanwhile, Indonesia, the world’s largest exporter of palm oil, saw exports to fall by 30% to EU and by 64% to US.
Furthermore, with many countries imposing nationwide lockdown measures and border restrictions, many B2B companies in SEA cannot conduct sales like how they would just a few months ago. Traditionally, sales representatives would be sent to meet with potential clients face-to-face or through physical networking at trade events. As B2B sales are conventionally reliant on forging strong and long-term relationships with clients, networking sessions and physical meetings are crucial to source for new businesses.
However, with the current lockdown measures, traditional sales approaches no longer work. Physical meetings cannot take place and networking events are cancelled indefinitely. As a result, many B2B businesses are struggling to stay afloat in this pandemic with a lack of revenue. Most cannot secure new sales deals, even from existing key accounts. They are forced to look beyond existing accounts and markets, with a pressing need to explore new sales approaches to do businesses – digitizing sales being an option.
Opportunities for B2B Sales to Digitize
Southeast Asia (SEA) is heading towards a digital revolution as internet usage continue to surge exponentially. Data use in SEA grew by 29% to nearly 19.5 billion gigabytes’ worth of data per month, more than any other regions in the world. The growth in the internet economy in SEA is very impressive, considering that the mobile broadband subscription was only at 1.3% of SEA population in 2009. Now, it is at almost 85% of the total SEA population in 2017.
B2B industry is directly impacted by this digital shift as its workforce becomes more tech savvy. On top of an increased access to the internet, the age of its workforce is getting younger in the SEA region, with an average of 64% of the population being at the age of 40 and below. Looking at all elements above, it appears that all the conditions are met to make the transition to digitalization the future of B2B sales in Southeast Asia.
As such, B2B buyers in the region have begun embracing the digital revolution even before COVID-19. B2B buyers have increasingly relied on online channels as a supplement or an alternative to meeting sales representatives. Through online media and search engines, B2B buyers can quickly compare across the products and services offered by different companies to make a more informed decision. A recent study showed that a large 94% of B2B buyers conduct online research prior to making a purchasing decision, and 68% eventually make purchases online.
This implies a major shift in B2B buyers’ purchasing behavior, away from traditional sales methods and towards newer digital sales methods.
In a buyers’ path-to-purchase, purchasing steps can be broken down into six parts:
Conventionally, while marketing is responsible for generating awareness and grabbing the interest of potential buyers, the sales team is responsible to pitch and engage them from consideration to the point of purchase. In some cases, the sales team is also responsible for making cold calls or cold visits to potential buyers and engage them end-to-end, from awareness to purchase.
However, with a greater reliance on online channels, marketing now has a much larger influence in a buyer’s path-to-purchase from Awareness to Intent, while sales team should mostly be focusing their efforts in the last phases leading up to a purchase.
49% of B2B buyers mentioned how ads appearing in the research process improved their perception of the company, thus increasing the likelihood of a purchase. 84% of C-suite/Vice president executives indicated that they rely on online media to make purchasing decisions.
With COVID-19, such shift in purchasing behavior is accelerated. B2B companies should take this as an opportunity to establish their online channels to be well positioned to capture new sales leads. B2B industries should brace for significant changes in business environment post COVID-19 and adapt to ride on this new market trends.
Digital Solutions for B2B Sales
Digitizing sales works in tandem with an existing sales team, rather than forming a separate sales channel. The digital solution maximises the internal sales capabilities of a company, through consolidating the know-hows from the best salespersons and providing a high-quality and consistent sales pitch to every potential sales lead. In addition, the sales team can now better utilise its resources to focus on closing the higher quality leads.
Based on our study, there are five key success factors for B2B firms looking to transition to sales digitization: Effective online sales content, prioritise key stakeholders, establish a CRM database, define and track KPIs, and efficient and selective follow-up on leads.
Effective Online Sales Content
Managing the quality of sales content is one of the key success factors for digitizing sales. Traditionally, sales representatives will present the content and adapt actively during physical meetings. Success was then highly dependent on the sales pitch and ability of the individual salespersons.
With digitized sales, businesses should now consolidate the know-how and draw out the best practices and strategies from different sales individuals to craft the most effective sales pitch. This sales pitch can be delivered consistently to all potential clients. This translates to higher conversion rate with a highly controlled and standardized online sales content.
With the content being controlled from a single point of access, any updates to service or product offerings can be performed seamlessly online. This would save substantial time and effort to educate and retrain the sales team on new services or product catalogues.
This also addresses the difficulties in the scale and speed of expansion into foreign markets. Conventionally, B2B companies would need to hire local salespersons to bridge the gap in language and cultural barriers. This can be very costly to sustain in this digital age. With digitized sales, content can now be tailored accordingly to reach out to the different target markets and audiences in the most effective manner.
Managing the quality of sales content is critical to a successful transformation to sales digitization. It requires an integration of industrial experiences with digital expertise to translate a sales pitch from offline to online.
Prioritize Key Stakeholders
Identifying the right target customers is key to maximising your returns on investment (ROI). While digitized B2B sales can indeed cast a wide net to reach out to a vast number of customers, this should be done appropriately to not incur costs unnecessarily on unrelated customers. Our study shows that 35% of B2B online marketers fail to target the customers accurately.
B2B companies should first have a good understanding of who their key customers are, as well as their customers’ decision-making process. The profiling of their customers can be as detailed as obtaining specific locations, industries, roles in the company, key issues faced, gender, age, etc. Companies can even further group their customers into different segments and prioritise targeting customers with a higher lifetime value.
Through digitizing sales, sales pitches can now be delivered directly to key decision makers. This reduces lead time substantially, as compared to the traditional sales approach which could take weeks or even months before reaching key decision makers.
With effective targeting, the quality of leads would increase, and would in turn maximise ROI.
Establish a CRM Database
In line with the need to have a good understanding of their customers, most firms would build and integrate their Customer Relationship Management (CRM) system with their sales digitization strategy. CRM systems though costly, can ensure an effective workflow with clear visibility of every sales prospect that comes in from inquiry to sales. It translates data into useful business information by presenting a clear overview of who the potential customers are. This can then be used to further optimise targeting, which translates to a higher ROI.
Define and Track KPIs
With sales digitization, conducting sales is now dynamic and fast-moving, with an inflow of leads at any point in time. As a result, there is a need for B2B companies to define and establish key performance indicators (KPIs) to accurately track the sales performance and ensure effective cost control. Regular PDCA (Plan-do-checkadjust) cycles should be conducted to review the results and implement improvement strategies to optimise the performance on a regular basis.
Some commonly used performance metrics include:
- Quality of Leads – Typically, B2B companies would first establish a list of criteria to qualify every lead they receive. The percentage of leads that are qualified should be monitored closely, in a weekly or even daily basis, particularly in the beginning. This percentage gives an indicator of whether targeting is done right. If most leads are not qualified, it could imply that either the profiling of customers could be further improved, or that the targeting was not done accurately. Regardless, monitoring this metric is the easiest way to identify if the company is reaching out to the right target audience and that the budget is well-spent.
- Cost-per Customer Acquisition (CPA) – This is a commonly used metric to track the performance of budget spent. Companies typically track the cost spent per customer acquisition, by taking the total cost divided by the number of new customers acquired in a given period. To maximise ROI, B2B companies should look to lower the cost of customer acquisition while not compromising too much on the quantity of leads received.
- Conversion Rate (CVR) – This is another popular metric for companies to track the effectiveness of their sales content. Conversion rate is simply the number of leads obtained from the number of people who has viewed your content. It is a straightforward way to gauge if your content is convincing and attractive enough to lead your audience to be interested to know more. Having an engaging content does not mean it is a good content if it fails to drive an action from the audience. Content creation should be strategic, with consideration of the customer pain points and customer journey, together with an appropriate call-to-action.
Efficient and Selective Follow-up on Leads
Lastly, with an influx of leads, it is crucial to set up a good workflow to handle inquiries. Efficient follow-up is important to sustain the interests of potential customers. In addition, the follow-up of leads should be done selectively and in a prioritised manner. This would ensure that more time and effort is spent on higher quality leads with a higher probability of conversion to sales.