McKinsey Survey: Asian B2B decision maker response to COVID-19 crisis

McKinsey & Company 1
22 22
33 30
46 47
42 48
33 31
25 22
Identifying and
researching
new suppliers
Considering
and evaluating
new suppliers
Ordering Reordering
Most B2B supplier interactions are remote or
digital self-service
Current way of interacting with suppliers’ sales reps during different
stages1,2
% of respondents
1. Q: How do you currently interact with sales reps from your company’s suppliers during the following stages of interactions?
2. Figures may not sum to 100% because of rounding.
In-person
interactions
Remote human
interactions
Digital
self-service
interactions
Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 1,208)
of the time, B2B decision
makers have in-person
interactions with company
suppliers
~20–30%

24 22
34 33
44 48
43 47
32 29
23 20
Identifying and
researching
new suppliers
ReorderingConsidering
and evaluating
new suppliers
Ordering
This current remote and self-service sales model
is exactly what is preferred by B2B buyers
Preferred way of interacting with suppliers’ sales reps during different
stages1,2
% of respondents
1. Q: How would you prefer to interact with sales reps from your company’s suppliers during the following stages of interactions?
In-person
interactions
Remote human
interactions
Digital
self-service
interactions
of B2B decision makers prefer
remote human interactions or
digital self-service instead of
in-person interactions, citing
ease of scheduling, safety, and
savings on travel expenses as
their top three reasons why
~70–80%

18
35
24
17
7
August 11
Three in four B2B decision makers believe the new (mostly remote)
sales model is as effective or more so now than prior to COVID-19
17
29
24
25
April 28
5Much less effective
Somewhat less effective
As effective as before
Somewhat more effective
Much more effective
Effectiveness of new sales model in reaching and serving customers1,2
% of respondents
1. Q: How effective is your company’s new sales model at reaching and serving customers?
Source: McKinsey COVID-19 B2B Decision-Maker Pulse #2 4/20–4/28/2020, (n = 1,256), McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 1,208)
70%
as effective or
more so
compared to prior
to COVID-19
77%
as effective or
more so
compared to prior
to COVID-19

B2B decision makers believe the new model is even more effective
for prospecting than it is for existing customers
Effectiveness of new sales model at reaching and serving customers and acquiring new
customers1,2,3
% of respondents
18
38
23
16
5
August 11
Much more effective
Much less effective
79%
as effective or
more so
compared to prior
to COVID-19
2. Q: How effective is the new sales model in acquiring new customers (eg, those that have never purchased from your organization before)?
Current customers New customers
August 11
18
35
24
17
7
77%
as effective or
more so
compared to prior
to COVID-19

Belief in the effectiveness of the new (mostly remote) sales model
has increased in all countries since April
Effectiveness of new sales model in reaching and serving customers1,2
% of respondents
18 12
38
35 46
31
21
45
24
23
35
15
30
17 15
26 15 16
114
4
7
ChinaAPAC Japan
6
India
6
3
S. Korea
Much less effective
Much more effective
% of respondents choosing “as effective” or more so compared to prior to COVID-19X%
Percentage-point change
in respondents choosing
“as effective” or more so
compared to April
7% 11% 2% 4% 8%
77%
Source: McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020, (China n = 408), (Japan n = 200), (India n = 400), (S. Korea n = 200)
81%
70% 74% 78%

B2B decision makers believe the new (mostly remote) sales model is as
effective for prospecting or more so now than prior to COVID-19
Effectiveness of new sales model in acquiring new customers1,2
% of respondents
Much more effective
Much less effective
1. Q: How effective is the new sales model in acquiring new customers (eg, those that have never purchased from your organization before)?
18 13
35
8
38 44
31
30
46
23 25
35
15
27
16 15
25
14 15
Japan
5
4
APAC S. KoreaChina
2 77
India
6
79%
70%
82% 81%80%
% of respondents choosing “as effective” or more so compared to prior to COVID-19X%

33
28
13
21
1
$500,000 to < $1 million
under $50,000
$50,000 to < $500,000
$1 million or more
I would not make a purchase via
end-to-end digital self-service
Remote and self-service is not just for low-value
purchases; a majority spend $50K or more
Maximum order value you would purchase through end-to-end digital self-service
and remote human interactions for a new product or service category1,2
% of respondents
1. Q: What is the maximum order value that you would purchase through end-to-end digital self-service and remote human interactions for a new product or service category?
2. Numbers do not add to 100% because “I don’t know” option was offered yet not included for analysis.
would spend more than
$50,000 on a completely
self-serve or remote
interaction
95%
of B2B buyers might
make a purchase in a
fully end-to-end, digital
self-serve model
~60%

Before COVID-19 During COVID-19
The majority of B2B companies have shifted their go-to-market
model from traditional to digital, with heavy reliance on video
1. Q: In what ways was your company’s product or service sold before COVID-19?
2. Q: Now today, in what ways is your company’s product or service sold during COVID-19?
Go-to-market sales model during COVID-191,2
% of respondents
55
50
19
45
41
51
55
30
50
20
58
42
59
58
Traditional
Digital interaction
with sales rep
Digital self-
serve
In-person
Via videoconference (eg, sales reps interacting
with customers via Zoom, Teams, Skype, etc.)
Phone
Email
Online chat (eg, chatting with customers via web
chat, email, etc.)
eCommerce (eg, products/services sold directly
online with no sales rep involved)
Fax
X% % change
% change
-46%
-1%
2%
30%
4%
15%
4%

1. Q: Approximately what percentage of your company’s revenue before COVID-19 was driven by…/during COVID-19 is now driven by…
2. Figures may not sum to 100% because responses under “other” option was offered yet not included in analysis, and because of rounding.
Before COVID-19 During COVID-19
E-commerce, videoconference, and online chat now drive the bulk
of revenue
4%
14%
48%
18%
17%
9%
X% % change
Source of revenue before and during COVID-191,2
% of revenue % change
24
13
4
13
10
15
20
11
13
4
19
12
18
22
Traditional
Digital interaction
with sales rep
Digital
self-serve
In-person
Via videoconference (eg, sales reps interacting
with customers via Zoom, Teams, Skype, etc.)
Phone
Email
Online chat (eg, chatting with customers via web
chat, email, etc.)
E-commerce (eg, products/services sold directly
online with no sales rep involved)
Fax
-53%

Video is almost always ‘more helpful’ than audio
alone
79
77
74
77
12
13
16
15
9
9
10
8
1. Q: How much more or less helpful is it to use video (eg, Zoom, WebEx, Teams) vs phone only in the following situations?
2. Q: What percentage of your customer meetings now take place via videoconference (eg, Zoom, Teams, Skype, etc.) where participants can see one other via video?
3. Q: If you are unable to physically meet in-person, for which of these commercial activities do you prefer video in addition to audio?
Helpfulness of video (eg, Zoom, WebEx, Teams) vs
phone only in different situations1
% of respondents
Meeting with others
in your company
Meeting with
existing customers
Meeting with
prospects
Meeting with
vendors/suppliers
More helpful to use video Neutral Less helpful to use video
of B2B customer
meetings now take place
via videoconference (eg,
Zoom, Teams, Skype,
etc.) where participants
can see one other via
video2
47%
B2B buyers also
believe video is
preferred for:3
Demonstration of
products/services
Pricing negotiations
Customer support/
trouble shooting
Day-to-day account
management

Screensharing and seeing one other are the most helpful features of
videoconferencing
1. Q: What features/functionality of videoconferencing are most helpful for you?
74
65
46
45
38
Most helpful features/functionality of videoconferencing1
% of respondents ranking in top 3
Screensharing
Annotation
Breakout rooms
Whiteboards
Seeing one other

15
17
31
23
13
One in three B2B companies have already reduced both their
in-person sales FTEs and number of physical locations
18
16
32
21
1236%
companies reduced their
number of people (FTEs)
in in-person sales teams
by more than 4% due to
COVID-19
33%
companies reduced their
number of physical locations
using in-person sales by more
than 4% due to COVID-19
Number of people (FTEs) in in-person sales
Number of physical locations3 using in-person
sales
1. Q: How has your organization changed your in-person sales team structure?
2. Figures may not sum to 100% because of rounding; “not applicable” option was offered, yet not included for analysis.
3. Dealerships, stores, branches, etc.
Reduced +11%
Reduced 4–10%
About the same
(within ±3%)
Increased 4–10%
Increased +11%
Changes to in-person sales team structure (changes already made)1,2
% of respondents

In most countries, one in three B2B companies has already reduced
their in-person sales FTEs
2. Figures may not sum to 100% because of rounding; “not applicable” option was offered, yet not included for analysis.
Reduced +11%
Reduced 4–10%
About the same
(within ±3%)
Increased 4–10%
Increased +11%
Changes in number of people (FTEs) in in-person sales (changes already made)1,2
% of respondents
x% percentage of respondents who indicated reduction of more than 4% due to COVID-19
15
31
13
17
22
11
17
13
31 37
49
15
35
23 28 20
18 27
13 8
13 19 12
APAC
5
China S. KoreaJapan
6
India
36% 33%36% 39%37%

In most countries, one in three B2B companies has already reduced
their number of physical locations
2. Figures may not sum to 100% because of rounding; “not applicable” option was offered yet not included for analysis.
3. Dealerships, stores, branches, etc.
Changes in number of physical locations3 using in-person sales (changes already made)1,2
% of respondents
33% 28%30%
42%
x% percentage of respondents who indicated reduction of more than 4% due to COVID-19
18 12 7
30
15
16 24
7
17
9
32 34
55
20
33
21
21
16 18
30
12 9
12 16 12
APAC China Japan India S. Korea
Reduced +11%
Reduced 4–10%
About the same
(within ±3%)
Increased 4–10%
Increased +11%
34%

5-10-20-30
5
0-15-25
15
-5 10
30
25
15 20
-25
-20
-15
-10
-5
0
10
20
Global finance, banking, and insurance
Technology, media, and telecom
Advanced industries
Global energy and materials
Pharma and medical products
Consumer/retail
Travel, transportation, and logistics
Advanced industries are seeing the sharpest reduction in FTEs for
in-person sales and physical locations
Number of
physical
locations
using
in-person
sales
Net addition1 of people (FTEs) in in-person sales and number of physical locations (changes already made)2
% of respondents
1. Net addition: % of respondents reporting reduction subtracted from % of respondents reporting increase.

-25-30 -10
10
-20 -15 -5 0 5 10 15
5
20
-20
15
0
-25
-15
-10
-5
20
25
China
Japan
India
S. Korea
Japan and South Korea are seeing reductions in both FTEs for
in-person sales and physical locations
Number of
physical
locations
using
in-person
sales
Net addition1 of people (FTEs) in in-person sales and number of physical locations (changes already made)2
% of respondents
1. Net addition: % of respondents reporting reduction subtracted from % of respondents reporting increase.

McKinsey & Company 17McKinsey & Company 17
Contents
The next normal of sales is here to stay—what it will take to succeed

The next normal is here to stay—companies
expect the new sales model to persist
1. Q: Which of the following statements best describe the changes your company has made to its commercial and go-to-market model during COVID-19?
Figures may not sum to 100% because of rounding.
Staying power of new sales models1
% of respondents
89%
are “very likely” and “somewhat
likely” to sustain these shifts
12+ months after COVID-19,
up from 83% in
April 2020
35
48
12
4
47
42
7
4
August 11April 28
Very likely to sustain 12+ months after
Somewhat likely to sustain 12 months after
Unlikely to sustain 12 months after
Made no GTM changes
Source: McKinsey COVID-19 B2B Decision-Maker Pulse #2 4/20–4/28/2020 (n = 1,256), McKinsey COVID-19 B2B Decision-Maker Pulse #3 7/27–8/11/2020 (n = 1,208)

10
23
32
22
13
In-person meetings might not return at scale until 2021;
even then, more than half are expected to remain virtual
10
42
39
10
33%
of B2B companies
expect to have
in-person meetings
again in 2021
52%
of B2B companies
expect to have less
than 50% in-person
interactions even
when their sales
force is capable of
having in-person
meetings again
Quarter when sales force is expected to have in-person
meetings again1
% of respondents
In-person vs remote interactions (when your sales
force is capable of having in-person meetings)2
% of respondents
1. Q: When do you expect your sales force to have in-person meetings again? Figures may not sum to 100% because of rounding.
2. Q: When your sales force is capable of having in-person meetings, what percent of interactions do you think will be in-person vs remote? Figures may not sum to 100% because of rounding.
76–100% in-person
51–75% in-person
26–50% in-person
1–25% in-person
Aug–Sep 2020
Oct–Dec 2020
Jan–Mar 2021
Apr 2021 or later
Already having
in-person meetings

10
24
8
16
23
9
15 41 24
32
36
21
33
33
22
36 12
17
13
13 17
29
16
APAC
3
India
2
China Japan S. Korea
In-person meetings might not return at full scale until 2021
33%
Quarter when sales force is expected to have in-person meetings again1,2
% of respondents
1. Q: When do you expect your sales force to have in-person meetings again?
2. Figures may not sum up exactly due to rounding.
Aug–Sep 2020
Oct–Dec 2020
Jan–Mar 2021
Apr 2021 or later
Already having
in-person meetings
% of respondents who expect sales force to have in-person meetings again no earlier than in 2021x%
12%
39%
49%
40%

Even once in-person interactions become feasible again, more
than half of all interactions are expected to remain virtual
1. Q: When your sales force is capable of having in-person meetings, what percent of interactions do you think will be in-person vs remote?
2. Figures may not sum up exactly due to rounding.
10 8
18
10
42 49
37
38
40
39
39
32 39 44
10 14 13 11
S. KoreaChinaAPAC
6
Japan
5
India
52%
Percent of interactions (in-person vs remote) when your sales force is capable of having in-person meetings1,2
% of respondents
76–100% in-person
51–75% in-person
26–50% in-person
1–25% in-person
% of respondents who expect their salesforce to have no more than 50% in-person interactions once feasible againx%
57% 55% 48% 46%

Most companies believe that their sales teams need both
skill building and technology for effective remote selling
1. Q: How much do you agree or disagree with the following statements?
2. Q: Thinking about your company’s future in the context of COVID-19, how much do you agree or disagree with the following statements?
92% 90% 91%
Tech beyond
videoconference
Additional skills
for in-person to
remote transition
Basic video
technology
“Strongly agree,” “agree,” and “somewhat agree”
83% 88%
New profiles
of sales reps
Redesigned
sales trainings
of B2B companies
believe that they
have both
capabilities and
technology to sell
today, however…
88%
90%
Have both capabilities
and technology to
effectively sell today
Need both skill building
and technology
~90% companies
believe that they
need to further
develop both
capabilities and
technology
90%
B2Bs believe that their sales teams need to adjust to
following terms1
% of respondents
Skills and technologies needed2
% of respondents

Roughly two in three B2B companies are looking to potentially reduce
their number of sales reps as they refine their overall sales model
36
70
Expect to reduce
going forward
Have already reduced
2X
1. Thinking about your company’s future in the context of COVID-19, how much do you agree or disagree with the following statements?
2. How has your organization changed your in-person sales team structure?
3. For example, ability to shift sales rep territories or quotas mid-year to target higher-value opportunities.
70%
84%
90%
91%
Will be decreasing the number
of sales reps
Will be redefining sales roles to
focus on different sales methods
Need to switch to a different,
more dynamic resourcing model
Will introduce a more agile sales
planning process3
B2B companies believe that they need to adjust
to the following terms as new normal1
% of respondents
…and as an implication, future reductions
in the number of sales reps are expected1,2
% of respondents
“Strongly agree,” “agree,” and “somewhat agree”

McKinsey Survey: Asian B2B decision maker response to COVID-19 crisis

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