Pandemic converts B2B buyers to eCommerce, new capabilities and new expectations.
By Michael Harney, Lia Ketola, Kedar Naik, Nicolas Probst and Steve Reis.
McKinsey has been researching B2B buyers and sellers around the world intensively over the past six years. What we’ve learned is that average buyers now use ten or more channels as they journey through the buying process, choosing digital self-serve for certain activities and video or in-person for others. Assumptions that once seemed unassailable—such as e-commerce being limited to small-ticket items—have also been roundly busted. Globally, 62 percent of B2B decision makers are now willing to spend $50,000 or more in online purchases—and one in five would spend more than $500,000.
To deliver excellence in today’s environment, B2B sales organizations will need to make three seismic shifts in the way they approach clients and lead teams: become omnichannel orchestrators, adopt a value-creation mindset, and enable continuous change management.
These shifts will require sales organizations to re-skill significantly. Of the more than 400 sales leaders in Europe and the Americas polled in our most recent survey, 55 percent said that only about half of their sales force has the required capabilities.
Change is never easy, especially after two years of pandemic-related upheaval. But our research and client work indicate that companies staffed with top talent achieve significantly higher revenue growth. Here’s what’s required to deliver that outperformance.
1. Become an omnichannel orchestrator
As buying habits evolve, sales excellence has increasingly come down to delivering the right experiences over the right channels. But with different stakeholders involved at different purchasing stages, sales leaders will need granular data and AI analytics capabilities to discern what information and which interactions are most helpful to reach specific audiences.
Our research shows that B2Bs with the fastest rates of revenue growth are far more likely to equip reps with deal-level insights and account-specific customer intelligence. By comparing search data with sales data, for example, one B2B sales leader isolated which customers were using chat and which preferred email, so they knew the best channel on which to engage. Other analytics tracked competitor movements in specific regions, so reps could anticipate customer questions and prepare helpful responses.
Data-driven insights can also help leaders align and allocate coverage and resources more effectively. Instead of reviewing account coverage once a year, as is typical, outperforming organizations update account priorities and realign resources as frequently as once a month with the help of resource modeling and planning tools. These skills require investment in analytical and quantitative abilities, account planning, negotiation, and relationship building—but that investment pays off in four to five times higher growth.
2. Adopt a value-creation mindset
B2Bs with the fastest rates of revenue growth are approaching customers sooner and with a more consultative mindset. They’re partnering with customers more in designing tailored value propositions, eschewing the more typical B2B sales transaction- and product-led focus. The new approach can be transformative.
One B2B packaging company approached a top manufacturing customer with a proposal to create a fully integrated packaging offering. Instead of simply selling the customer corrugated boxes, plastic wrap, and labels as usual, sales leaders hashed out a customized solution with the company, creating prototypes tailored to its top product line. Running the numbers showed the approach would cost the company less than purchasing component packaging elements separately. The B2B would gain as well, since the solution would embed the company’s packaging into the customer’s operations, creating an annuity revenue stream and the potential for additional cross-selling down the line.
In our survey, approximately 85 percent of sales leaders said they believe that solution selling will be a core sales capability, requiring strong product knowledge and solution design as well as account planning skills.
To excel, sales leaders will also need to sharpen their communication skills and facilitate ideation with customers, pulling in technical experts when needed, running pilots, and establishing mutually-agreed-upon targets and goals. Pipeline development, upstream engineering processes, and the sales cycle itself will all need to adapt to this joint planning structure.
The value mindset underlying the solution sales construct should also extend to pricing. Sales leaders can play an important role in raising the account aspiration. For example, they might wish to establish performance-based pricing and align the fee scale to mutually-agreed-upon outcomes. This approach can involve more upfront risk, but it can result in a win-win for both parties and build greater customer lifetime value.
3. Enable continuous change management
Next-gen sales leaders address all core elements of change management. They move with speed through agile workflow. They tell compelling, “what’s in it for me” stories, and they refresh their training, development, and incentive programs regularly.
In our survey, roughly 65 percent of sales leaders said they believe that the speed of change has increased over the past few years, and 85 percent believe that adopting agile working methods will be critical for success in the coming years. One sales leader at a B2B manufacturer noted, “It was during the depths of the pandemic when we realized things needed to be different. We started trying new things in small groups to see what worked and what didn’t. This agile mindset helped us so much.”
Instead of taking on big, complex projects and implementing them over many months, for example, top-performing teams lean on practices that support rapid test and learn and break projects into smaller sprints of one to two weeks, with an emphasis on getting a minimum viable product out to customers quickly. They place similar emphasis on adapting the culture of the sales organization, role modeling desired behaviours, and helping sellers understand what they can gain by embracing new ways of working. As one sales VP explained, “The ‘aha’ moment for our team was when we asked reps for their thoughts on the transformation and it became clear they didn’t really understand why we were making it. So we spent time making the change story very clear, empowering the frontline, tying incentives to the new behaviours, and reinforcing these behaviours through our performance-management systems.” None of this can be left to chance. Sales organizations need to carve out time for peer coaching and weekly check-ins and make mentorship a requirement for all leaders.
Training needs to change as well. Instead of broad-brush approaches, organizations generally find more success making the learning individualized and experiential—enabling sellers to focus on specific capability gaps and apply what they’re learning to active sales opportunities. Our research shows that most organizations need to re-skill roughly half their sales force and plug key gaps in core commercial roles.
To ensure changes stick, leaders also need to revisit their performance-management and incentive structures, adjusting metrics and rewards to maintain momentum and sustain gains.
By learning from this convulsive period of change, sales leaders can do more than simply adapt their teams to the demands of today’s B2B environment; they can lead in delivering a new level of performance. Organizations that lean into acquiring the capabilities required to deliver excellence in next-generation sales will be able to forge mutually beneficial, long-term customer relationships and deliver significantly greater ROI.
Michael Harney is a partner in McKinsey’s New York office, Lia Ketola is a senior expert in the Luxembourg office, Kedar Naik is a partner in the Brussels office, Nicolas Probst is an associate partner in the Berlin office, and Steve Reis is a senior partner in the Atlanta office. The authors would like to thank Bastiaan Dillmann, Boudewijn Driedonks, Liz Harrison, Ryan Paulowsky, Kate Piwonski, Candace Lun Plotkin, and Jennifer Stanley for their contributions to this article.
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