The Power of Business Communication NAVIGATING THE CHANGING LANDSCAPE OF B2B BUYING
Commissioned by FleishmanHillard Fishburn and True Global Intelligence
Foreword
2 • Navigating the Changing Landscape of B2B Buying
2020 has been a turbulent year to say the least. Business contingency plans have been thrown out the window. We’ve adapted to a ‘new normal’ when it comes to ways of working, and the future, both for businesses and their employees, continues to be uncertain. However, this uncertainty has been the catalyst for many companies to take the next step in their digital transformation. Reliable, but outmoded, supply chains have had to be modernised through adoption of new technologies. Customer expectations and requirements have significantly altered. And the ability to plan meticulously is no longer possible with situations changing week by week. To understand the current state of the B2B landscape and what this intense period of uncertainty means for sales, FleishmanHillard Fishburn, in partnership with our True Global Intelligence team, conducted proprietary research among 500 UK business decision-makers across the following key industries: • • •
Manufacturing and logistics Financial and professional services Food and beverage
Combined with qualitative interviews with business leaders and drawing down on previous research from FleishmanHillard Fishburn, this report covers three core themes: 1. The purchasing process transformation 2. Will covid-19 have a lasting impact? 3. Influences on the purchasing decision The B2B purchasing process is bespoke to each industry segment, but there are some important defining themes that have emerged from our research. Processes are in flux, and may continue to be so for some time. There is not a standard approach to adapting a supply chain or making a B2B purchasing decision. However, it has become clear, thanks to our research, that B2B purchasing decisionmakers still rely on clear sources of communication to help inform their business choices. Whether that is traditional media, analyst reports or discussions based on social media, all of these sources are important influences on their end decision. An organisation looking to influence key B2B stakeholders must be cognisant of these sources and use them to their full advantage to generate leads and drive sales to aid recovery and resurgence in a postpandemic world.
Claudia Bate CLAUDIA BATE, HEAD OF TECHNOLOGY, DIRECTOR & PARTNER
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Key findings
4 • Navigating the Changing Landscape of B2B Buying
61%
say COVID-19 has opened new opportunities for their business that were not previously considered, causing them to actively look for new products and services
43% COVID-19 has impacted the B2B buying process
67%
66%
believe that their decision-making efficiency has changed for the better following the pandemic
note that their business has stalled in its growth trajectory
have experienced suppliers adapting quickly to meet new demands due to COVID-19
B2B buyers believe it’ll take this long to get business confidence high enough to start actively looking to engage with new suppliers
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60%
will research and consider how a potential supplier treated their employees during COVID-19
41%
reassessed budgets and made reductions
It has forced B2B buyers to make changes:
40%
furloughed contracts
37% adapted their business’s overall strategic direction
31%
reviewed supplier contracts
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The content sources B2B buyers are using to help choose suppliers in the new normal 64%
Analysts
60%
Industry-specific publications
56%
Management consultancy recommendations
57%
Industry trade bodies or associations
44%
Online national websites
40%
30% 30%
Navigating the Changing Landscape of B2B Buying • 7
Purchasing process transformation
8 • Navigating the Changing Landscape of B2B Buying
Many elements of the B2B buying process have evolved rapidly in recent months. However, despite significant environmental and financial changes, other areas of the buying process have remained consistent. he key reasons B2B buyers instigate a review of T suppliers are perennial considerations, with the annual review process topping the list, followed by an increase in expense. B2B buyers in the financial services and food and beverage industries both prioritise an annual review of products and suppliers, whereas buyers in the manufacturing and logistics industries cite the supplier becoming too expensive as their main motivation for instigating a new purchasing decision.
I think we are going to move away from transactional relationships with suppliers and towards a more in-depth relationship built on trust and better communication. I will certainly be looking for suppliers who can be more flexible and can provide all of these things.”
Key reasons to instigate a review of suppliers
2020
2019– Tech Buyers
Annual review
Cost of current supplier relative to service
Increase in expense
Performance issues
Additional competition in the marketplace
Customer service
48% 47% 37%
Finding the right providers being too difficult or time-consuming
39%
31%
Unexpected and incremental costs
Common pain points during a new purchasing decision
Managing Director at a large company in the hospitality sector
However, the process of choosing a new supplier is not always a smooth one. B2B buyers report unexpected and incremental costs as their main pain points and find them particularly hard to overcome. This is an example of an overall trend that B2B buyers have identified in the last six months: greater budget scrutiny.
46%
Budgeting and securing funding
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“In larger organisations like ours, we’re seeing the role of the procurement team change rapidly. Procurement is being involved much earlier in the buying process and in a more consultative way. I think this is a result of greater supplier scrutiny across the organisation and also because using procurement as a centralised source of information is speeding up the decision-making process.” A senior buyer at a tier-one financial institution
10 • Navigating the Changing Landscape of B2B Buying
67% Despite the rapidly changing environment the key features that B2B buyers look for in a supplier have remained constant:
of B2B buyers say that the primary attribute they look for from a supplier is value for money
61% 50%
of B2B buyers state reliability and a proven track record
of B2B buyers state customer service
This trend is also consistent with our findings from our previous 2019 research which focused exclusively on tech buyers. In that survey value for money (57%), reliability (55%) and high security (42%) were also ranked as key attributes when looking for a supplier
Perhaps unsurprisingly, financial services are the most likely to note high security as a key supplier attribute (48%), while buyers in the logistics and manufacturing industry note that response time was is important as customer service (54%)Â
The majority of B2B buyers (64%) note that their company typically considers three to five suppliers, with one third (33%) consider up to three suppliers when purchasing new products or solutions
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Will COVID-19Â have a lasting impact on B2B buying?
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“The future is hard to predict. With the uncertainty surrounding COVID-19 and its effect on the retail market in the next six months the products that I typically sell are constantly changing. For that reason, I need flexibility, innovation and reliability from my suppliers. I also value the ability to make smaller orders. As we get closer to Christmas, I will want to buy more regularly but at smaller volumes.”
COVID-19 has pushed the UK into its first recession since 2009. Despite the economy restarting to some degree, it comes as no surprise that businesses continue to feel the economic impact of COVID-19 and B2B buyers are reporting the effects on their roles.
40% The pandemic has forced B2B buyers to change tack:
41% have reassessed budgets and made reductions
31% reviewed supplier contracts
Emma Morrissey, Commercial Director at Caroline Gardner
furloughed contracts
66%
have reported a stalling in their growth trajectory
31% 37%
reduced the number of people involved in the decision-making process
are adapting their business’s overall strategic direction
Buyers in the food and beverage industry, alongside those in logistics and manufacturing, noted that they were most likely to have furloughed contracts (63% and 50% respectively). Furloughing contracts is also more prevalent in firms with a small annual turnover. Similarly, the smaller the firm’s annual turnover, the more likely they were to have had to reassess budgets and made reductions.
Navigating the Changing Landscape of B2B Buying • 13
“The COVID-19 pandemic has accelerated the move towards automation and an increased use of technology in B2B buying – from e-signatures to contract negotiations over video and sites for supplier queries.” Senior buyer at a tier-one financial institution
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It would be inaccurate to solely paint a picture of doom and gloom. The impact of COVID-19 on B2B buyers hasn’t been all negative. The research highlights several silver linings with many buyers reporting both improvements in the purchasing process and new opportunities created by the situation.
61%
of businesses state that the pandemic has provided new opportunities for their business that were not previously considered. This has resulted in them actively looking for new products and services to offer their loyal customer bases. This seeking out of new products and services is especially true for those decision-makers with larger buying powers
3in4 Opportunities created by the pandemic
of respondents believe this respite in constant trading activity has highlighted both internal (75%) and external (73%) cost savings they can make
60% 43%
note that they will research and consider how a potential supplier treated their employees during COVID-19. This is markedly lower than other recent research that shows 91% of consumers feel it is important for companies to show that they are committed to doing the right thing
of B2B buyers believe that their decision-making efficiency has changed for the better following the COVID-19 pandemic
A further piece of proprietary research from FleishmanHillard Fishburn, looking at consumer perceptions of COVID-19, indicated that 49% of consumers will stop or cut back on spending or expenses in the next 6-12 months. However, the UK business landscape is a lot more optimistic about the future. In fact, UK B2B buyers predict it will take only one to three months for business confidence to become high enough to start actively looking to engage with new suppliers.
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B2B buyers and their businesses have adapted rapidly to the new normal created by COVID-19. Likewise, most suppliers have also responded to these changing times. Often, this response has been quick and innovative.
Suppliers are adapting to the new normal
67%
of B2B buyers have experienced suppliers adapting quickly to meet the new demands due to COVID-19
64% 71% 61%
of respondents in the financial services market feel this way - the highest proportion in any sector
of respondents in the food and beverage industry agree. This discrepancy may be due to the difficulty in sourcing new, comparable food and beverages from local farms and wholesalers
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of B2B buyers are reporting they’ve experienced some improvements in service from their suppliers. With increasing pressure on the economy, this is to be expected as suppliers are keener than ever to retain their clients’ services
“As I buy from resellers, the effects of the COVID-19 pandemic have been minimal as I’ve simply switched to new resellers who stock the manufacturer’s hardware products that I need.” Operational Technology Engineer in the utilities industry
“In the past, we’ve attended a lot of trade shows in London, Harrogate, Paris and Milan. However, trade shows are going to be a thing of the past. Instead, we’re looking for wholesalers to share videos, catalogues and send sample products to us.” Emma Morrissey, Commercial Director at Caroline Gardner
Navigating the Changing Landscape of B2B Buying • 17
Influences on the purchasing decision
The economic landscape is still changing at speed as the pandemic evolves from one blink of an eye to the next. The communications landscape – and its relevance for purchasing strategies – is changing with it. Despite the obvious challenges in the last six months, B2B buyers are seizing the opportunities created by the shifting landscape. Many are using the pandemic as a chance to take stock of the information sources they use when researching and evaluating potential suppliers.
L
40%
% tter
ranked analysts as their most influential external source when making a purchasing decision
59%
58% favour industry trade bodies or associations
When B2B buyers were asked what sources they engage with on a daily basis
66%
% 30 k in edIn
However, while time spent on social media has increased among buyers, longstanding industry professionals and sources remain incredibly important
rate management consultancy recommendations
Tw i
30
This underlines the importance of using social channels to boost online credibility and presence.
“I think the amount of time buyers are spending on social media has increased, as has the influence it wields on them. As a result, the purchasing decision process has been accelerated.” Edyta Malesza-Malatrat, Marketing Director, Central & Eastern Europe, SAP
With a multitude of platforms with which to consume information, it is difficult for a communication strategy to successfully cut through the noise and influence the B2B purchasing decision. What is evident through FHF’s research is that there is no one size fits all strategy that ticks all the boxes.
61% It’s clear that B2B buyers still value the expertise of a respected journalist in their industry. They place a high level of trust (61%) in information from industry-specific publications. This is second only to their trust in independent industry analysts.
In an evolving pandemic landscape, getting your message right, on the right channels, is still vital for business success.
20 • Navigating the Changing Landscape of B2B Buying
Interestingly, while buyers spend a great deal of time on social media, they can be more cautious when it comes to using content to evaluate suppliers. Our research shows that social channels are less influential amongst B2B buyers in comparison to more ‘traditional’ sources.
“I typically make decisions based on Gartner analyst reports and through product demos and samples. I do not trust recommendations on any form of social media as it is hard to validate the credibility of the sources.” Operational Technology Engineer in the utilities industry
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Conclusion The COVID-19 pandemic has irreversibly changed the B2B world. The findings of our research show that B2B buyers are facing a new set of realities that they are ready to take advantage of. In response, suppliers need to better understand what their customers are looking for now, and rapidly pivot to support it. Faced with increased scrutiny and an often more streamlined purchasing environment, the stakes are higher than ever for organisations selling to B2B brands. They need to know more about their customer to sell more, more effectively and in a more cut-throat environment. One of the keys to achieving this is greater alignment between communications and sales. Throughout the buying decision journey, PR builds brand awareness, increases brand credibility, deepens trust amongst prospects, and ultimately drives commercial success. A strong public relations programme can have a direct link to increased sales performance and now, more than ever, B2B businesses need compelling communications campaigns that get the attention of their buyers and make the decision-making process easier for them. To find out more about how FleishmanHillard Fishburn can work with your team and partners to integrate PR into your marketing and sales programmes, please get in touch: Email: B2Bbuyers@fhflondon.co.uk
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Methodology TRUE Global Intelligence, the in-house research practice of FleishmanHillard, fielded an online survey of 503 UK B2B buyers from July 15-20, 2020. The survey was conducted at a 95% confidence level with a +/- 4.4% margin of error. There is reference to previous research also conducted by TGI, Tech Buyers Report 2019. This research was conducted through an online survey of only Tech Buyers in 2019 rather than general B2B buyers which was the audience researched this year. These two sets of research are not directly comparable and similarities can be inferred not validated.
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