Access the infographic with the survey highlights here.

This post continues the findings from our B2B Buyers Study. In our first part we explored how procurement is now in the driver’s seat: newly able and empowered to enforce compliance. This second part explores changes in the procurement mindset in greater detail.

“Purchasing decisions are no longer simple or easy to expedite without giving reasons or explanations,” was how one buyer described the changes seen since COVID hit the global economy. A different buyer emphasized much the same point: “More internal scrutiny due to pre-emptive budget cuts across the board. New finance leader has implemented new processes and a complete reapproval of budgets previously set in Dec 2019.”

And when we asked buyers to tell us about the changes they see, we saw an emphasis on risk reduction, with a large increase in wanting to understand supply resilience and the supplier’s financial position.

Based on these new requirements, we expected buyers to tell us their jobs had become uniformly more difficult. That is not what happened: while some internal parts of the job such as ‘solution exploration’ and ‘building out requirements’ appear to have become harder, buyers now find it easier to ‘identify problems they need to solve’, to ‘identify suppliers to approach’, and also ‘negotiate price.’ In short, there are fewer opportunities to spend money and procurement has more leverage. It may be that saying “no” is easy when “no” is the truth.

For sure, these changes create a barrier for sellers unwilling to innovate, but also create an opportunity for sellers willing and able to answer hard questions. Buyers also dangle a key to a better relationship and a competitive advantage when they say “help me build out requirements”. Sellers interested in capitalizing on this opportunity should focus on the following:

  1. Given increased involvement of senior people in purchase decisions, sellers need to make sure that their insight leading to solution are succinct and forthright. At this point in time, buyers are unlikely to want to spend time on clarifying requests and need to be able to present and defend the offer internally.
  2. Similarly, sellers need to understand and communicate the business implications of the purchase. A seller who doesn’t know the metric by which a purchase will be measured is unlikely to be able to close the sale.
  3. Sellers who can help their buyers navigate internal stakeholders (likely in a digital environment) will continue to have an advantage over sellers who are more passive participants in the purchase process. Active sellers will share learnings from other customers to get ahead of potential roadblocks and work to pre-emptively to demonstrate with buyers how they are innovating.

What we will share next in the data is the real wake up call for sellers. Too many are failing to demonstrate crucial skills at the level buyers expect post COVID, or right at the moment of great differentiating opportunity. As a result, pipelines are smaller, existing customer growth is lower and the job is harder than it needs to be. Let’s see if we can find a way out.

By mid-March of this year, when most of the world was sent to work from home, it was clear that B2B selling had suddenly, and radically, changed. At Challenger, we have been reporting on the changes as experienced by sellers. This edition of our pulse survey takes the buyer’s perspective, asking them what changes they have observed since the shape of the economy was transformed by COVID-19.

110 individuals from larger companies who spend an average of 60% of their time on purchasing-related activities responded to this survey (52% work at companies with 500 or more employees) conducted July 20-27. This is the second chapter of the findings; subsequent chapters will be released on Fridays.

Access the infographic with the survey highlights here.

Timur Hicyilmaz

Timur has been conducting research for most of his career. He was part of the team that researched many of the original concepts behind Challenger. Mostly focused on trying to better understand how commercial organizations succeed, Timur has spent time working on everything from trying to understand consumer attitudes toward energy consumption to identifying best practices for hospital operations leaders. His passion is for trying to identify strategies that are more likely to deliver a desired outcome than any others.