How COVID-19 Has Changed Customer Behaviors

The findings of a special COVID-19 edition of The CMO Survey were published a few days ago. The Founder and Director of The CMO Survey is Dr. Christine Moorman, the T. Austin Finch, Sr. Professor of Business Administration at Duke University's Fuqua School of Business. The survey is sponsored by the Fuqua School of Business, Deloitte, and the American Marketing Association.

The CMO Survey is conducted twice each year, and the results are usually published in February and August. The Special Edition of the survey is designed to help marketers understand how the COVID-19 pandemic has affected marketing spending, marketing performance, marketing practices, customer behaviors, and other matters.

Here are the particulars regarding the COVID-19 edition of the survey.

• The survey was in the field May 5 - May 27, 2020.
• It produced 274 responses from marketers at for-profit U.S. companies.
• 64.8% of the respondents were affiliated with B2B companies, and 97% were VP-level or above.
• 47.2% of the respondents worked at companies having fewer than 500 employees, and 22.3% were affiliated with companies having more than 10,000 employees.
• The survey included respondents working in 13 industry verticals.

The Special Edition of The CMO Survey captures the views of senior marketers regarding the overall economic and competitive environment and about major marketing trends and practices. Given the multitude of challenges now facing marketers, I encourage you to review the full survey report.

Changing Customer Behaviors

Many marketing thought leaders contend that the COVID-19 pandemic has caused major changes in the behaviors of both consumers and business buyers, and that many of these changes will last beyond the end of the pandemic. The CMO Survey asked participants about twelve specific customer behaviors, and the table below shows the percentage of respondents who said they had observed each behavior during the pandemic.

These findings provide several important insights about how COVID-19 has affected customer behaviors. Some of the findings are surprising; others not so much. For example, it shouldn't be surprising that the pandemic has led to lower in-person engagement with customers (cited by 97.0% of respondents), or that customers have shown a lower likelihood to buy (cited by 67.2% of respondents). It is somewhat surprising that only 43.3% of respondents said they had observed a significant number of customers who were unwilling to pay full price.

These findings also show that digital offerings and experiences have become very important during the pandemic. More than 80% of the survey respondents said their customers had shown an increased openness to new digital offerings introduced during the pandemic, and that customers were placing increased value on digital experiences.

The CMO Survey also asked participants when they expected some of the observed customer behaviors to return to pre-pandemic levels, and the following table shows the time frames identified by survey respondents.

As the table shows, the most popular time frame for a "return to normal" for most of the customer behaviors is 6-12 months, with substantial percentages of marketers predicting 1-2 years for some of the behaviors. However, about a third of the survey respondents believe that increased value placed on digital experiences will never return to pre-pandemic levels.

There's an ongoing debate in the marketing community about how the COVID-19 pandemic is changing customer behaviors and whether some of these changes will be permanent. The findings of The CMO Survey suggest that digital offerings and experiences will remain important long after the pandemic ends.

The CMO Survey also examined how the COVID-19 pandemic is affecting company performance, marketing spending, and certain marketing practices. I'll discuss these findings in my next post.

Top Image Source:  The CMO Survey (www.cmosurvey.org).

When Will In-Person B2B Events Come Back?

In-person events such as trade shows and industry conferences have been a mainstay of B2B marketing for many years. Various industry analysts have estimated that B2B companies typically spend from 12% to 24% of their total marketing budget hosting and/or participating in events.

Recent research has shown that most B2B marketers view in-person events as a highly effective marketing tactic. For example:

• In the 2020 Demand Generation Benchmark Study by Demand Gen Report, survey respondents ranked in-person events as the most effective engagement tactic for driving lead conversions among potential buyers in the middle stages of the buying process. Respondents also ranked in-person events as the third most effective tactic for initially bringing leads into the marketing/sales funnel.
• In the 2019 Event Marketing Benchmarks and Trends Report by Bizzabo - a provider of event management software - 85% of survey respondents said that events are essential to their marketing strategy, and 41% said that event marketing is the most effective channel for driving business outcomes.

Back in January, it appeared that 2020 would be a good year for in-person events. Bizzabo estimated that 3.2 million global professional events would be held during the year. That optimistic outlook vanished almost overnight when the coronavirus reared its ugly head. 

The cancellations began in mid-February, and they just kept coming. For example:

• On February 27th, Facebook canceled the in-person component of its F8 developers conference.
• On March 2nd, Adobe canceled the 2020 Adobe Summit live event and made it online only.
• On March 3rd, Google canceled its biggest event of the year - the Google I/O developers conference.

The most high-profile cancellation of the spring occurred on March 6th when the City of Austin, Texas canceled South by Southwest (SXSW), an event that generated over $350 million for the city in 2019.

Many event organizers and B2B marketers have responded to the rash of cancellations by migrating their events online, and as a result, the number of virtual events has exploded. Eventbrite - the provider of a self-service ticketing platform for online events - recently reported that in April, the number of business and professional events on its platform increased 1100%, compared to April of last year.

Most event organizers and marketers seem to be generally  satisfied with the performance of their virtual events, but few believe that online only events can or should replace in-person events. While the technology for delivering virtual events is powerful, it's simply not possible for virtual events to replicate the social and networking aspects of in-person events. 

The question now on the minds of many B2B marketers and event organizers is:  When will in-person events begin to return? The short answer is:  No one really knows.

On one hand, recent research by Bizzabo suggests that in-person events may resume later this year. Between April 13th and April 30th, Bizzabo surveyed 400 event marketers, 65% of whom were located in North America. Just over half of the respondents (56%) said they anticipate their organization will resume hosting in-person events in late 2020, with 32% selecting October as the starting month. The remaining 44% of respondents indicated that in-person events will not resume until sometime in 2021.

On the other hand, several large enterprises - including Microsoft and Facebook - have already announced they are cancelling all large in-person events until the middle of 2021.

My Take

My view is that few if any in-person events - particularly large events - will be held in the second half of 2020 or in the first quarter of 2020. The reason is quite simple. In-person events will not resume until event organizers believe that people will feel safe travelling to and attending those events. And it's not likely that most people will feel safe until one of two things happen.

• An effective and safe vaccine for COVID-19 becomes widely available.
• A safe and highly effective therapeutic for COVID-19 becomes widely available. What I mean here is a drug or drug cocktail that can be used prophylactically on an outpatient basis and will kill the virus (and eliminate the disease symptoms) in a short period of time, i.e. a few days.

While significant progress is being made on both these fronts, most medical experts believe that neither of these developments is likely to occur before early 2021 at best.

 The bottom line is, B2B marketers should not expect large in-person events to resume before the second quarter of next year. In addition, marketers should closely monitor the trajectory of the pandemic and the progress toward a vaccine and/or a therapeutic over the rest of this year and be prepared to adjust their plans based on how these situations evolve.

Illustration courtesy of creativelakes via Flickr CC.

The Right Pivots Can Drive Revenue Growth in 2020

The business world now has a new buzzword thanks to the coronavirus - pivot. Until recently, the term pivot was primarily used to describe a major, long-term change in a company's business model or business/marketing strategy. But over the past three months, I've seen a growing number of media articles and blog posts using pivot to describe a wide variety of changes that companies have made in response to the COVID-19 pandemic.

For example, many restaurants that previously offered only dine-in service now offer home delivery. And according to an article at the Parade website, 172 breweries and distilleries in the U.S. had converted at least some of their manufacturing facilities to the production of hand sanitizer as of June 1st.

The economic havoc caused by the COVID-19 pandemic has impacted most B2B companies. During March and April, many were forced to cease operations entirely, and many that were allowed to remain open faced sharply lower revenues.

The good news is, the U.S. economy is now coming back to life. All fifty states have begun the process of reopening their economies, and there are indications that economic activity is already increasing. While most economists are predicting the real GDP will fall significantly in the second quarter, most also believe the economy will begin to grow again in the third quarter. It's not likely, however, that the economy will return to pre-pandemic levels this year, and there's still a great deal of uncertainty about the trajectory of the pandemic and the pace of the recovery over the next 6 to 12 months.

Under these circumstances, business conditions in the second half of 2020 are likely to remain challenging. Revenues will be unpredictable for many companies, and most companies will remain focused on conserving cash. As a result, most business leaders will be even more risk averse than usual.

This does not mean that revenue growth will be off the table for the rest of 2020. The economic recovery will support growth opportunities for companies that tailor their offerings and value propositions to meet immediate customer needs. But to take advantage of these growth opportunities, you will need to "pivot" some aspects of your business.

To execute the right pivot(s) in the right way(s) at the right time(s), you will need to address several issues, but successful pivots always begin with a clear picture of customer needs.

Identify What's Important to Customers Right Now

The first and most important step in determining whether and how to pivot is to identify the most pressing immediate needs of the customers you serve. The question your business and marketing leaders should be asking is:  "What are the biggest challenges my current customers are facing right now that we can potentially solve?"

Focusing on your current customers is important for two reasons:

• First, your existing customers were - presumably at least - happy with your product or service and found your base value proposition appealing before the pandemic hit. So your pivot only  needs to address how the needs and priorities of these customers have changed because of the pandemic's economic impact.
• And second, because of your existing relationship with these customers, they will probably be more willing to talk with you openly and honestly about their immediate needs and challenges. This will enable you to design your pivot based on more reliable information.

Identify the Right Pivot(s)

Once you've identified your customers' most pressing needs and challenges, the next task is to determine what kind of pivot(s) you will need to make in order to meet those needs.

If your existing product or service offering can effectively meet your customers' most pressing needs, it may be sufficient to modify your go-to-market value propositions and marketing messaging so that they are laser focused on the customers' immediate needs.

More often, though, you will find that you need to change your product or service offering in some way to make it a better fit for your customers' immediate needs. Many of the necessary changes are likely to be driven by your customers' need to manage cash flow in the face of unpredictable demand.

The circumstances will vary from company to company, but here are a few examples of the kinds of questions you should be asking:

• Can I remove some non-essential components from my service offering so that I can profitably offer the service at a lower selling price and still provide good value to the customer?
• Can I enable customers to place "smaller" orders for my products on a more frequent basis? If so, this would allow customers to purchase my products on a more just-in-time basis.
• Can I offer customers more favorable payment terms without impairing my working capital?

The balance of 2020 won't be a cake walk for most B2B companies, but those companies that make the right pivots can still achieve above-average revenue growth.

Image courtesy of Ron Mader via Flickr CC.

How B2B Buyers Actually Consume Content

Over the past fifteen years, content marketing has become one of the most widely-used techniques in B2B marketing. Today, virtually all B2B companies are using content marketing in some form. But ironically, the popularity of content marketing has made successful content marketing more difficult to achieve. As companies produce more and more content, the total volume of content available to potential buyers increases exponentially. And so does competition for buyer attention.

In this highly competitive environment, understanding how business buyers actually consume content is critical to success. The 2020 State of B2B Content Consumption and Demand Report for Marketers by NetLine Corporation provides valuable insights on this important issue.

NetLine operates a content syndication platform, and this report is based on data about millions of content downloads that occurred on the NetLine platform in 2019. This research is particularly valuable for two reasons:

1. It captures the actual content consumption behaviors of B2B business professionals. The data used for this report was not derived from a survey or interviews, but from real engagements with B2B content.
2. The report is based on first party data. The business professionals who use the NetLine platform share information about themselves and the organizations they work for in exchange for access to the content resources provided by NetLine's clients.

The study produced a wealth of information about content consumption behaviors, and I recommend that you download and review the full report. Here are a few of the report's highlights.

The Best Times to Offer Content

NetLine found that Tuesdays and Wednesdays were the best days to reach B2B audiences in 2019. Together, these two days accounted for just over half of the days on which NetLine users requested content. It's important to note, however, that Mondays and Thursdays accounted for 40% of the most active consumption days. So in reality, Friday is the only day that you should avoid.

Most Requested Content Formats

eBooks, white papers, and guides were the three most popular content formats in 2019. Collectively, these three types of content represented about 56% of the total content requests on the NetLine platform.

On-demand webinars were the eighth most frequently requested type of content on the NetLine platform in 2019, but this lower ranking does not accurately reflect the value of webinars as a marketing tool. The time required to consume webinars is likely the primary reason they were requested less frequently than other types of content. Most eBooks and white papers can be read - or at least scanned - in a few minutes, but viewing a webinar can require as much as an hour.

Webinars have been growing in popularity for the past several years, but the COVID-19 pandemic is driving a dramatic increase in their use this year. ON24 recently indicated that the number of webinars hosted on its webinar platform jumped by more than 330% in March. Given the widespread cancellation of trade shows, conferences, and other in-person B2B marketing events, 2020 will likely be a record-breaking year for webinar consumption.

Measuring the Consumption Gap

One of the most useful insights provided by the NetLine report relates to the consumption gap. NetLine defines the consumption gap as "the time between the moment content is requested and the moment it's opened for consumption." This data point is important because it should be used to guide the timing of follow up contacts with potential buyers. After all, it makes little sense to contact someone about a content resource they've requested before they've actually reviewed the resource.

NetLine found that the consumption gap for almost every job category in an executive or leadership role increased by 8%, on average, in 2019. This means that, on average, executives and other business leaders took 5.7 hours longer to open and consume the content they requested in 2019, compared to 2018.

The report also provides the absolute consumption gaps for fourteen job categories. In 2019, the five job categories with the longest consumption gaps were:

1. Contractors - 44.2 hours
2. Owner - 40.3 hours
3. Consultant - 39.2 hours
4. C-Level - 34.7 hours
5. Senior Vice President - 27.6 hours

The average consumption gap for the remaining nine job categories was 23.7 hours in 2019.

The NetLine report also provides data about what job categories most actively requested content in 2019, and it breaks down some data by company size and industry vertical. As I indicated earlier, this research provides several valuable insights, and I recommend that you review the full report.

Image source:  NetLine Corporation

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