Warning signs are flashing around the world that the global economy is on the brink of a severe contraction. With the Eurozone anticipated to slip into recession in the coming months and inflation rates surpassing 9%, far beyond the European Central Bank's 2% target, B2B companies are bracing for difficult times ahead.
We're already seeing deteriorating demand and rising inflation take a toll on sales across different industries. Recently, German industrial orders suffered their steepest decline in over a year due to the drop in demand from foreign countries, decreasing by 5.3%, with orders from Eurozone countries plummeting by 10.3%.
High inflation is also having a direct impact on the payment behaviour of B2B buyers. In the first half of 2022, German lenders and suppliers reported an average payment delay of 10.5 days, up from 9.97 days the previous year.
Patrik-Ludwig Hantzsch, Head of Economic Research at Creditreform, states that the decline in liquidity is primarily caused by a sharp rise in costs. This has had a particularly pronounced effect on small and medium-sized enterprises, whose average payment delay is significantly above the average at 12.1 days.
As the economy continues to struggle amidst high inflation and declining growth, B2B businesses must quickly adapt to the new circumstances and go the extra mile to retain and increase sales. This means finding ways to generate more leads, convert more prospects, and deliver added value that helps customers ease their financial burdens. Here are five strategies every B2B company can use to achieve these objectives.
Leverage a hybrid sales approach
Shifting from a traditional sales approach to a hybrid sales model has become increasingly important over the last few years as a way for B2B companies to keep up with the buyer demands for more convenient and personalised omnichannel experiences.
However, in light of the current high inflation and slowing economic growth, this shift is more critical than ever since it creates a dynamic and comprehensive sales process that’s more effective in reaching customers and maximising sales opportunities.
A hybrid sales model combines the advantages of both digital and physical sales strategies to serve customers where they prefer to buy. It enables a more flexible, scalable and customer-centric approach to sales that can help B2B companies increase customer satisfaction and loyalty and drive higher sales.
Reward loyal customers
One of the most cost-effective ways to increase sales and revenue is through nurturing existing customers with reward programs; however, B2B companies rarely take full advantage of them. With buyers often tightening their budgets and scouring for the best offers in times of economic hardship, such programs can be a particularly effective strategy to drive sales.
Rewards effectively show customers they are valued while incentivising them to stay loyal to the business. They help to boost engagement and motivate customers to make repeat purchases.
Reward programs can be structured in various ways, such as providing a tiered system based on purchase amounts, business-specific discounts, loyalty points, and rewards for customers who refer new businesses. In a tiered rewards system based on the amount of a purchase, customers can be rewarded with discounts, free shipping, exclusive access to new products, and more as they reach higher levels in the rewards system.
Customers can also receive loyalty points for every purchase. These points can be redeemed for discounts or other rewards. Reward programs can also be created for existing customers who refer new businesses to incentivise them to bring in new customers.
Beyond reward programs, simply offering discounts or bundling products together to create attractive deals tailored to each customer's business needs can help incentivise purchases and increase sales.
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Offer more payment flexibility
High inflation and economic instability can significantly affect B2B sales. When inflation rises, businesses experience decreased purchasing power, leading them to reduce their spending and resulting in fewer B2B sales. Furthermore, higher inflation causes higher costs for businesses, resulting in decreased profit margins and lower demand for products and services. As banks limit their lending terms and raise borrowing costs, many companies – particularly SMBs – also struggle to obtain credit.
Offering buy now pay later can help increase sales by providing customers with more flexible payment options that enable them to purchase items over time. This allows them to free up cashflow and ease the initial financial burden that accompanies a purchase. BNPL has been proven to increase conversion rates by 20-30%.
It also empowers buyers to make additional and more frequent purchases and buy high-value products they could otherwise not afford due to budgetary constraints. According to Mondu’s internal data, online B2B merchants experience up to a 57% increase in average order amounts after adding BNPL as a payment option.
In addition, businesses that offer more flexible payment options can enjoy a competitive advantage as most B2B companies don’t currently offer payment by invoice and installment payments, despite high (and growing) demand among buyers for these payment methods.
Harness the power of partnerships
Partnerships can be incredibly beneficial for businesses during periods of economic uncertainty because they allow for quick and cost-effective access to new customers and markets which can result in more sales. Furthermore, partnering with other businesses can help increase credibility, as customers are more likely to trust a company associated with a well-known brand.
Different types of partnerships exist with the intent to produce a mutually advantageous alliance, allowing both companies to benefit from their combined resources – be it direct sales, promotion or heightened visibility.
Joint marketing initiatives: Partnerships can allow B2B companies to reach a larger audience through joint marketing initiatives such as co-branding, cross-promotions, and advertising campaigns.
Cross-selling opportunities: Partnerships can enable B2B companies to take advantage of cross-selling opportunities to expand their customer base. By combining their products and services, companies can offer a more comprehensive solution that benefits both parties.
Referral network: Partnerships can create a referral network where each business refers customers to one another. This can be a great way to generate more leads and boost sales.
Invest in lead generation
Generating high-quality leads is always key to succeeding in B2B sales but that's even more the case during an economic downturn. As many prospects may be hesitant to purchase due to budget constraints, it's essential to be proactive and create as many leads as possible. The more leads you create, the higher the chance that some will convert.
Lead generation strategies can include a variety of tactics, such as email marketing, webinars, and content marketing. Each of these strategies can be tailored to reach the desired prospects and bring them closer to becoming paying customers.
Content marketing activities can draw in potential customers and keep them engaged. Creating engaging blog posts, videos, white papers, and case studies that demonstrate expertise and address customer pain points is a great way to get new leads and convince existing prospects to purchase.
Sending targeted emails to prospects can also help generate leads, build relationships, and nurture them until they’re ready to convert. Creating personalised emails and using segmentation to target specific customer groups with relevant messages is key to success.