Pandemic Ripple Effect
Researchers Create A Framework For Understanding The Impact Of External Crises On The B2b Sales Industry
By Sara Withrow
When COVID-19 hit, businesses closed their doors — but most of them didn’t stop selling. Instead, they developed new ways of marketing and distributing their products and services.
Nathan Hartmann, an assistant professor and senior researcher at the USF Sarasota-Manatee campus, studies the behavior and attitudes of salespeople. He said the pandemic was a shock to the business-to-business (B2B) sector that created ripples of systemic change and had a tremendous impact on the B2B sales force.
“For the salesperson, it was really a tumultuous environment,” Hartmann said.
COVID-19 effectively halted the “art” of in-person selling, forcing salespeople to learn new technology and virtual sales techniques. Because salespeople generally tend to be extroverted and less computer savvy, the new online environment was particularly challenging, Hartmann said.
According to Hartmann, it “amplified their concerns and anxiety.”
The digital environment also challenged sales organizations. They had to create online data sharing processes and policies, while protecting sensitive client information from potential hackers.
The COVID-19 situation forced companies to adjust projected outcomes, as well. Lacking the ability to personally meet customers hindered salespeople from soliciting new business.
“Organizations had to change their quotas for salespeople, in order to recognize this different environment,” Hartmann said.
Research: USF Sarasota-Manatee Campus
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A Model for Managing Through Crisis
In an effort to help the B2B industry navigate this new COVID-19 territory, Hartmann and Bruno Lussier, an associate professor at HEC Montréal Business School, developed and tested a socio technical model of sales force change. The model contextualizes Harold Leavitt’s 1965 blueprint for organizational change to the B2B industry in crisis.
“It’s a framework to help managers understand how the COVID-19 environment influences sales force organizational outcomes,” Hartmann said. Variables such as people/employees, the tasks they perform, the technology they use, and the business structure, which includes sales goals and quotas, are constants in the B2B industry. However, new stressors like financial pressures, health implications and a rapid shift to remote working, change the levels of and relationships between these variables, he explained.
“What happens in a critical period is that some of the relationships in the model strengthen, some emerge, and others are weakened or may be disrupted. There is a lot more change going on during this period because of the exogenous [externally developed] shock of the virus,” Hartmann said.
To test the model, Hartmann and Lussier conducted an extensive review of practitioner-oriented publications and interviews with managers and sales sources.
The article, “Managing the Sales Force Through the Unexpected Exogenous COVID-19 Crisis,” published in the journal for Industrial Marketing Management in July 2020, describes their findings.
The pandemic created derivative effects for the B2B industry – as implicated by the socio technical model. While the final permutations are still unknown, the impacts weren’t all bad. For example, Hartmann said, COVID-19 expedited the industry’s transition to a fully digital environment, which allows sales actions to be more measurable and trackable. Ironically, it also allowed some companies to build their sales teams.
“Even though more companies were laying off than hiring, there were wise companies that realized there were more talented salespeople in the job market. Those companies used the pandemic as an opportunity to build a stronger sales force,” he said.
Moving forward, companies may need to restructure their compensation packages, increasing base pay, to keep and attract sales talent, he added. “There are salespeople who were earning a lot of money whose salaries dropped considerably during COVID. Salespeople now tend to be more willing to give up some of their income potential for something more predictable.”
Another ripple effect for the industry is the potential blurring of “external/outside” and “internal/inside” sales teams. Historically, outside salespeople meet with buyers directly, earn higher wages and have perks, like expense accounts.
“With COVID, that distinction disappears. Everyone’s working from home; it’s no longer as relevant,” Hartmann said.
Additionally, some companies may retire the practice (and cost) of sending salespeople to trade shows and conferences to close deals with clients. “The consequences of COVID-19 have not been all negative for companies. We see long-lasting changes that will reduce the cost structure of organizations, increase the number of salespeople working inside companies and increase selling using virtual platforms,” Hartmann said.