How COVID-19 Affected Business: A 6 Month Retrospective

It has been more than six months since COVID-19 was declared a global pandemic. As we reported in March, the initial business impact has been painful. But now, six months later, companies seem to be adjusting to the new normal. The digital transformation is accelerating. Inbound marketing strategies work incredibly well while outbound sales strategies struggle. Buyers have more control than ever before, and companies that deliver great digital customer experiences are winning.

COVID-19 forced many businesses to operate online, and interest from online shoppers has increased tremendously since then, which has increased steadily over the past two months. This digital transformation happened before the pandemic, but COVID-19 accelerated its timeline, putting pressure on businesses and buyers to move to an online environment. Now that brands are taking advantage of on-demand tools like live chat, these features are becoming standardized as consumers expect more of them over time.

We also noticed a simultaneous decrease in the effectiveness of outbound strategies. Take sales emails as an example – the number of shipments has almost doubled since March, but open rates are still well below pre-COVID levels. It’s not that the buyer interest isn’t there. Consumers are now free to choose when and where to interact with companies. This puts more emphasis on inbound tactics as brands need to prioritize new channels like chat where consumers can interact with marketing, sales, and service at their own pace.

As more companies learned how to make this pivotal point and the global economy slowly reopened, sales results gradually improved. In June we saw a significant change in deal performance, as both the deals won and the deals made rose from just below the pre-COVID level to well above the benchmark by the end of July. Currently, global business performance is hovering at and above pre-COVID levels as more companies get used to working in these new circumstances. While it is certainly still a difficult time for businesses, the sales data suggests we are slowly making progress.

In this post, we will delve deeply into buyer interest, marketing and sales offerings, and sales results over the past six months. We’ll examine how COVID-19 has impacted different industries, regions, and company sizes, and make suggestions for investments that are worthwhile right now.

HubSpot cannot predict what will happen and no one knows what the future will be. However, we hope that this report from our customer base provides a helpful reference as companies move into the next quarter, and that the insights will be useful to you in some way. To explore the associated data set yourself, you can find our interactive microsite here.

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This data is based on benchmarks calculated using the weekly averages from the second quarter versus the weekly averages after vacation from the first quarter. As the data is aggregated from our customer base, please note that individual companies, including HubSpots, may differ based on their own markets, customer base, industry, geography, phase and / or other factors. While certain data is reported by the industry, please be aware that we do not track all industries and that HubSpot’s industry classifications may not match the standard industry classifications.

COVID-19 6-month retrospective for marketing, sales and service

1. Buyers are in control.

Chat conversations initiated by the customer

Buyer research has shifted to a more on-demand experience than ever before, and the use of live chat strongly supports this. The chat volume has increased steadily over the past six months and has been over 90% above the benchmark since September. Ever since businesses went online, consumers have gathered to chat as a resource for real-time help. Now consumers are expecting a live chat option when interacting with brands and companies are slowly starting to implement it on their websites.

With a significant number of people now working from home and communicating at their preferred time and channel, the buyer’s schedule is being researched – and they want real-time responses, even when the sales team is asleep. Marketing teams have turned to chatting to attract potential customers. Sales teams use it to nurture leads and customer service reps use it to support customers. Live chat is proving to be one of the most effective channels for communicating with customers as employees can interact with a company when necessary. The technological arc goes in the direction of convenience. Even if demand for chat doesn’t stay at this level forever, we are confident that the pandemic has turned chat into a channel for table betting in the future.

Regionally, APAC had the most chat conversations compared to LATAM, EMEA and NORTHAM. Just three weeks ago, the APAC reached 144% above the pre-COVID value and was the highest value since July above the benchmark. While live chat volume has increased significantly in each region, APAC chat conversations have increased 132% since March, EMEA 86%, LATAM 81% and NORTHAM 81%.

We’re not surprised to find APAC leading the way in live chat, as this region has been using more chat and SMS technology for quite some time. Apps like WeChat have enjoyed growing popularity in the region for years, not only because they make it easier for customers to chat with sales and service reps, but also because they give brands the ability to launch engaging campaigns. For example, India had 340 million WhatsApp users in 2019 alone, which is a significantly higher proportion of the population than any other country in the world. Countries in APAC also adopted SMS and chat early – – Japanese retailers used WeChat to advertise and offer customer discounts to attract Chinese tourists as early as 2016.

Web traffic

Two weeks ago, total web traffic was 34% above benchmark, and we’ve seen this metric increase by over 25% since March. Global web traffic seems to be holding steady at this rate as we push on past summer and fall. In fact, this metric has been over 20% above the benchmark for the past 10 weeks. As shoppers continue to shop online, companies with the most established online presence seem to see the greatest benefit.

If we look at the industry structure, computer software is the leader with the most web traffic, 51% above the benchmark. This reflects the digital transformation that already happened before COVID-19, but accelerated due to the impact of the pandemic. Compared to our level in March, almost all industries have returned to pre-COVID levels. For example, entertainment, a structurally affected industry, was 18% below the benchmark in July but has been above or just below the benchmark for the past seven weeks.

2. Inbound strategies continue to be effective for buyer reach.

Marketing Emails

Because of strong buyer interest, marketers have reinvested in email. Marketing email volume has increased a total of 49% since the beginning of the pandemic and is currently 52% above pre-COVID levels. This is a continuation of the steady increase in traffic over the past few months. At the start of the pandemic, marketing email volume had increased nearly 30% by the end of March. During the summer the transmission volume was constant at around 30% above the level before COVID and rose again in autumn.

The response rates are also developing well and have been 10 to 20% above the benchmark since April. In the spring we saw the open rates skyrocket immediately after the pandemic started, then flatten out in the summer and fall. It is encouraging to see response rates continue as email marketing has been declared “dead” many times over the past few years as channels like chat have been on the rise. In marketing, however, it’s not the channel you use, but the way you use it. Highly relevant, helpful content reaches buyers in just about any medium, and we love to see marketing teams maintaining high levels of engagement through email.

Sales emails

On the sales side, email activity has also increased, but response rates have been the opposite. Global broadcast volume has increased 79% since March, but response rates have consistently stayed nearly 30% below benchmark since April. The volume of broadcasts continues to grow in the fall as it has increased by 25% in the past five weeks.

It’s not that this approach doesn’t work, it’s just not good for the customer experience. Consumers become overwhelmed with emails as sales teams try to reach their new online audience. Since the pandemic has put even more control in the hands of the buyer, they really are only working with sales teams on their terms.

Email is still a valuable channel for sellers, but blindly emailing prospects won’t increase responses. You need to make sure that you are deliberate in your prospecting mix as these days buyers have a lot more ways to signal interest (visit a website, convert a quote, sign up for a demo, etc.). The key is to understand the intent behind these channels rather than just duplicating where it’s easy to spray and pray – like with email.

Sales pitches

While engagement to sales email has stagnated, a really positive finding for sales teams is that call events are now 21% above benchmark and up 18% since March. This is a major turnaround for calls prospecting as it fell around 25% below the benchmark from March to June but picked up again later in the summer – around the time business performance returned to pre-COVID levels.

If we look at call search by company size, it seems that smaller companies called their prospects earlier than larger ones. Companies with 1-25 employees saw their call prospecting return to pre-COVID levels in early July, while 26-200 and over 201 companies are only just beginning to return to that level. Because smaller businesses have fewer customers and fewer set and forget channels, their sales reps tend to have closer relationships with their customer base. As the pandemic dragged buyers and businesses into a period of uncertainty, these trusted relationships were able to rely on both sides to help them overcome difficulties. It makes sense that when business performance began to stabilize in July, smaller companies would be the first to return to phones because they rely so heavily on these close relationships as well as traditional search channels like phones.

Call events are currently 31% above the benchmark for companies with 0-25 employees and have increased by 26% since March. We can compare that to other company sizes like 26-200 employees, which is 18% above the benchmark and up 17% since March. Over 201 companies are currently just 2% above the benchmark, but that number has increased nearly 30% in the past four months. We will look for 201 companies to improve their call prospects as sales results continue to improve.

3. The sales results gradually improve.

Offers won

In the past few months, companies have adapted very quickly to new circumstances. Sales results have fluctuated greatly due to changing buyer circumstances, economic uncertainties, etc., all of which were due to the biological spread of COVID. After 6 months, companies are simply more used to operating in these circumstances, and while it is certainly a difficult time, the data suggests that companies of all sizes are starting to move forward.

In April we hit the lowest point for total deals won at 36% below the benchmark. We then recovered steadily from the end of April to mid-June, when the deals we had won returned to the level before the start of the pandemic. Deal performance continued to improve through July and August, and at the end of September deals won were 10% above the benchmark. This is an increase of more than 45% since the first week of April.

The pandemic has changed the definition of a “good fit” customer. Due to cash flow issues, some customers have been unable to purchase products they could afford in the past. The changing circumstances affected the urgency customers had when shopping in both directions, speeding up some deals while stalling others. Companies had to reassess their target people because the buyer’s circumstances had changed so dramatically. To be successful, brands need to update their definition of a “good fit” customer as well as their sales movements.

Offers created

April not only had the lowest number of deals won, but also the lowest number of deals. In the week of April 6th, deals fell 30% below the benchmark and stayed below pre-COVID levels through mid-June. Over the summer, the business process has continuously improved and is now 35% above the benchmark. That’s 65% more deals that are being created now than in early April. As companies turned their strategies and learned to operate in a digital world, many found success and gradually benefited from their new search channels.

Regionally, LATAM appears to be hardest hit by business operations in the first three months of the pandemic. It hit its lowest point in April at 43% below the benchmark but luckily rebounded in the summer and is now 16% above the benchmark. EMEA also recently returned to pre-COVID benchmarks as it lagged all other regions through July and August. It was 18% below the benchmark, while all other regions were at least 10% above. In September, EMEA deal flow outperformed the benchmark for the first time since March and is now 20% above pre-COVID levels.

Construction, manufacturing and computer software have been above the benchmark since the beginning of September. The construction industry is the most powerful industry and has been around 20% above the pre-COVID level since May. However, this is expected because these industries are not as structurally affected as others. Industries like travel, entertainment, and human resources are still working their way back to pre-COVID levels. While not exactly on the benchmark, business for these industries has been significantly better than when the pandemic started.

Takeaways

Conversion online isn’t new and it’s not going anywhere.

Companies didn’t suddenly discover e-commerce and live chat when COVID-19 forced them to adjust their operations. Brands and consumers were already moving online before the pandemic, but COVID accelerated their schedule and put pressure on them to swiftly face digital transformation. What used to be new products and services – like live chat – is now of decisive importance for daily operations. Without these tools, businesses cannot attract customers or prospect as they did before the pandemic.

Now that many businesses have gone online and discover the benefits that come with it, there is no going back to what was before. Businesses will continue to invest in digital channels as these are proving to be extremely effective options for engagement, prospecting, and support. Consumers are also becoming more familiar with these channels. If they continue to interact with brands across a digital landscape, they will expect this environment to be the standard for companies to evolve.

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Incoming and buyer interests are not optional.

With companies operating in a digital world, buyer interest has evolved into an on-demand experience. More and more consumers are working from home and spending more time online, which means they can interact with brands when and where they want. Buyers now have a variety of channels to choose from when they want to contact your brand, and they also have the luxury of switching between these channels at their convenience. So, if you want to successfully engage your digital audience, your brand needs to be available on all of the platforms your customers use. This will also help you maintain a noticeable digital presence as more companies follow suit and go online.

You also need to focus more on your inbound methodology as consumers now have more options to interact with brands at their preferred pace. If you prioritize quantity over quality in messaging – as we’ve seen with sales emails – you won’t get very far in engaging your audience and in the process can detract from the customer experience. Instead, try to send quality content to your prospects. You may need to reevaluate what “good fit” means as COVID has had a significant impact on the buyer profile. However, this should put you on the right track to attract buyers who are an ideal fit with your sales team.

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Companies have to adapt.

Compared to our booth in March, the global sales results look much better. For many companies – especially in structurally affected industries – we are nowhere near as far as we were before the pandemic. Companies have had to adapt their approach to operate in very different circumstances, and some have done so successfully while others are still working to develop an effective plan. The good news is that most companies seem to understand that if they want to continue operating in a post-COVID world, they will have to adjust their strategies in some way.

Aids:

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