Ep 32: How B2B sales have changed forever, ApplePay growth stalled, Can we trust FB smart glasses?

Part 1 Video Starts 0:13 - B2B sales have changed forever with self serve playing an ever larger role

Part 2 Video- Starts 8:10 - Why is leading digital wallet Apple Pay uptake still so low?

Part 3 Video- Starts 17:16  - Are the FB Smart Glasses paving the way for a new wearable or just another untrustworthy FB effort?

Reference Articles

1. These eight charts show how COVID-19 has changed B2B sales forever
2. Only 6% of people with iPhones use Apple Pay in-store
3. Ray-Ban Stories Is Facebook's iPhone

Transcript: EP 32

Greg: okay. Welcome to episode 32 of the near memo with David, Mike and me. We're here as always to talk about the latest in local commerce, social media, and search, and as always, there's more things to talk about than we have time to talk about, but we picked out a number of things. I think that are interesting, that are going on today and will show up in the news show up in Friday's newsletter.

I was going to say something about, depending on when you're listening to this, but that doesn't matter. Okay. All right. So, um, I think David, you were, you were going to lead us off with, uh, some discussion about, uh, some insights from a McKinsey survey about B2B buying.

David: Yeah. There was a McKenzie survey.

It's actually a year old at this point. It was actually August of 2020, or maybe it was October of 2020. Um, but I don't think that the insights from it are necessarily wrong, that the, the gist is that. Most people expect the sort of during COVID buying behaviors for B2B buyers anyway, to more or less continue, um, when the pandemic is over and a couple of really interesting findings, um, uh, from, from my standpoint anyway, and, and relevant to companies that are selling to small businesses, obviously that's why this article sort of caught my attention.

Uh, the first was that ordering and reordering, uh, basically 35% of businesses, um, prefer self service. As opposed to talking to either a remote sales person or, uh, a field sales person, um, field sales, you know, is a pretty strong minority of in terms of preference, uh, something around 20% kind of across the board, um, which also kind of ties in with a lot of stuff you've written Greg about just people's, you know, lack of interest in, uh, in sort of face-to-face risk during COVID, but most people expect that the.

The habits that have formed over the last year and a half in the B2B space, uh, will sort of continue. Um, and then the one that really caught my attention as, as, uh, someone who works, you know, doing product at a B2B company, demand science, um, the pretty staggering to me, actually that up to 32 per 32% of B2B buyers were willing to spend between 50,000 and up to $500,000.

Uh, without actually talking to a salesperson, uh, end to end, uh, digital self-service and I, that was just a much higher number of a, uh, a purchase that people are willing to do without talking to someone in sales. Um, and it certainly strikes me that, you know, if you've operated on a, not necessarily a product lead or a product first, uh, model with.

Software business today, you might be missing out on 32% of your audience. I mean, a half a million dollar contract, uh, is, is not exactly a typical SMB level contract. And so, um, if you're under that amount, which I assume is basically everyone on this podcast, uh, and you don't have some kind of freemium or free trial product experience that people can take before talking to a salesperson you're, you're potentially missing out on a huge chunk of your potential customer base.

Greg: So, so I was what's the sample entirely small businesses or was it B2B buyers sort of exploring

David: it'd be buyers generally, but that's what I'm saying. I mean, if anything, excuse large, like larger businesses are also willing to make services without talking to a salesperson.

Greg: Yeah. So I think, I think that one of the takeaways for me that's interesting is sort of the, the, the fact that fewer and fewer people want to talk to salespeople sort of in general.

I mean, I think your product. Uh, point is very well taken. You know, people want to engage with the thing that they're buying and they want to see it for themselves rather than hearing a bunch of benefit statements. But, you know, it's, it's, it's, it's, it goes back in my mind to some of those earlier surveys that we saw from Carlyle, CallRail and constant contact about, I think about how, what small businesses one is, is, uh, partnerships with people that are going to help them not to be pitched, right.

They don't want to be pitched. And I think so much of sales is still stuck. You know, I mean, you'll have everybody sort of saying, oh, we do con con consultative sales and the sales person is gotta be a partner and all of that. But I think there's still a lot of sales that are very much about pinching and pushing and, and that people just don't want to have to deal with that at all.

I mean, I think that that's one of the sort of superficial takeaways perhaps from this. Is that your S you know, so much effort is expended in sales, but it's comparatively worth less and less, I think, in the whole buying cycle.

David: Right. And something like a CA account experience or customer experiences is worth much more.

And, you know, should this, theoretically, this should be this, this, these kinds of reports should be encouraging a shift of internal resources, uh, both in terms of dollar spent and sort of where people are. More onto the customer support and service side, um, as opposed to the pure sort of traditional pitching sales

Greg: side.

So Mike, you wanted to say, I think I don't want to cut you off,

Mike: but just that the corollary is also customer success, that, that CS, that this support institution needs to be able to help people find the next value in the product as well. And that may be an upsell. It may not be, but it's required. Selling of some sort in that organization as well.

So it requires a shift in how businesses are run. I mean, we're an example. With the  products we use [to record] this week where we totally onboarded by ourselves, we've been using it for 32 episodes. They upgraded to V2 and a bunch of things broke and we can't get support. It's very frustrating. And you know, if I, if they had said, oh, if you just buy this next level up, you would've got support.

I would have bought the next level, but I couldn't. I bought the next, I still didn't get support. So the point is that I think that they have to, you have to read it. How it feel customers' needs, not just from a sport point of view, but a product point of view as well. And that may include some sales on that side of the house.

Greg: Well, I mean, this is sales,this is the conventional wisdom that you have to be customer centric. You know, we, this is sort of cliche marketing language, but too many organizations don't really take it to heart. They use the rhetoric, but they don't really think about what it means. I can tell you, um, just from an Uber all experienced standpoint, so.

We've got an internal group called solutions engineering, which is a not customer success. Exactly. It's it sits somewhere between product and sales, kind of, um, I'm not on that team, so I'm probably not doing a good, good job representing it. Uh, crystal Tang is on that team and I know that every time they involve one of those people in a sales call, the success rates go way up because those they know the product and they can really provide useful information.

Whereas very often the sales rep is just reading a script or some version of a script and they don't have a lot of product knowledge, and they're not really there to help the customer. I'm not talking about Uber all. Now I'm talking about just in general, they're really there to make a quota, right. Or whatever their particular objective objective is.

And. So, you know, and, and, and it reports like the McKinsey report are interesting, but they don't change culture. That's the, that's the problem is that you can read a report, you can say, Hmm, well, that's, that's interesting. Then you go back to your organization and everything is the way that it's always been.

David: Right. But it also opens the door for startups who don't have the legacy sort of sure. Company, baggage that's or inertia that's, you know, preventing this kind of, um, this kind of mindset. So interesting report. Um, and I think. Equally valid and unfortunately equally valid in September of 2021 as it was September of 2020.

Greg: So yeah, well, or, or not, unfortunately, as the case may be, it reflects reality, you know, to people. Um, okay. So speaking of change or the lack thereof. Mike, you wanted to talk about a recent report about, see I'm getting better and better at these segues amazing segue,

Greg: your best, the, the, the, the report from, um, uh, about, uh, uh, mobile payments adoption, and sort of a surprising, uh, finding that it wasn't as high as maybe people would have expected from COVID

Mike: either reports pymnts.com and it focuses on apple pay particularly, and they note that 6% of iPhone users have opted into apple pay and use it regularly. And this compares to only two, 5% in 2015. So this, they explore this lack of growth in apple, uh, digital wallet payments. Um, which is, you know, 20% growth over six years. Isn't that very much, but they also highlight the fact that this year 2021, compared 2019 cashews declined, not a big surprise credit card use increased by 33% debit card use declined by 7%.

That's a little strange, but it could be that people didn't have as much money in the bank, but mobile wallet use in store to climb 26%. And in the context of that, apple did not decline at all. Their share of mobile wallet users went up. And the other interesting tidbit is that in 2015, that 6% spent 5 billion.

Now 6% of apple users spend 90 billion. So it's, it's real money.

Greg: They're saying $90 billion is coming through apple. Yes, that's, that's quite a lot of money that is quite a lot of money.

Mike: The question is why is it not more successful

Greg: , that's my weekly grocery bill at this point.I think

David: you must shop at whole foods.

Greg: Not Alberts. I do about half a half, 50% of the time. Not just you

Mike: have it, hopefully, but have Instacart deliver it or whoever. So it ends up being another 30% on top of it. You're living a good life. Um, but what's interesting to me is why hasn't, you know, digital wallet use become more widely adopted and apple in particular, for me, the phone has never been a useful, but when I got my watch apple fanboy than I am, although I got this one big.

I wanted to do a, uh, heart monitoring, um, the apple fan by them. This actually made me use apple pay a lot more. It didn't require me to take the phone out. So some of it is convenience and use case of the phone. It's like, just as easy to take your wallet out as it is, take your phone out. But so, but other devices like my watch, I think breakthrough that your guys.

Greg: Well,

David: um, I, yeah, I don't know. I'm not an apple watch. I'm not an apple watch guy. Uh, I certainly, I have my phone out and while I'm waiting in line at the grocery store anyway, cause I'm checking my fantasy football lineup or, you know, reading the athletic or whatever I'm doing. So it's like, I already have my phone out.

I actually have my card that my credit card actually in a pocket on the back of my phone. So it's like the tap to pay thing works just fine for me. And. I, I just, I don't think it's solving a major problem now where that changes potentially is, you know, if there's some integration with this new, uh, the new walkout to purchase, um, phenomenon that Amazon and others are sort of piloting that, that could get me to, you know, really start adopting it.

But, um, I don't know, to what extent that's going to be tied in. I obviously Amazon and apple are not exactly, you know, fraternal, uh, at this point, right. But I don't think that that is the default setup for apple pay. Just isn't that compelling for me to it. I want to use it

Greg: so well. So I'm, I'm probably, uh, I'm probably a 1% or when it comes to apple pay on my phone.

Cause I use it more than any other payment mechanism. Right. I never use cash at this point and rarely do I take out a credit card and swipe it or put it into the card reader. It's just, it's just very, I don't have an apple watch. I have an Amazon. Halo with no, it's just a pure fitness monitor. Um, but for me, it's very easy and convenient.

It's faster than a credit card. You know, if you've got a, if you've got a chip, you have to put it in. Wait, pull it out. I have the tap to tap it over for a second. Yeah. It w not all cards are, are NFC enabled, but yes, that's, you're right. That's, that's equally convenient, but. There have been numerous occasions when I have, as I've said, I think on previous podcasts where I've gone to the grocery store and my wallet is at home, you know, because I, I, you know, I, for so long I didn't leave the house.

So it's like only to go to the grocery store. Greg,

Mike: I have one question. Critical question. Did you remember your.

Greg: Sometimes I don't, that's about 50% of the time. Oh, okay. No, so, so, so things have really gone to seed around here and I have to tell you, but, but, but I've gone to the grocery store and, and, and thought shit, my wallet's back in this bowl near our, our front door.

You know, I have my keys, I have my phone, but it doesn't stop me because I go in and I just use the phone to pay no harm, no foul in the past, you know, it have been like, oh, I've got to go back and get my wallet. So I'm, I'm a big fan. Aye. Aye. Aye. You know, but I, I was really surprised that the number was just slow as it is, although the, the, the dollars.

Okay. Very large. I think one of

Mike: the point that David brought up about his car being able to do tap, to pay points out that there's this tremendous. Initially there was inconsistency on the terminal side, not enough people that had the correct terms. Now that's all fixed, but now there's an inconsistent on the card side.

Like some places don't take American express and my loan. Credit union, isn't an apple pay. So I have to pull out my traditional card there and stick the chip and it's not tapped to pay. So there's this inconsistency from rural area where I still don't have apple pay on all my cards and I don't even have anything like tap to pay to my tap to pay.

So I think some of the problem is that that there's just not a uniform way that works all the time in every situation. And just easier to keep using what works.

Greg: I think, I think one interesting point that I made before we started recording is that if I can be self actually, sorry, one of my more interesting

I forget about it. It's not my, it's an interesting observation about the world. Not interesting. Anyway, it doesn't matter. So, so. Th th th you didn't have, as you were pointing out, Mike, on the terminal side, you didn't have everybody didn't take apple pay or didn't have the capacity to take NFC payments.

They didn't have the right reader now with, with a lot of small businesses with the square reader, everybody, everybody went to that because they started, they had to take credit cards and those are also enabled to take mobile payments. The, the, the merchant problem is largely solved. I mean, I, I, there I'm in the San Francisco bay area, so it may not be typical of every year.

Metro area in the country, but that I don't encounter places where they can't take your credit card or they can't, you know, mostly can't take apple pay. Well, when

Mike: you come for your haircut on your vacation, I'll show you a few places.

Greg: Well, right, right. You're in the, you're in the areas where they're shutting down the local newspapers.

So yes, unfortunately. Yeah. Um, okay. So. My

Mike: the 35 and go on, I just want to conclude this by, you know, I think that I've always thought that digital payments tap to pay, you know, is important. And the question is, will it, will it rise from sort of relative obscurity in the future? And, and David says, no, you say yes,

Greg: sir.

I, I don't, I, it may never be a mainstream thing. I mean, I think, I think the, the technology infrastructure that supports it. You know that the tap to pay mobile payments, whatever. I think that's in place. It sort of doesn't matter in a way whether people are tapping to pay or using their watch or using their, their, uh, their phones.

I mean, the point is convenience and that merchants need to support.

Mike: Right. Yeah. Although a lot of the failure of uptake was originally due to Walmart and Walgreens fighting this trend. Right. And now I feel like the trend is being fought, not by those folks, but maybe by the MasterCard and visa folks with alternative products.

Right. So I think it's really a question of, who's going to let, who take a cut of what.

Greg: So there's, there's a really interesting alternative discussion that we won't have today about by now. And that whole phenomenon that's, that's becoming a huge thing and it's kind of starting in some cases to supplant credit card usage online and, and a logical place for that to go would be to go offline as well.

But we'll see, we'll see what, what happens with that. Um, but it's, it's, it's really a big phenomenon and pretty interesting. Uh, and, and it's a way for merchants to get away from the credit card fees. I mean, Amazon is pushing it. They've invested in a firm. The credit card fees and a lot of merchants do. Um, so there is no segue that I can come.

Maybe you'll be able to

David: pay just by looking at the terms. There we go. All

Greg: right. So someday when you have, you can tap your glasses and that will send a payment to the terminal. That's right. So Facebook today. Um, okay. Depending on when you're listening to this a few days ago, uh, announced their long awaited collaboration with Ray-Ban re the, the maker of Ray bans, uh, Luxotica.

Um, and they've come out with smart glasses to do a bunch of things, capture video. I think there's a limited AR capability. Um, you can listen to music. So it's, it's kind of an amalgam of features. You know, people are sort of saying, this is really just snap spectrum. Two dot oh, or something, or they just copied snap spectacles.

Um, one of the things that they, they, they cost, I think $299. They come in, uh, 20 different flavors. You can put prescription lenses in them. They look like normal glasses. Um, one of the significant things is that you can take video. Imagery that you capture and upload it to any of the social media platforms.

It's not limited to Facebook owned platforms, which I think is significant. Um, and they're, and they're going bending over backwards to give users reassurances about privacy. You're in control. Um, you can users,

David: but how about the people in the users feel to them? Well, right. So then I have to, I, as a pedestrian walking across somebody's past opt out of

Greg: Facebook recording, right?

Well, you, you, you, you can't effectively because you're in a public place, right. That gets into a discussion about privacy in public. And expectations of privacy, which is like fourth amendment law. But, um, it's, uh, it's a very valid point and important point, but just, just real quickly. I mean, my, my reflexive reaction to this was like, oh, this is, this is potentially dead on arrival.

This is like, you know, ha another failure that, you know, Facebook has not had success with. It's it's, um, it's a smart screen device at home because they they're in this sort of perilous position around. Um, and so my, my instinct is to say, this is, this is going to have a similar fate, you know, sort of on the heels of the previous versions of this Google glass and snap spectacles, which didn't really succeed.

But I think this is an important product because I think it's the first set of smart glasses that look normal. And I think there are a lot of nice features here. And so I think it's, it's in the evolution of this product. I think it's significant. I don't think that it will be a major success because Facebook is so untrusted and because people are creeped out by the idea of being photographed, you know, uh, wherever they may be.

So now, Dave,

David: other counterpoint that I read on Twitter today is that in order for. Device to, well, I don't know if this is the only way, but it is one way for this device to do stuff is through voice activation. Right? So somebody is going to have to say, Facebook, take a photo of the menu or something like that.

And that is just not going to be cool. Ever if you're saying, if you're saying that, you know, you're around friends or whatever, like that's going to be pretty awkward and not maybe that useful. So,

Greg: well, I don't know if there's a sort of a. Function that exists. There may be. I mean, I don't know if you remember back when Google glass was rolled out, they, they were all these parodies that came out.

Right. So you knew that the product was dead when the parodies sort of proliferated, it made it really awkward to be somebody who was wearing one of these. So if that starts happening, we know that, uh, that it's, that it's dead, but I think it's a significant. We'll wait and see how successful it is.

Mike: So this morning I was doing my regular reading and I read about a smart toilet that measures your health by measuring your fecal output and your urine output obviously takes privacy.

Yeah, invasion to a whole new level for me, falls into that same category. Although more public nonetheless, equally unnecessary, but I

David: could be wrong. And she goes so far as to say equally shitty,

Mike: only assholes need them. Right. Uh, both devices. Although I was wondering on this, on this toilet, what the digital assistant would be called, I thought of maybe boop.

Instead of theory. I think that would work. I don't know. Maybe poopy poopy flush, flush, flush again. Rap is daily affirmations, right? You did a good job today, Mike.

Greg: Well, sorry. No, I mean, I think, I think, you know, this is, Apple's got their glasses coming out. There will obviously be more iterations of this. I mean, I think there's, there's something here that has a future.

Whether or not this, this particular product succeeds. And I do think the privacy questions are really vexing difficult questions. I mean, think about all the location data that Facebook will get. I mean, this is Facebook smartphone, essentially. Right?

Mike: They will also we'll get information on how frequently you're uploading to services other than them.

Yeah. So they'll know who to buy. To create, copy

David: featured from buy and buy and Berry or last right. For our last near memo. So

Greg: you, you guys are both thumbs down on this product. You think it's not going to

Mike: but yeah, I don't know how

David: many days. Oh yeah. I'm I mean, I couldn't be rooting harder against a product in, in the market.

Um, whether it, whether or not Mike's and my opposition is enough to doom it. Uh, I, I'm not sure, but you

Greg: are, you are influencers, so you never know. W we, we, you know, we can, we can start selling makeup. I think that might be a good path profitability. Um, I, I think it won't succeed because of the trust issues, but I think as a form factor, as a piece of technology, it's interesting and will spur others to, to do similar things.

And I do think there is some role for smart glasses in the future. I just think that. The privacy stuff is really problematic.

Mike: And then social stuff is problematic. David's point of view, talking to your glasses is awkward. It's already

David: weird enough to see people talking to their AirPods, right? While they're out for a walk.

I mean, that's already been totally bizarre. It's

Greg: psychotic, or, you know,

David: in Portland, it's hard to tell sometimes actually,

Mike: One of the interesting things that apple did recently with the watch was they introduced grasping interface gestures. And I think that you would need something like that, that subtle and private that to drive this whole process because otherwise not only would it, it would, you know, it's, it's a social problem.

I mean, phones are some, some problems, but this is even a bit. Particularly if you're having to

Greg: talk to him. Well, I mean, it will be very interesting to see what apple comes with, comes up with in this, in this context, because, you know, they're, they usually do a better job though. Not always than other people.

And undoubtedly they're aware of all of these things, but they don't, they don't quite face the same, uh, headwinds, privacy headwinds that Facebook faces. But, um, You do, do you remember that? We're we're at the end, but do you remember that, um, there was a parody video, which I'll have to find, uh, called flutter.

I think it was a parody of Twitter, but they had, they featured a kind of mock pair of smart glasses. It was very funny video, very, very funny video. It anticipated this, these, these smart glasses and the social awkwardness that comes with them. Anyway. All right. So, um, once again, we come to the close of another dear memo.

We'll be back next week. Thanks for listening everybody. Thanks

David: everyone. Have a great week. Bye-bye.