Recently we hit a generational milestone – millennials have officially become the largest generational group in America’s workforce. This got us thinking. We wanted to understand how this much-hyped group was impacting B2B enterprise tech purchasing.
We looked around to see if anyone had studied this and found a few interesting reports. A 2014 thinkwithgoogle survey found nearly half of B2B researchers are millennials, up 70 percent from 2012. This was interesting!
Then we found IBM’s To buy or not to buy? research which concluded, “Millennials are having a profound impact on their organizations and the B2B vendors who want to do business with them. As more millennials move into decision making roles at work, or start their own companies where they are in charge, the influence they wield over B2B purchasing will only continue to grow.”
We concurred with IBM, which seamed liked a prudent thing, but we wanted more. We wanted to know how millennials were impacting true B2B technology purchases. You know, enterprise tech costing $10,000 or more.
We found nothing. So, we struck out and conducted our own generational survey.
Who has the “most” power during each stage of the buying cycle?
The result of our efforts is Not Your Father’s Buying Decision: How Three Generations of B2B Technology Buyers Decide What to Purchase. To further validate our findings, we reached out to senior marketers across all generations to share their observations on the B2B tech marketplace.
Our goal was to uncover the differences and similarities between the 262 business technology buyers we surveyed across the three major generational cohorts in today’s workforce—baby boomers, Gen X and millennials.
When it comes to B2B tech purchases, we found millennials take the lead in researching vendors for the short-list and final decision-making power. Baby boomers provide the most input to help decision-makers and Gen X takes a small lead on evaluating solutions on the short-list and selecting the best solution.
Our national survey found 61 percent of millennials describe their role in technology purchases within their organization as decision-maker and 34 percent report having budget and/or final sign-off authority on enterprise technology purchases of $10,000 or more. By comparison, 23 percent of baby boomers and 27 percent of Gen X report the same budget and sign-off authority.
Laurie Hood, WW portfolio marketing leader at IBM Marketing Solutions, points out “Today’s Gen X and millennial is tomorrow’s decision maker and we have to be prepared to market and sell to them on their terms. The real question is do they change, or do we change? Does a job, family, mortgage, etc. change how you are?”
When self-identifying her generation, Hood added “Technically I am a baby boomer. I was born in the last month of the last year that is usually used to define baby boomers, but not sure I really feel like one vs. Gen X.”
We agree the role and characteristic of today’s decision maker is changing. To better understand this evolution, our survey dives deeper to find out what moves B2B technology buyers through the typical buying journey—from evaluating a problem to researching technology options to creating a short list.
Who do they trust?
When evaluating tech purchases of $10,000 or greater, millennials’ most frequently used sources of information include industry analysts (38 percent), vendor face-to-face meetings (36 percent) and vendor websites (33 percent).
A greater number of baby boomers rely on industry analysts (50 percent) as well, followed by colleagues (49 percent) and vendor face-to-face meetings (48 percent).
The top of Gen X’s list includes colleagues and vendor websites (both at 40 percent), and analyst and trade shows (both at 38 percent) when it comes to information sources that most influence enterprise technology buying.
Two interesting trends stood out. First, millennials are less reliant on any one information source then the other two cohorts. Second, it appears face-to-face interactions trump Facebook and all other social media channels when millennials are making major technology business decisions.
“Businesses are quick to assume that technology is the way of the future, and they’re right,” shared Gen X marketer Malinda Wilkinson, CMO at Salesfusion. “But just because today’s key B2B buyers are multitasking with phone in hand doesn’t mean they don’t want a face-to-face chat. Building relationships is still important. Although online marketing is a must, these findings remind us not to completely take the human factor out of the B2B buying process.”
Facebook or face-to-face time?
When examining streams of information consumed at different stages of the buying cycle, the reliance on interpersonal interactions is even more pronounced. At the beginning of a typical B2B buying cycle, when seeking to understand and explore a possible business problem, all generations trust industry analysts as their top go-to source.
“You’ve got to have a toolbox full of tools and know when to use what,” explains Gen Xer Lee Kallman, senior vice president of sales and marketing at Retail Data LLC. “No doubt, technology can oftentimes create a better experience for learning about a new product or service, but nothing beats face-to-face for building and nurturing a relationship.”
Focusing on just millennials, let’s take a look at the sources used at each stage of the tech buying cycle.
During the first stage of the B2B buying cycle, millennials most often seek information from industry analysts and colleagues in their organization (29 percent each) followed by case studies and customer testimonials (24 percent).
As a buyer moves from identifying the problem to researching available technology solutions, the data shows millennials seek increasingly more interpersonal interactions. In this phase, a plurality of millennials turns to colleagues (26 percent) and vendor face-to-face meetings (25 percent) for information.
During the final phase of a B2B buying process, the creation of a shortlist from which decisions will be made, millennials rely on face-to-face vendor meetings (24 percent), colleagues (23 percent), and live or in-person demos (21 percent).
Millennials were much less reliant on social media than conventional wisdom might predict. In fact, social channels fail to break into double-digits as an information source for any stage of the B2B buying cycle.
To explain the reliance on in-person interactions, millennial Tami McQueen, director of marketing at SalesLoft, says “Interpersonal interactions highlight the affinity for authentic communication among millennials and in turn facilitate the acceleration of the buying cycle. Our generation is stewards of influence and just as we seek to gain the stamp of approval from our trusted networks – whether for a product or service – we look to impart ours on theirs too.”
While this research draws out some subtle, but important differentiations between the three groups, it really drives home that millennials, although digital natives, desire and require personal interactions when faced with an important business technology purchase decision.
What about Gen X and baby boomers?
Simon Boardman, vice president of marketing at Eagle Creek Software Services, shared “Our buyers congregate in trades shows, conferences and peer organizations. All three groups in the survey score highly on this, perhaps surprisingly in this ‘virtual’ era. This is in part a reaction to a serial betrayal of trust over the past 20 years.”
He further points out the following reasons marketers participate in their congregated events:
To better assess trustworthiness in response to this era of the “betrayal of trust”
In affirmation of the social nature of human beings in an era of digitalization
For information and experience sharing
Boardman added, “It’s interesting to digest the data in the survey regarding these types of activities across the three demographic groups and notice that the physical types of activities seem high in all three, but highest in Gen X. Does this mean that generation has felt the most betrayed and therefore finds trust hard to come by? This appears to tail off in millennials and if so, does this mean they are more trusting?”
Event and roadshows have been phenomenal in helping the sales team at Terminus close business and grow their brand according to Gen Xer Sangram Vajre, co-Founder and CMO at Terminus.
“Events are a huge part of a successful B2B marketing and sales strategy,” says Vajre. “You have to connect with your prospects and customers on their own terms. This means meeting them on their own turf, not only at industry conferences and tradeshows, but also by hosting your own events in major cities. We recognized the importance of events, which is why we launched the #FlipMyFunnel roadshow to raise awareness for account-based marketing in a vendor-agnostic way.”
Erika Jolly Brookes, CMO at Springbot shared, “Given today’s hyper-connected consumer, we have seen that appreciating the importance of omni-channel marketing strategy and technology is not generationally specific or limited. However, we do see that Millennials are very clear about ‘how’ to implement digital content, creative and technology whether its shoppable Instagram, a new product video YouTube, email including behavioral triggered emails and/or leveraging a CRM list to target ads. By and large, Gen X and older generations are comfortable with email as an outbound marketing tool, but Millennials have a digital native ability (url shorteners, uploading a list using hash format, et al) that is crucial to achieve the end result. Together, it creates a powerful combination for evaluating and purchasing technology.”
What do the differentiators mean?
While there are similarities across the generations when it comes to source preferences, it is clear marketers must keep in mind the generational differences when marketing. A persona-based marketing strategy isn’t for everyone, but developing marketing personas has been proven to better engage buyers and generate leads.
Marketers need to take into account what buyers really care about according to millennial Mousa Ackall, director of marketing at Work Market. “The emotional and psychological motivators—key components in a properly crafted marketing and selling initiative—of different generations require marketers invest time to fully understand their target persona and what matters to them,” Ackall continued.
Specifically when marketing and selling to millennials, Deborah Fisher, vice president of global marketing at NanoLumens identifies herself as “barely a boomer” and shared one of the differentiators between millennials, Gen X and baby boomers is brand loyalty. “Boomers aren’t terribly brand loyal and are value buyers. They also aren’t digital natives which gives them pause when feeling followed, and Boomers enjoy face to face purchases.”
“Our marketing [at IBM Marketing Solutions] is focused on thought leadership and solving business issues which are the same regardless of age and experience,” shared Hood. “With millennials and Gen X, you do see a greater comfort in leveraging technology for research, social media influence, and reaching out to peers in a different way. But in the end, you are still selling to everyone across all buying groups and have to have your bases covered.”
How are B2B marketers responding?
While it’s easy to use a batch and blast approach when marketing to prospects, it’s far from effective. In addition to using demographics and personas to segment prospects, savvy marketers are also developing generation-based sales and marketing campaigns. Here’s how a few marketers are targeting the growing millennial segment.
Kait Vinson, director of corporate marketing at HighJump, understands there are generational nuances. Vinson and her team are taking steps to target these audiences differently.
“Millennials are a quickly growing segment that we must cater to,” says Vinson. “We launched an initiative focused specifically on the binge-style of learning and content consumption that we dubbed ‘SupplyChainX – Raise your supply chain game’ to help millennials relate to and bring awareness to the complex world of supply chain.”
“Millenials are increasingly engaged with Izenda as prospects,” shares Lee Nagel, vice president of marketing at Izenda. “They expect more extensive trials and demos of our embedded BI and analytics software during the buying cycle, exploring firsthand the impact it will have on their user base.”
“As part of a comprehensive marketing mix, organizations should include generational considerations in their buyer’s journey modeling,” says Gabe Romero, director of marketing and demand generation at Accenture. “This allows an organization to have data that shows how and when Millennials are responding and reacting to your message or if they are engaging at all.
Romero added, “The idea of a standard marketing persona is fading. It’s now about the individual. Selling to baby boomers has traditionally been very linear. Selling to millennials is unpredictable. It’s not simply a digital interaction, but rather a shared interaction.”
“The role of millennials is driving business relocation and expansion decisions,” says Gen Xer Jennifer Zeller, manager of engineering, research and creative services for community and economic development at SelectGeorgia by Georgia Power. “We have seen major, well-known names locate in areas rich with millennials since it aligns with their goal of innovation and embracing social media in their advertising and marketing. We have also seen companies relocate to areas within the metro Atlanta area, such as Midtown, to take advantage of the millennial population as a key strategy to talent retention.”
The future of B2B Marketing
While marketers across all generations incorporate mobile and social tools in their daily routine, reliance on social media played a surprisingly small role in the B2B tech decision-making process. Instead, face-to-face interactions were the preferred method. This suggests that developing personal connections through in-person meetings is still the most effective sales and marketing strategy.
Using what we call “surround selling” techniques – like influencing third-party experts, colleagues, and the prospective buyer – is important. In fact, all generations rely on input from analysts and internal colleagues. At the same time, marketers can’t neglect their online presence. During the buying process, all respondents wanted face-to-face meetings with vendors, then they turn to vendor websites for content followed by case studies and customer testimonials.
This goes to show that B2B marketers across the three generations are similar, yet different in their approach and influence on B2B tech purchases. These differences allow marketers to select the right communications tool for each stage of the buying process. And marketers who are able to construct tight target audiences will be a step ahead.
Identifying prospects through persona and demographic research provides marketers the insights they need to build generational-specific campaigns. Marketers who aren’t ready to launch campaigns targeting generations must, at the minimum, practice generational sensitivity.
NOTE CREDIT: https://marketinginsidergroup.com/content-marketing/who-b2b-tech-buyers-trust-means-for-marketers/