Millennials are changing the b2b purchasing process
The business world is undergoing a changing of the guard as the next generation climbs the corporate ladder. Millennials (a.k.a. Generation Y or Gen Y) have now become the largest demographic cohort in the West. Naturally, this poses significant economic implications on a macro scale.
Millennials will eventually comprise the majority of the workforce as well as consumers. As more of them take on decision-making roles in industry, the influence they wield over the b2b purchasing process will only grow. In turn, companies must adapt to incorporate Gen Y in their ranks and accommodate them as buyers and end-users. Millennials are bound to bring their consumer habits into the commercial setting as they transform the way businesses go about research, vendor qualification and purchasing.
Millennials, also known as Generation Y or Gen Y, are the demographic cohort following Generation X and preceding Generation Z. Academia and mainstream media generally use the term to describe individuals born between the early 1980s to the mid-1990s. While the exact years used as markers may vary from one pundit to another, there is widespread consensus on the 1981 – 1996 date range. That said, the youngest millennial today is age 23 and the oldest 38.
Interestingly, in global terms, milleninals have been the largest generation for more than 26 years. This can largely be attributed to the population boom in the developing world. In fact, almost 9 in every 10 millennials live in emerging economies. Chinese millennials alone outnumber the entire population of the US for example. Moreover, as many as 44% of millennials in the US are of non-European heritage according to a 2018 Brookings report. In advanced economies, the proportion of millennials is substantially lower due to the combined effect of low birth and death rates.
Millenials at the Workplace
Whether as members of a team, or solely responsible for selecting a vendor, millennials are having a profound impact on b2b purchasing. According to a study by Merit, 73% of 20 to 35-year-olds are involved in product or service purchasing decisions at their workplace. While one-third report that they are the standalone decision-maker for their department. We reviewed studies published by a number of prominent organisations to obtain a holistic overview of millennials’ attitudes and behaviours in the corporate environment. These insights will help b2b marketers and managers alike, in understanding and connecting with this new generation of decision-makers.
Millennials as B2B Decision Makers – IBM Institute for Business Value Research Summary
Just as consumer marketing is changing to appeal to millennials, IBM’s findings show that b2b marketers also need to revamp their strategies to connect with this new generation of decision-makers.
- Millennials (53%) and Generation X (63%) believe analytics can help them make better decisions, but Baby Boomers are more sceptical (45%).
- When researching b2b products and services, millennials prefer direct contact with vendors.
- When choosing a b2b vendor, if price is taken out of the equation, millennials seek the following attributes the most: Ease of doing business (35%), Willingness to work collaboratively (33%) and Industry & marketplace experience (31%).
- Today, millennials meet with vendors face-to-face during the sales cycle, but they would prefer email or phone correspondence earlier in the purchasing journey.
- Millennials in small organisations (1000 employees or less) are especially interested in working vendors who provide a personal touch.
- When millennials research B2B products or services, they aren’t too interested in the opinions of friends and family. However, those opinions matter a lot when Gen Y are ready to act.
- When making a B2B purchase upwards of $10,000, millennials place equal importance on their organisations’ data analysis (36%) and recommendations from family friends (36%), as well as their personal experience/impressions of the product or service (34%).
- Interestingly, millennials are far more discreet to post negative reviews online following a b2b purchase than after a b2c one. However, they’re also perfectly willing to leave positive reviews.
Millennial Values – Deloitte Research Summary
According to The 2018 Deloitte Millennial Survey, millennials find themselves disenchanted at the workplace. Many of them believed their bosses prioritise profits over employee well-being, society and the environment. As a result, Gen Y are left with a little sense of loyalty to their employers.
- 43% of millennials envisage changing jobs within 2 years, whereby 28% look to remain at their current position for 5 years or longer.
- 48% (in a survey of 10,500 respondents) believe corporations behave ethically, a decline from 65% the year prior.
- 47% believe business leaders are committed to the betterment of society, down from 62% the year before.
- A majority of millennials around the world agree with the statement that businesses’ sole ambition is to make money.
Millennials and Technology – Gartner Research Summary
Millennials are more likely to use ‘higher-end’ technologies in their private lives. Understandably, they also view IT strategies that encourage the use of personal devices at work more favourably.
- 38% of millennials believe they own the “latest and greatest” personal devices, compared to 25% of Baby Boomers.
- When asked how they would prefer to design their work schedule, millennials said they would spend the least time in the office (53%), compared to Generation X (56%), and Baby Boomers (63%).
- 53% of Millennials, not in IT departments, listed one of their first three ways to solve a digital technology issue would be to look for an answer online. That number dropped to 41% with non-Millennials.
- 42% of Millennials use real-time messaging at work, 42% use social media and 32% use storage or sharing applications.
Millennials and Careers – ManpowerGroup Research Summary
A prevalent theme in the Millennial Careers: 2020 Vision report is the millennial career mindset. Millennials are said to be long-distance runners who work hard, play hard and have their eyes on the horizon and what’s next. Ultimately, millennials are planning for the long-run and demand roles that enhance their long-term employability.
- Millennials’ top priorities when seeking employment are money (92%), security (87%), holidays/time off (86%), great people (80%), and flexible working (79%).
- 73% report to be working over 40 hours weekly and almost 1 in 4 claim to work more than 50 hours a week.
- When asked what the right amount of time is to stay in a single role before being promoted or moving to another, about two-thirds said less than two years and a quarter said less than 12 months.
- Only 3% of millennials work in the gig economy (a labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs).
Millennial Engagement – Gallup Research Summary
In their white paper titled How Millennials Want to Work and Live, Gallup dub millennials as first-generation digital natives who feel at home on the internet. Technology, namely smartphones, as well as tablets and laptops, have revolutionised the way Gen Y connect and interact with the world. 85% of millennials surf the web from their phones, while older generations browse the internet using a desktop or laptop computer.
- Millennials are the least engaged members of staff. Less than 1 in 3 (29%) are engaged, 55% are not engaged, while 16% are actively disengaged.
- Millennials change employment more frequently than previous generations. About 21% of Gen Y report switching jobs within the last year, and 60% are open to a new opportunity.
- 44% of millennials trust they are more likely to become engaged if their line manager holds regular meetings with them. Yet just 21% meet with their manager on a weekly basis.
- About half of millennial respondents claim they feel good about their current disposable income levels, less than 40% are what Gallup defines as “thriving” in any one aspect of well-being.
Millennials and Loyalty – Great Place to Work Research Summary
According to Great Place to Work CEO Michael Bush, the best workplaces for millennials are those that empower their employees with the tools they need to succeed. Such organisations set the bar for others seeking to retain and develop the next generation of leaders. Giving millennials roles with purpose and meaning drives them to give their all at their job.
- When Millennials believe their company has a high-trust culture, they’re 22 times more likely to want to work there in the long-term. In contrast, Gen Xers are 16 times more likely to want to stay, and Baby Boomers are 13 times more likely.
- 88% of younger employees say they plan to stay long-term at companies considered “Best Workplaces for Millennials.”
- Millennials who think highly of their employer are 59 times more likely to strongly endorse their company to friends and family.
- At businesses where managers show genuine interest in millennials as people, the organisation sees an 8x boost in agility, and a 7x growth in innovation.
Millennials differ from their predecessors. Those differences manifest at the office and in turn influence the way Gen Y go about the b2b purchasing process. Anyone wishing to engage, market or sell to this growing segment of b2b decision-makers and influencers must obtain a good grasp of their behaviours and attitudes.
Generation Y are digital natives, and technology plays a major part in their personal lives as well as at work. As b2b buyers, they value a hassle-free, omni-channel client experience tailored to their specific needs. They want data, speed and trusted advisers who are eager to collaborate. Millennials regard internet searches, vendor websites, co-workers and peers as the primary information streams, with younger millennials especially favouring social media.
In alignment with the instant gratification they enjoy online, millennials favour snippets of ‘to-the-point’ information over a tedious phone call with a salesman. Salespeople are viewed as secondary points of contact. Contacting a sales rep generally occurs much later down the marketing funnel, if at all. Moreover, by the time a sales rep gets involved, buyers already have a wealth of information about company reputation, product specifications and reviews of successes or failures.
Lastly, millennials are far more likely to engage with brands that share their values – be it saving the planet, supporting a charity with a genuine purpose or flying a flag for a humanitarian cause. Authenticity is the key to favourable brand perception. As millennials’ economic influence increases in the years to come, businesses that successfully accommodate the buyers of the future will be best equipped for commercial success.