To buy or not to buy? How Millennials are reshaping B2B marketing

To buy or not to buy?How Millennials are reshaping B2B marketing

Carolyn Heller BairdGlobal Research Leader, IBM Institute for Business [email protected]

@cjhbaird

©2015 IBM Corporation2

Overview

Making decisions at work

Millennials and B2B purchasing

Recommendations

Wrap up

Table of contents

©2015 IBM Corporation3 ©2015 IBM Corporation3

Millennials are having a profound impact on the B2B vendors and marketers who want to connect with them

50% USA workforce

75% Global workforce

2020 2030

By 2020, Millennials will be roughly 50% of the U.S. workforce, and 75% of the global workforce by 2030.1

As more Millennials move into decision making roles at work, the influence they wield over B2B purchasing will only continue to grow.

Just as consumer marketing is changing to appeal to Millennials, B2B marketers also need to revamp their strategies to connect with this new generation of decision makers.

Note: 1 Meister, Jeanne. “Three Reasons You Need To Adopt A Millennial Mindset Regardless of Your Age.” Forbes. October 5, 2012.

http://www.forbes.com/sites/jeannemeister/%202012/10/05/millennialmindse/


But what about business-to-business (B2B) marketing?

How do Millennials’ consumer shopping habitsimpact their preferences for researching B2B products and services and engaging with vendors?

These digital natives are driving a new era for consumer marketing, one focused on…

values, transparency, relevancy and engagement


We surveyed

704 professionalswho influence or are responsible for B2B purchasing decisions of US$10,000 or more for their company

Here is what we did

1965 Generation X 1980 Millennials1954 Baby Boomers

Generational breakdown

Baby Boomers

1993

Sample size [704] is a subset of the IBV Millennial survey of 1,784 respondents

Findings in this report are based only on the responses from individuals who said they influence or are responsible for B2B purchasing decisions for their organization

All respondents are currently employed with at least a Bachelor’s degree

Global sample – respondents come from businesses large and small across 12 countries and 6 targeted industries


My input is often considered on purchases US$10,000 or more

Roughly 1/3 of our Millennial study respondents influence purchasing decisions for their business

Millennialsaged 21 – 34

Gen Xaged 35 – 49

Baby Boomersaged 50 – 60

6%

26%

68%

4%

32%

64%

6%

26%

67%

Have little or no influence on purchases US$10,000 or more

I am the final decision maker on purchases US$10,000 or more

Note: Age of respondents at time of survey – Summer 2014.


IBM Institute for Business ValueHere’s what we found… Millennials’ B2C experiences are influencing their B2B expectations

Millennials, especially, prize a hassle-free, personalized omni-channel client experience

How do Millennials, Gen X and Baby Boomers go about making decisions at work?

What are Millennials’ behaviors and preferences for engaging with B2B vendors in four key stages along their B2B purchasing journey?

Researching B2B products and services

Engaging with vendors during the sales cycle

Deciding to purchase

Sharing their client experience



Overview



Recommendations

Wrap up

Table of contents


Millennials and Gen X value others’ input……whereas Baby Boomers are likely to make decisions independently

Baby Boomers are the outliers when it comes to making decisions at work

64%

I make better decisions when a variety of people

provide input

56%

49%

61%

55%

39%

It is important to have group consensus

Source: IBV Millennial survey. Q27.2: I make better decisions when a variety of people provide input; Q27.3: It is important to have group consensus. Percentage of respondents who agreed (selected 4 or 5 on a 5-point scale). This data is based on the full survey sample of 1,784 respondents (Millennials n=1,153, Gen X n=353, Baby Boomers n=278)

Gen XMillennials Baby Boomers


When Millennials want advice…

Who Millennials consult when they need to make an important business decision

Source: IBV Millennial Survey Q28: How likely are you to consult the following people when you need to make an important business decision? Percentage of respondents who selected 4 or 5 on a 5-point scale. This data is based on the full survey sample of 1,784 respondents (Millennials n=1,153, Gen X n=353, Baby Boomers n=278)

100%

100%

100%

100%

Peers in my work group

Individuals outside my organization with relevant knowledge

My mentor (formal or informal)

Colleagues who are not in my work group

My friends or family (who do not work with me)

My boss or other leaders at work 100%52%

100%

51%

45%

51%

49%

47%

…they consult a variety of sources, placing almost the same weight on friends and family as their mentor or colleagues outside their work group


Who Baby Boomers and Gen X consult when they need to make an important business decision

100%

100%

100%

100%

100%

100%

Source: IBV Millennial Survey Q28: How likely are you to consult the following people when you need to make an important business decision? Percentage of respondents who selected 4 or 5 on a 5-point scale. This data is based on the full survey sample of 1,784 respondents (Millennials n=1,153, Gen X n=353, Baby Boomers n=278)

62%

68%

46%

51%

55%

47%

35%

31%

37%

41%

33%

41%

Baby Boomers and Gen X mostly turn to bosses, mentors and peers…

Peers in my work group

Individuals outside my organization with relevant knowledge

My mentor (formal or informal)

Colleagues who are not in my work group

My friends or family (who do not work with me)

My boss or other leaders at work


100%

100%

100%

rely on analytics to help them make better decisions

53%

Generation X

Baby Boomers

Millennials

63%

45%

Source: IBV Millennial survey. Q27.7: Analytics technologies help us make much better business-related decisions. Percentage of respondents who agreed (selected 4 or 5 on a 5-point scale). This data is based on the full survey sample of 1,784 respondents (Millennials n=1,153, Gen X n=353, Baby Boomers n=278)

Millennials and Gen X employees

Percentage of survey respondents who think analytics technologies help them make much better business decisions

Implications: Having ready access to meaningful data is essential for today’s decision makers at work, and the need for analytics capabilities will only increase as more Millennials move into leadership roles.


Overview



Recommendations

Wrap up

Table of contents


55% of Millennials regularly turn to their personal social media networks to get information about their market and industry

However, when researching B2B products or services, Millennials want to go directly to the source and interact with vendors’ representatives, even more than other generations do

Millennial consumers use the digital grapevine: 93% usually read reviews before making a purchase – and most prefer to browse onmobile devices

Millennial consumers trust their peers first: 89% believe friends’ comments more than the claims companies make about their brands

Millennial consumers depend on word of mouth: 93% have bought a product after hearing about it from a friend or relative

Research

The way Millennials shop for consumer goods is influencing their B2B purchasing expectations

When making B2B purchases…When shopping as consumers*…

*Source: Hoffmann, Melissa. “Here Is Everything You Need To Know About The Millennial Consumer.” Adweek. August 13, 2014

http://www.adweek.com/news/technology/here-everything-you-need-know-about-millennial-consumer-159139






When it comes time to pull the trigger, Millennials consult their organization’s data and look to friends and family for advice

Millennial consumers turn to friends for advice: 66% ask their friends for input, while 59% consult their “significant other”

Deciding to buy When making B2B purchases…When shopping as consumers*…

69% of Millennials say they will use social media to post positive comments – but they are far less likely to say anything negative about a B2B vendor

Millennial consumers share how they feel:59% post details of very positive or negative experiences after buying a product or service

Sharing the experience When making B2B purchases…When shopping as consumers*…

*Source: Hoffmann, Melissa. “Here Is Everything You Need To Know About The Millennial Consumer.” Adweek. August 13, 2014

The way Millennials shop for consumer goods is influencing their B2B purchasing expectations







1

1

2

2

1

4

4

4

7

8

9

When Millennials research B2B products and services…

they are more likely to want face-to-face contact – especially with the vendor

Implications

Having direct access to vendors to experience the brand is more important for Millennials than older colleagues.

It would be a miss if B2B marketers only focused on digital engagement for Millennials.

Colleagues in my organization

Articles, papers or blogs from trade or industry experts or analysts

Vendor’s customers

Vendor’s social media, mobile or website content

Third-party websites or mobile apps for reviews and comparisons

Tradeshows and conferences

Vendor’s representatives

Recommendations from mysocial network

Family or friends outside my organization

Preferred resources respondents turn to when researching B2B products or services

Millennials Gen X Baby Boomers

7

3

3

8

3

6

8

5

3

3

5

8

7

8

1

24

4

4

7

8

9 8

6

3

8

3

3

7

8

7

5

3

3

8

5

Source: IBV Millennial survey. Q34: What sources are you most likely to turn to when researching a vendor’s products and services? Select your top 3. (Millennials n=447, Gen X n=154, Baby Boomers n=103)


3 |

2 |

If you take price off the table… …Millennials want convenience,

Gen X wants great service, Baby Boomers want speed

Millennials Generation X Baby Boomers

Key attributes respondents look for when selecting a vendor

1 | Ease of doing business

Ease of doing business


Ability to deliver products/services to my satisfaction

1 | Ability to deliver products/services to my satisfaction

1 | Ability to respond quickly

Willingness to work collaboratively with my organization

2 | Reputation for superior quality of products or services

2 | Commitment to social and/orenvironmental responsibility

3 | Industry and marketplace expertise

Industry and marketplace expertise

3 | Willingness to work collaboratively with my organizationtied withUse of the latest technologies – e.g., cloud, data analytics, mobile, social

35%

33%

31% 34%

35%

44%

31%

33%

42%

Source: IBV Millennial Survey. Q35: When selecting a vendor for your organization, what attributes – in addition to price – are most important to you? Rank your top 3. (Millennials n=447, Gen X n=154, Baby Boomers n=103)


eMail

Phone calls

Face-to-face meetings

During the sales cycle, Millennials meet with vendors

Millennials’ current and preferred methods of engaging with B2B vendors during the sales cycle

Source: IBV Millennial Survey. Q36: How does your organization engage with vendors during the sales cycle currently, and how would you prefer to engage with vendors? Select your top 3. (Millennials n=447, Gen X n=154, Baby Boomers n=103)

Current methods | Preferred methods

Text messages/SMS/WhatsApp/WeChat

Live chats/Video chats

Social media (Facebook, Twitter, LinkedIn, etc.)

24%

24%

21%

19%

62%22%

69%

18%

20%

21%

69%37%

… but they would much rather engage remotely via email or phone

When in research mode, Millennials want to interact with vendors in person, but once the sales cycle starts, they want the quick, easy, convenience of a phone call, email or text message.


3 |

2 |

When it’s time to pull the trigger and buy…

Millennials Generation X Baby Boomers

Top three influences on respondents when deciding whether their enterprise should purchase an individual product costing US$10,000 or more

1 | My organization’s data analysis



Ability to deliver products/services to my satisfaction

1 | My personal experience/impression of the product or service

1 | My personal experience/impression of the product or service

Recommendations from family or friends outside my organization*

2 | Recommendations from independent analysts/or industry experts

2 | My organization’s data analysis

3 | My personal experience /impression of the product or service

Customer reviews* 3 | Recommendations from independent analysts/or industry experts

36%

36%

34% 37%

38%

42%

37%

40%

44%

Note: * Influences selected as a top three priority by only one generationSource: IBV Millennial Survey. Q37: When determining if your organization should purchase and individual product or service costing US$10,000 or more, which sources influence you the most? Select your top 3. (Millennials n=447, Gen X n=154, Baby Boomers n=103)

…Millennials look to family and friends for advice to the same degree they rely on business data


Millennials

Gen X

Baby Boomers

69%

56%

58%

Post positive comments, photos or video on social media

10%

27%

24%

Post negative comments, photos or video on social media

Post a negative rating or review on a third-party website

3%

16%

10%

10%

23%

24%

Post a complaint on the vendor’s website

34%

37%

37%

Post a positive rating or review on a third-party website

69%

56%

61%

Post a compliment onthe vendor’s website

Most respondents are more likely to post positive than negative comments about the vendors they use

…especially Millennials

Percentage of respondents who said they were likely or very likely to post a comment

Millennials

Gen X

Baby Boomers

Millennials

Gen X

Baby Boomers

Millennials

Gen X

Baby Boomers

Millennials

Gen X

Baby Boomers

Millennials

Gen X

Baby Boomers


Implications

Create relevant, personalized, authentic B2B client experiences that Millennials (and older generations) desire

Businesses need to provide their decision makers and employee influencers with …

B2B vendors/marketers need to connect with clients by offering …

─ technologies to capture/analyze relevant data ─ actionable insights derived from data─ enterprise collaboration tools…To empower decision makers with the knowledge and input they need to make the best decisions possible

─ ready access to information/data─ opportunities to connect and collaborate─ easy, fast, convenient engagement…To create branded, relevant, omni-channel clientexperiences that all clients want


Overview



Recommendations

Wrap up

Table of contents


Create client experiences that matter

Millennials’ high expectations for consumer brands is impacting their expectations for B2B engagement.

Even though Millennials are digital natives – they place a lot of value on direct, personal, authentic experiences with a brand and the vendors’ reps.

B2B marketers need a mix of digital and experiential opportunities to connect with Millennials.

How to get started

Leverage client data to get meaningful insights

Conduct a client experience assessment

Identify where pain points can be eliminated and improvements can be made

Recommendation

1



Influence the influencers

Key people influencing Millennials’ decision to buy B2B products/services often come from outside the business.

Vendors need to consider their brand reputation, even beyond their normal trade circles.

Data analytics can help vendors learn more about their clients’ ecosystems.

How to get started

Create client personas informed by data insights from your current client base

Build a 360-degree perspective of your clients’ likely influencers

Use social listening tools and analytics to see if influencers have sufficient exposure to your brand

Recommendation

2



Deliver data—anytime, anywhereRecommendation

3

Data is a key ingredient in Millennials’ decision making process.

To help Millennials—and their older colleagues—make the best choices, organizations need to arm them with analytics tools and data insights.

B2B vendors/marketers also need to offer easy access to their relevant data and information.

How to get started

Vendors/Marketers can use cloud-based development technologies to create relevant mobile experiences for clients

Develop mobile business apps that decision makers and their teams can use to access data and perform specific tasks

Ensure content is authentic to the brand, accurate, relevant to what the client needs to know, and easy to access



Make it easyRecommendation

4

For Millennial clients, it’s all about ease of doing business, on their terms.

Millennials want to interact with vendors via social media and instant messaging and expect quick responses.

They value vendors’ expertise and want to collaborate, but the process needs to be convenient. .

How to get started

Integrate Millennials into your sales and marketing teams

Have Millennials help design the guiding principles for client convenience

Introduce Millennial reps to Millennial clients



Share the love

Satisfied clients—especially Millennials—are eager to share their experience with others.

Make it ridiculously easy for clients to tell their success stories and become evangelists for your brand.

Leverage social media, content marketing or other innovative, collaborative initiatives to share client stories..

How to get started

Make capturing and sharing client references a strategic priority

Reach out to satisfied clients to let them know you want to share their story

Develop strategies that spotlight client success stories via digital, traditional and experiential channels

Recommendation

5



Overview



Recommendations

Wrap up

Table of contents


Wrap up

A new era for B2B purchasers, vendors and marketers

Businesses need to empower their decision makers and teams with social collaboration tools and easy access to meaningful data insights.

Millennials expectations for consumer experiences have impacted their expectations for B2B client experiences: relevant, personalized, authentic and seamless.

B2B vendors who provide easy processes, tools and policies designed for clients’ convenience and speed will delight decision makers of all generations, not just Millennials.


For more information…


Carolyn Heller BairdGlobal Research Leader, IBM Institute for Business [email protected]

@cjhbaird

The first paper in the study series is:

Myths, exaggerations and uncomfortable truths – The real story behind Millennials in the workplace ibm.biz/millennialmyths

This is the second paper in the IBV Millennial study – a 2-part series

Get the Executive Report :

To buy or not to buy – How Millennials are reshaping B2B marketingibm.biz/millennialsb2b

mailto:[email protected]

http://www-935.ibm.com/services/us/gbs/thoughtleadership/millennialworkplace/

http://www-935.ibm.com/services/us/gbs/thoughtleadership/millennialb2b/

To buy or not to buy? How Millennials are reshaping B2B marketing

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