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Why Millennials Throw More Money at B2B Buying

by Renay San Miguel

If you’re a baby boomer who’s been working in technology since the Jurassic era of DOS prompts, a new study from Atlanta-based PR/digital marketing firm Arketi Group confirms your suspicions: When it comes to who’s doing the B2b buying, it’s a millennial’s world, and you just live (and work) in it.

But it may surprise you that these digital natives, who are growing up fluent in social media but supposedly eschewing social interaction are finalizing those buying decisions based on old-school methods – namely, face-to-face meetings with, and testimonials from, actual human beings.

The big takeaway for Arketi Group principal Michael Neumeier? “Good news for sales people!” he laughed.

The study, titled “Not Your Father’s Buying Decision: How Three Generations of B2B Technology Buyers Decide What To Purchase,” was based on an online survey late last year. Sixty percent of the 262 respondents work for companies with 1,000 or more employees. The key highlights:

  • 34 percent of millennials said they had budget/final sign-off authority for tech purchases, compared to 27 percent of GenXers and 23 percent of baby boomers.
  • When it comes to best information sources for those purchases, industry analysts, work colleagues, vendor face-to-face meetings and case studies/testimonials were four of the top 5 answers for all three age groups. (Vendor websites placed fourth.)
  • Millennials based their decisions on industry analysts (38 percent), vendor face-to-face meetings (36 percent) and vendor websites (33 percent). Baby boomers rely more on analysts (50 percent), followed closely by internal colleagues (49 percent) and face-to-face vendor time (48 percent). For GenXrs, workplace colleagues tie with vendor websites (40 percent), followed by trade shows/conferences and analysts (both 38 percent).

Millennial buying power 05-10-16Neumeier was surprised by the numbers associated with millennial B2B tech buyers. Then again, “You need only look around town here in Atlanta. A lot of our tech startups are started by very young folks. We have a lot of millennials in positions of true buying power, so I tend to believe the data. Yes, it was surprising it was that high, but at the same time, it’s a generational thing.”

Web searches, social media, live chats and webinars can be part of the first stage of discovery of tech product purchases, the so-called “top of the funnel” when it comes to influencers who can impact that search. That would seem to be in the perceived millennial wheelhouse of tech-centric sources, but Neumeier says it may be that the youngest workplace cohort is learning from older colleagues.

“I mean, are you going to buy an ERP system based off of a tweet?” he asked. “I think once young folks in the workplace are put in a position of spending serious money, they want to really evaluate things well. What I think is interesting is the whole face-to-face component. I think that may be driven by the fact that so much of their lives as digital natives is online that they like to get face-to-face. At least, that’s what I hope to believe, that we don’t have a generation that’s growing up without that interaction.”

Final funnel influencersAnother Arketi Group principal, Rory Carlton, warned against reading too much into the results regarding vendor meetings. “The message I get here is that the role of the salesperson isn’t going away,” he said. “That has been predicted by a lot of people, and you certainly see that happening on the B2C side. But in B2B, that’s not the case. There’s definitely still a role.”

Both Carlton and Neumeier said that desire for interaction may not result in companies sending more salespeople to big trade shows. Rather, it may add to an existing trend that sees more B2B providers investing in creating their own events, usually smaller gatherings that might include live demonstrations of products.

Atlanta, with its marketing technology hub bristling with companies offering products with more analytics, automation, and the promise of lead conversion, should definitely pay attention to the findings, Neumeier said. “What this says as you look at the buyer’s journey, and you’re trying to map your content to where the buyer is in that journey – top of funnel, middle of funnel, end of funnel – there’s some additional guidance as to where you insert that sales person with the face-to-face call. Where do you insert the ‘Would you like a live demo’ call to action? That will help marketers better map to sales.”

Despite the advent of marketing tech, Neumeier says the data still shows that 70 percent of leads that go from marketing to sales are never followed up. “That doesn’t mean sales is bad, it doesn’t mean that marketing is bad, but it clearly means there’s a disconnect.”

Who do they trust 05-10-16-03

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