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Millennials Redefine Business Tech Buying Decisions

Whether they're working solo or with a team, Millennials are holding more power over business technology buying decisions, according to IBM. How will it affect your business?

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If your business has Millennial employees, you probably don't care much about their spending habits. How they research the latest fashions, choose smartphone providers or interact with Geniuses at the Apple Store are their business and have little influence over yours … right?

Well sure, until those Millennials begin to take responsibility for the B2B purchases that directly affect how your organization operates. All of a sudden, their consumer shopping habits become a hot topic of discussion.  

B2B marketers are no longer targeting Gen X and Baby Boomer employees. They have their eyes on Millennials, a generation frequently touted as connected, tech-savvy, cost-conscious, and aware of how their decisions affect society and its environment. How do their preferences differ from those of preceding generations, and how will their attitudes affect their B2B purchasing strategies?

To explore this question, the Institute for Business Value at IBM conducted its second Millennial-focused study entitled "To buy or not to buy: How Millennials are reshaping B2B marketing." Researchers evaluated the opinions of 704 participants from a larger research group that was surveyed to determine Millennials' behavior and priorities in the workplace.

The most recent study focuses solely on the buying habits of employees who have some degree of influence over business purchases of $10,000 or more. IBM compared the responses of Millennials (1980-1993), Gen X (1965-1979) and Baby Boomers (1954-1964) to see how strategic thinking differs among generations.

[Gen Xers: More Millennial Than Millennials]

Despite the professional similarities apparent in its earlier study, new research indicates one key area with the greatest distinction among the three generations: decision-making. In browsing B2B vendors, for example, Millennials prioritize ease of doing business first and industry expertise last. Baby Boomers, in contrast, care more about a fast response from vendors than their willingness to work collaboratively.

When faced with challenging business decisions, Millennials (56%) and Gen X (64%) employees claim to make better judgments with more people. Only 39% of Baby Boomers will consider buy-in from other colleagues. Analytics is another popular help: More than half of Millennials (53%) and Gen X (63%) depend on data to enable better business decisions. Baby Boomers, in contrast, don't hold much stock in data.

(Image: geralt via Pixabay)
(Image: geralt via Pixabay)

The communication preferences among Millennials differ throughout the sales cycle. When researching a new product, they're most likely to demand direct interactions with vendor representatives. Most are used to conducting online research so they want to know that the vendor will deliver authentic and personalized interactions – not just a sales pitch.

"Digital interaction is almost table stakes," said Carolyn Baird, global research leader for IBM's Institute of Business Value, noting that this is evident from Millennials' consumer experiences. "The real differentiator is [finding] experiential opportunities to work with vendors. They want a sense of, 'What would it be like to partner with these guys? Do they have the same values?'"

Once the sales cycle kicks off, however, Millennials want all communication to be fast, easy and digital while they make their decision. Social media, instant message and live chats are also strong preferences. The attitude is "Don't call us, we'll call you."

Continuing Trends

That trend is only going to strengthen over time. IBM consulted the opinions of younger Millennials (21-25) during its Summer 2014 study and found that 41% were using social media to connect with vendors, compared with 18% of older Millennials. Predictions hold that face-to-face meetings will eventually give way to emails and phone calls.

So they want direct communication for their research and fast, virtual responses throughout the sales cycle. But what will Millennials consider most when it's time to pull the trigger on that purchase?

Data, of course … and the opinions of friends and family. That's right, people who are most likely outside the industry and know little about the vendor could exert influence over these business decisions. Millennials are often less confident in their own assessments and prefer their decisions informed by data, with a "gut check" from those who know them best, according to IBM research.  

"I think that this is part of their world, their culture, how they validate their own decisions," said Baird of the "gut check" that Millennials typically do in addition to collecting hard data. "It echoes what we've seen around their consumer shopping behaviors and the decision-making habits we've done some research around."

Businesses that want to prep Millennials to make these business decisions should arm them with the data and analytical insight they need to inform their choices. They should also foster a culture of collaboration, which Millennials will crave when it comes time to make important judgment calls. The ability to work with members of their team, employees across the organization, and vendors will be critical when it comes time to make B2B purchases.

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Kelly is an associate editor for InformationWeek. She most recently reported on financial tech for Insurance & Technology, before which she was a staff writer for InformationWeek and InformationWeek Education. When she's not catching up on the latest in tech, Kelly enjoys ... View Full Bio

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Kelly22
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Kelly22,
User Rank: Strategist
3/31/2015 | 11:27:32 AM
Re: change or verify
No problem, I was happy to hear the same! It's scary to think that someone entirely outside an industry could influence business buying decisions.
impactnow
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impactnow,
User Rank: Ninja
3/30/2015 | 10:30:17 PM
Re: change or verify
Thanks for the clarification I didn't want to think that they would actually change their mind after completing the research based on the feedback from a friend or relative. I'm glad they are still standing behind the methodology of how they achieved their decision.
Kelly22
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Kelly22,
User Rank: Strategist
3/25/2015 | 3:35:54 PM
Re: change or verify
@impactnow my apologies, I just saw your comment. From what I gathered during my chat with Carolyn, the 'gut check' is more of a confidence boost than a game-changer. Before they go to friends/family to talk about their decision, Millennials want to inform their choice with hard data. Very rarely (if ever) does an outside opinion change their minds; it seems like more of a confirmation that they made a good decision.
kstaron
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kstaron,
User Rank: Ninja
3/25/2015 | 3:31:33 PM
Re: Millennials Redefine Business Tech Buying Decisions
I found the going to friends and family part a little strange too. I would think if a Millennial wanted to checke with someone that knows them well, for a business decision it shloud be a coworker, mentor, or someone else in the business.

I continue to find how many Millennials do things differently from baby boomers interesting. Especially since emerging technology when they were kids has had such an impact.
pfretty
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pfretty,
User Rank: Ninja
3/15/2015 | 9:13:39 PM
Re: Millennials Redefine Business Tech Buying Decisions
IT leaders need to be able to balance their investments in technologies for today as well as tomorrow if they hope to make a transformative difference on the organization's ability to innovate. Peter Fretty, IDG blogger working on behalf of CSC.
impactnow
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impactnow,
User Rank: Ninja
3/13/2015 | 6:31:55 PM
change or verify
Thank you for the very interesting post. It would be very useful to know if the gut check that Millennials perform actually ever changes their decision . It was be interesting to know if the opinions of friends actually shift their research and personal experience .
Kelly22
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Kelly22,
User Rank: Strategist
3/12/2015 | 11:20:36 AM
Re: Split-gen
@Whoopty I think you're right, there's a huge difference between how older Millennials and younger ones used technology growing up. It should call for some split in the middle... Millennials A and B (well, a more creative distinction between the two).
Kelly22
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Kelly22,
User Rank: Strategist
3/12/2015 | 9:34:34 AM
Re: Millennials Redefine Business Tech Buying Decisions
@zerox203 I also don't fit into the study's criteria, but I imagine that anyone looking for a business tech solution would make a list of which vendors are offering the features they need before they pursue direct contact. Carolyn did mention that online research is a given for Millennials, so I imagine that's phase one, and when they're seriously interested then they want to talk directly with the vendors to ensure a positive working relationship.

I was surprised at the high value that Millennials put on the opinions of friends/family when it comes time for a purchase decision. That seems like an indicator of consumer buying habits making their way into the business. If Millennials didn't place equal value on hard data, I would be more concerned. But I think the 'gut check' is more of a personal reassurance than a game-changing strategy - businesses just need to make sure their employees have access to all the data they need to make the best choice. It's unlikely that an employee's friend/sibling/parent is going to make or break the choice to buy a business tech product. 
Whoopty
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Whoopty,
User Rank: Ninja
3/12/2015 | 6:40:12 AM
Split-gen
I feel like technology has changed so drastically over the past 20 years, that the generation gaps need to be shortened to make a fair comparison. If you look at the habits of people born after the millenium, they are drastically different from those born in the mid 90s and again, different from those born in the late 80s. 

Growing up with things like fast internet, versus those that began their days surfing at 25 kbps, has given people a very different look at the world. 
Broadway0474
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Broadway0474,
User Rank: Ninja
3/11/2015 | 10:51:43 PM
Re: Millennials Redefine Business Tech Buying Decisions
zerox203, I think there is something to be said about being more direct, more productive, more impactful. And these tendencies may allow millennails to thrive in certain cultures. And god willing, more and more cultures. But there is a argument to be made that the way things are and have been --- the way boomers behave and gen x'ers are forced to behave --- is an adaptation to organizational dynamics that are out of their control. 
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