Millennials as B2B Buyers
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1 WHITE PAPER Millennials as B2B Buyers Understanding motivation, attitudes and digital direction for capturing their attention Frank Mulhern, Ph.D. Northwestern University September 2014
2 We have 95 million millennials who are about to take over the American economy, declares media consultant Hollande Cooke in a recent Associated Press article. i While experts may not always agree about the total size or exact birth years included, there is no doubt that millennials rank as the largest generation ever. As they penetrate the ranks of the established generations, they re taking center stage in both the workforce and the marketplace. Already the majority population at many companies, they stand poised to become the dominant age group in the global workforce within the next 10 years all the while becoming the most important customer generation that has ever existed. The reality for the rest of us is to come to grips with who they are, and figure out how we can best work with and market to them. It all begins by getting to know them better. While not intended as an all-encompassing profile of millennials, this paper highlights some of the foundational attitudes, beliefs and values that define this unique generation as detailed in the March 2014 research study, Understanding Millennials: What Businesses Must Know about America s Most Unique Generation by Dr. Frank Mulhern, of the FORUM at Northwestern University. Who Are the Millennials? Most experts agree that Millennials were born between 1980 and the early 2000s. Often referred to as Generation Y or Echo Boomers, the fact that their births coincide with the turn of the century and its anticipated societal changes is probably why the millennial reference has taken root. They impact the world around them not the least of which is how they will drastically change the composition of the workforce. By 2020, the U.S. workforce will flip from 50 percent baby boomers and 25 percent millennials to 25 percent baby boomers and 50 percent millennials. By 2020, the U.S. workforce will flip from 50 percent baby boomers and 25 percent millennials to 25 percent baby boomers and 50 percent millennials. FORUM BMA 2
3 Experts say millennials display the highest levels of narcissism and self-esteem of any generation and often describe them as self-important and polarizing. They were raised by helicopter parents who micromanaged their childhoods and, more often than not, still continue their involvement in the adult lives of millennials. That extra parental involvement may relate to the fact that, unlike previous generations, only 61 percent actually grew up in traditional two parent households. Millennials shun many societal traditions, remaining relatively unattached to organized politics, religion and societal practices. A February 2014 Pew Research study ii reveals that 50 percent of those surveyed label themselves independents while 29 percent say they are not affiliated with any organized religion. The study also points out that, while 36 percent of Generation X, 48 percent of Baby Boomers and 65 percent of the silent generation were already married when they were between the ages of 18 and 33, only 26 percent of the millennials in the same age group are married. This last fact dovetails with the continued involvement of parents in their lives, explaining at least part of the reason that many millennials still live at home. Given their inherent ethnic and racial diversity, it is not surprising that this newest adult generation demonstrates more tolerance and concern with social issues. By a ratio of 2 to 1, they outpace previous generations in racial and lifestyle diversity tolerance. They more readily accept nontraditional family arrangements such as interracial and gay marriage. Millennials like to do well and receive recognition. Their expertise lies in performing well for doting parents and schools that assured them of their special status and that they could do anything or be anyone. As members of the workforce, they continue to thrive on recognition and frequent, close interaction with supervisors. How Are Millennials Different? Perhaps the most significant characteristic of the millennial generation is their role as the first generation raised on technology. They grew up immersed in the digital era and feel comfortable working with the intricacies of the Internet, mobile technology and social media. Outpacing all older generations in social networking and cell phone use, they consider technology as an extension of their bodies. They keep smart phones, ipads and laptops close by and multitasking is second nature to these digital natives. Their adoption and use of technological tools blurs the lines between business and personal matters for them. Millennials live a constantly plugged in existence: 55 percent say they could not keep up with life without technology and more than 50 percent interact with a friend s social posts at least once each day. 55 % of millennials say they could not keep up with life without technology Although they want to succeed rapidly in their careers, millennials view work only as one activity in life. They do not separate work from everything and everyone else. Instead, they consider jobs as lifestyle options and want to make them fulfilling, much like any other personal activity. In this context, millennials value and expect more integrated work-life balance and flexible work arrangements in order to accommodate their other lifestyle interests. More than 50 % of millennials interact with a friend s social posts at least once each day Accustomed to the short, casual and instant communications made possible with today s technology, millennials expect to be kept in the loop at work regardless of their rank or need to know based on their specific job. They fully count on frequent, positive and affirming communications with their supervisors, unlike previous generations who relied on chainof-command information and annual performance reviews. Tying into their work and lifestyle attitude and their desire FORUM BMA 3
4 for frequent informal communications, millennials like to collaborate and prefer working in teams. They view work as a more pleasurable experience when shared with others. They do not believe in hierarchical relationships and rigid social rules. They socialize in the office and work virtually from home, melding the distinctions between their personal and work lives. As a result, millennials not only seek flexible hours, but they also prefer a more home-like office environment that facilitates the more informal dress and interaction that characterizes their behavior. What Moves Millennials? For millennials, trust is important and personal. The Pew research cited earlier concluded that millennials have emerged into adulthood with low levels of social trust when its survey revealed that just 19 percent of millennials say most people can be trusted. A 2013 Social Chorus study iii confirms that 92 percent of millennials report trust is a factor in who influences them online. At the same time, a Crowdtap/Ipsos study iv found that millennials trust comments created by their peers (user-generated content) 50 percent more than other media. Millennials do not trust traditional media, advertising or brands. They quickly relay good and bad experiences with their friends. And, as many as seven in 10 believe it is important to share feedback about brands online. The impact of this new reality means that marketers must find tactics to connect with millennials in a softer way than traditional advertising. Some of the most effective marketing for this generation can occur in those situations where brands encourage and make it easy for millennials to share their own stories. Despite the lack of trust for established societal forces, the millennial generation is surprisingly upbeat about the future. Fully 74 percent of those expect the best possible life in spite of the fact that they have come of age during uncertain economic times, have higher levels of unemployment or underemployment and heavy loads of student loan debt. Looking at it from a broad perspective, millennials want to know that they matter. Money does not motivate them like previous generations since they believe that their work should be just as engaging as the rest of their lives. They thrive on fairness and performance-based promotions, desiring frequent recognition in order to know that their work has an impact. They want managers and supervisors who support them and genuinely have their best interests at heart. Millennials believe that business should help resolve social issues and that businesses should not measure success strictly in financial terms. Given the chance, 50 percent of the millennials prefer working for businesses with sound ethical practices. Based on their interest in social causes, millennials support charitable causes, actively volunteering earlier and more often than their predecessors. What Needs To Change? Clearly, millennials stand poised to dominate the workforce and marketplace in the very near future. Since they behave differently from the Boomers and Gen Xers who currently dominate the same workforce and marketplace, both environments need to evolve to accommodate the diversity of all the generations as the composition changes. Business leaders need to understand the characteristics of the Millennial Generation: broad optimism, social tolerance and involvement, value of work-life balance, team orientation, desire for inclusion, inherent trust issues and embodiment of technological communications. Leaders and marketers ought to demonstrate that they value and care about millennials and want to foster relationships with them. All entities that want to successfully market to this newest adult generation should fully comprehend that millennials: Use Google and other search engines to do their own research before purchasing Can be attracted through social media, blogs, electronic newsletters, etc. Often rely on video content for learning Trust testimonials from their peers and peer groups Want customized solutions that fit their lifestyles FORUM BMA 4
5 Unlike previous generations, marketers must market with millennials, not at them. Because of their relentless electronic research, millennials have different expectations from those of previous generations when it comes to making purchases and engaging in retail commerce. Whether B2B employees or B2B customers, millennials know about, and expect, the best value from what is available. In this context, successful marketers will want to focus on creating messages and products that resonate with millennials. They also should find ways to let millennials share their personal stories about products with their peers. Unlike previous generations, marketers must market with millennials, not at them. AS A PRICE WATERHOUSE COOPERS CEO SURVEY V CONCLUDED: CEOs recognize that they will have to encourage innovation that s both radical and methodical; connect with employees and consumers who don t look, think or act like them; experiment with new operating models while preserving existing efficiencies; and deliver value without compromising on quality or integrity. In short, CEOs will have to become hybrid leaders who are comfortable with straddling two worlds drawing on the best of the old while operating at the frontiers of the new. Yes, millennials are different from any previous generation and companies need to find new ways to build trust in order to earn their respect, loyalty and business. The FORUM based this white paper on the March 2014 research study, Millennials in the Workplace, conducted by Dr. Frank Mulhern, of the FORUM at Northwestern University. You can find the full study in the Knowledge Center under The FORUM at Copyright 2014 ABOUT THE FORUM The FORUM at Northwestern University is the strategic original research division of the Business Marketing Association. The FORUM promotes a people-centered leadership approach by: providing relevant, provocative, and actionable academic research; creating a platform for leaders to dialog, network and benchmark practices; delivering ideas for practical action and experimentation; and, building and supporting a community of champions for people-centered leadership. ABOUT THE BUSINESS MARKETING ASSOCIATION For more than 90 years, the Business Marketing Association (BMA) has dedicated itself exclusively to the discipline of business-to-business marketing. We enrich the lives of B2B marketer by providing a forum to connect them to learn about new trends and network with peers to exchange ideas. As the largest organization in the world dedicated to B2B marketing, our 18 chapters and 2,500 members represent corporate professionals, agencies, small businesses and suppliers committed to advancing the practice of B2B marketing. To learn more, visit FORUM FOUNDING TRUSTEES Aimia Patty Saari VP, Client Services Incentive Marketing Association Julie Weldon Executive Director Maritz, Inc. Paula Godar CPIM, CRP Director of Brand Strategy Marketing Innovators International Rick Blabolil CPIM President Promotional Products Association Intl. Paul Bellantone President & CEO TRUSTEES Hallmark Business Connections Keith Fenhaus CEO O.C. Tanner Michelle M. Smith CPIM, CRP VP, Business Development i Beaumont, T. (12 May 2014). Rep. Rogers wants to move radio needle to moderate. Associated Press. Retrieved May 12, 2014, from yahoo.com/rep-rogers-wants-move-radio-needle-moderate html ii Pew Research Center s Social & Demographic Trends. (7 March 2014). Millennials in Adulthood. Retrieved May 10, 2014, from pewsocialtrends.org/2014/03/07/millennials-in-adulthood/ iii Social Chorus. (2013). Millennials as Brand Advocates. Retrieved May 10, 2014, from as-brand-advocates-ebook-socialchorus.pdf iv Knoblauch, M. (2014, April 9). Millennials Trust User-Generated Content 50% More Than Other Media. Mashable. Retrieved May 12, 2014, from mashable.com/2014/04/09/millennials-user-generated-media/ v Price Waterhouse Coopers. (2014, January). Retrieved May 12, 2014, from global-ceo-survey-jan-2014.pdf FORUM BMA 5
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