When it comes to making B2B purchase decisions, Millennials and Gen Xers are more likely than Baby Boomers to believe in the importance of consulting their colleagues and earning team consensus, according to a recently-released study [pdf] from IBM. While the two younger generations are also more likely to see the benefits of data and analytics in decision-making, they differ in their approach to vendor research and also seek out different attributes from vendors.
Interestingly, Millennials surveyed for the report put vendor representatives at the top of the list of sources they are most likely to turn to when researching a vendor’s products and services. By comparison, vendor representatives fell further down the list of the 9 identified research sources among Gen X (#7) and Baby Boomer (#5) respondents.
In another somewhat unexpected result, Gen Xers cited third-party websites or mobile applications for reviews and comparisons as a joint top resource, while this was 7th on the list for Millennials.
Other top research sources for Millennials – tradeshows and conferences, and colleagues in their organization – were also near the top of the list for Gen Xers and Baby Boomers. In general, Millennials’ research preferences appeared more closely aligned with those of Baby Boomer respondents than those of Gen Xers.
It’s also worth noting that Millennial B2B buyers’ top three research avenues were all in-person sources. IBM attributes this to online research being “routine” for Millennials, with “authentic, personalized interactions” being of more importance when understanding a vendor.
Indeed, for the time being, face-to-face meetings are the most common way for Millennials to engage with vendors during the sales cycle, cited by 69% as a current method, far ahead of email (37%), phone calls (22%) and social media (21%).
However, Millennials would clearly prefer to engage with vendors remotely, via email (69%) or by phone (62%), with fewer citing face-to-face meetings (24%) as a preferred option.
Meanwhile, generational differences also emerge in the attributes buyers seek when selecting a vendor. Looking beyond competitive pricing, Millennials’ top priorities are:
- Ease of doing business (35%);
- Willingness to work collaboratively with their organization (35%); and
- Industry and marketplace expertise (31%).
By contrast, Gen Xers place the most value in vendors’ ability to deliver products and services to their satisfaction, also citing a vendor’s reputation for superior quality as a top priority.
For Boomers, a vendor’s ability to respond quickly is the top attribute. Surprisingly, other priorities commonly associated with Millennials are among the top attributes Boomers’ look for from their vendors: a commitment to social and/or environmental responsibility; and use of the latest technologies.
The generational differences persist when examining buyers’ top purchase decision influencers. For Millennials, data analysis and recommendations from friends and family outside their organization are tied atop the list of sources that influence them the most when determining if they should purchase an individual product or service costing at least $10,000. The reliance on family and friends is unexpected given that this was the method least used by Millennials when researching vendors.
Neither of those above influences appeared among the top 3 for Gen Xers or Boomers, for whom personal experiences and impressions of the product or service were most important (#3 for Millennials). Gen Xers, for their part, were the only generation to place customer reviews among their top-3 purchase decision influencers.
As for reviews, respondents from each generation claimed to be far more likely to post compliments and positive comments than complaints or negative comments or reviews.
As part of their recommendations, IBM suggests that vendors “consider their brand reputation,” particularly as it seems that Millennials lean on opinions from friends and family outside of the organization when making purchase decisions.
Understanding Millennials’ preferences is particularly important given that recent study results place them as the largest cohort of B2B researchers. In fact, they now comprise 46% of B2B researchers, according to a recent study from Google and Millward Brown Digital, up from 27% in 2012. Those results are based on a survey of 3,000 B2B researchers conducted last year, which, unlike the IBM study, highlighted the roles of search, mobile, and video in the research process.
While the Google survey found that the demographics of B2B researchers are skewing towards younger generations, a MarketingCharts study [download page] released last year revealed that B2B buyers and decision-makers are mostly comprised of adults in the 45-64 age range, although 25-34-year-olds have become more heavily represented over the past 5 years. Although the median age of a B2B buyer was found to be slightly younger than the overall median age of adults surveyed, the median age of decision-makers (those who authorize purchases) was slightly older.
About the Data: The IBM data is based on a survey of 704 individuals who influence or are responsible for B2B purchasing decisions of US$10,000 or more for their company. They came from organizations large and small, across 12 countries and 6 targeted industries. Millennial employees are defined as those born 1980–1993, while Gen Xers are born 1965–1979 and Baby Boomers are born 1954–1964.