SMB customer insights: millennial buying behaviors
Each generation brings unique attitudes and approaches to their business, and millennials are no different. As we compiled our recent study on small and medium sized businesses (SMBs), we discovered some key insights into the buying preferences and behaviors of those between the ages of 25 and 40. Workers in this generation are coming into their own as important players in the SMB ecosystem and are bringing with them fresh perspectives on how to engage with technology.
We know that many of you have long histories supporting SMB customers, and as you continue to grow alongside them, we believe these findings on millennial attitudes and behaviors will be a valuable resource. By understanding this generation’s philosophies and attitudes toward technology, you can strengthen existing connections and evolve your engagement strategies accordingly. In this blog, we will help you explore the impact that millennial leaders have on our potential customers.
Millennial executives bring tech-positive attitudes
Millennials have been increasing in number in the workplace over the last decade, and many have now risen to executive leadership positions in their respective organizations. They now comprise 41% of executives in SMBs, a percentage that rises even higher to 48% in the United States. In these roles as business decision-makers, they promote a new attitude toward digital transformation that holds significant implications for Microsoft partners. Millennial executives place a higher value on technology than their older peers, with 68% agreeing that technology is very important or essential to their business.
As we discovered in our previous blog on “early adopters,” millennials are overrepresented among forward-looking companies. Early adopter SMBs are more likely to be led by millennials than technology laggards, a trend that is particularly pronounced in middle-income markets. Among regions like China, India, Mexico, and South Africa, we found that millennial executives are 1.5 times more common among early adopter SMBs — numbers that are slightly more muted in high-income markets. This widespread tech-positive ethos likely results from how this group views technology in their personal life: 29% of millennial executives identify as technophiles vs. 20% among the older cohorts.
Partnering for Environmental, Social and Corporate Governance (ESG) progress
In engaging with millennial SMB leaders, part of partners’ opportunity is illuminating the connection between your solutions and their ESG goals. Executives of this generation are the most likely to want to increase employee diversity and inclusion, with 34% prioritizing this goal (7% higher than Gen X or older executives). Sustainability also remained a high priority across all age groups.
Thirty-one percent of millennial-led SMBs track their progress with an annual Corporate Social Responsibility (CSR) or ESG-specific report, making them the most likely group to do so. This is another statistic that aligns with a tech-favorable philosophy: we previously discovered that 82% of early adopters use CSR/ESG-specific assessments to report these objectives on an annual basis, making them more than three times more likely to do so than technology laggards. These leaders seek solutions and products that will have a tangible impact on the areas they want to change.
A new generation of buying
As digital natives, millennials’ buying behaviors are steeped in tech culture and have the potential to change the shape of selling. They exhibit more consumer-driven purchasing habits and hold different expectations of the buying experience: virtually 100% of buyers in this category want to self-serve part or all their buying journey, a 13% increase from a year ago. The top three self-serve options that buyers want from vendors are:
- Software pricing (71%)
- Demos and free trials (70%)
- Customer reviews (35%)
Naming “trust” as their top selection consideration, these customers’ prime motivators are recommendations, and they lead the way in using online reviews to research technology. In fact, they are the most likely to consult social media when researching a prospective new technology (31% always consult social media), with older executives being the least likely (only 23% do). They seek out this information in nontraditional ways, too — roughly 20% of this generation relies exclusively on tablets and smartphones to access the Internet.
How partners should tailor their approach
The millennial affinity for self-service buying means that partners should emphasize independence in the buying experience. The majority of buyers (81%) want to find pricing on their own, and we have found that SMBs prefer to engage remotely rather than having face-to-face meetings.
In preparing for sales conversations, familiarize yourselves with some of the key concerns of millennial executives. They are more likely than older executives to view resistance to change as a key challenge (34% vs. 26%). Additionally, concern about inflation is particularly common among millennials; 52% of millennial executives are concerned, compared to 43% of executives of other ages. Sales engagements should focus on how partners can help SMBs navigate these challenges, and how personalized tools can help them build resiliency for future challenges.
It is imperative that partners adapt their sales and marketing strategies to engage millennials with the right message. As your partner, we will work with you to stay on top of emerging trends and connect this new generation of leaders with the tools they want and need. The SMB market is an integral part of our global economy, and I hope you continue to join in the conversation around these customers by exploring the full SMB Voice and Attitudes to Technology Study and following the partner blog for future entries on this topic.