Millennial tech buyers forcing channel to change sales approach

A new study released this week claims the millennial workforce is changing the how tech is purchased within organisations.

The research by Spiceworks highlights how millennials are influenced by a different mix of brand and product attributes compared to Generation X and baby boomers – meaning channel firms will need a different approach to sales and marketing if they are to successfully engage with their customers in the future.

“Millennials are moving up the corporate ladder and are becoming more responsible for IT buying decisions. This is going to have a big impact on how the channel markets and sells to its buyers,” says Sanjay Castelino, vice president of marketing at Spiceworks. “We know millennials’ tech preferences and buying habits are markedly different from previous generations, and the channel will need to cater to them accordingly.”

The results reveal that 65% of millennials believe the technologies they purchase for their personal use influences the technologies they purchase for their organisation.

It also indicates that “meaningful brand relationships” are more important to millennials than to previous generations of tech buyers: more 60% prefer to purchase from tech brands that “focus on building a relationship, compared to those looking to secure a quick transactional deal”.

Likewise, 34% said they need to have a personal experience with a tech brand, such as an email exchange or in-person encounter, before making a purchase, compared to 25% of Gen X and 17% of baby boomers.

“It’s essential that channel partners and resellers fully understand this new generation of IT buyers, and engage with their distinct interests and drivers,” says Castelino.

“Millennials are much keener for businesses to engage them as people, rather than simply as a sales lead. Cold calling and mass emails simply won’t cut it, as they want personal experiences and meaningful relationships with the brands they do business with.”

The study shows that three-quarters of IT buyers believe a strong brand reputation is the most important attribute when it comes to evaluating technology vendors. Nearly half said it’s important or critical for a tech vendor to be a leader in the market and a third said the vendor must have “sustainable business practices.”

Millennial tech buyers think it’s more important for a company’s mission to align with their values, and they are less concerned about how long a company has been in business – only 23% of millennials said it’s important or critical for a company to be established for at least 10 years.

Estelle Johannes, director of member communities at IT trade association CompTIA, agrees that brand is important, as is the user’s experience with technology.

“Younger workers also expect to take a more hands-on approach when it comes to management and maintenance. They expect to be equal partners with the internal IT staff or the external IT solution provider,” she says.

Channel partners also need to keep in mind that millennials tend to put less of an emphasis on high-quality support than previous generations.

“While this could seem counter-intuitive, this could well be because they grew up in the digital age and feel confident supporting their own technology,” says Castelino. “Instead, millennials prioritise reliable, secure, and cost-effective devices that meet the changing needs of employees in their organisation.”

Another challenge is that purchase decisions can come from any corner of the customer’s organisation.

“The new IT buyer could be anyone, with any title, from any department or business unit. Chief marketing officers, finance heads, executives from human resources, logistics, and sales departments are all asserting leverage in IT decisions today,” says Johannes.

“From a channel perspective, this growing dynamic necessitates a change in approach on a variety of levels. Selling and working with business-oriented constituencies is an altogether different animal than negotiating a product upgrade or managed services’ SLA with a CIO or other IT-related end customer.”

Ultimately, Johannes believes the new IT buyer is “less interested in technical details and more interested about business outcomes.”

“They have their own vernacular based on their business function and the vertical industry they inhabit. As a result, selling to this new class of buyers has implications for the entire channel business; in everything from marketing and lead generation efforts to sales strategy, staffing, training and more.”

CompTIA data suggests that an estimated 40% of the channel is expected to retire over the next 10 years. Elsewhere, PWC’s global Millennials at Work study, says that by 2020, millennials will form 50% of the global workforce.

This means the channel must embrace a new way of engaging with the latest generation of tech buyers.

Therefore, Castelino says that “to ultimately reach and influence these technology buyers, it’s important to add a human element to your campaigns and engage them as people vs. simply a sales lead.”

“It’s all about knowing what you’re selling and to whom,” he tells Microscope. “Channel partners need to keep this front of mind when deciding on their sales and marketing approach. Their audience is always going to change, so why shouldn’t their engagement strategy?”