In past blogs we’ve discussed the impact Millennial purchasing power has on the marketplace at large and consumer preferences from the B2C perspective. However, Millennials are also making waves in the B2B sector. They are rising in rank in the workplace; they have higher leadership positions and more influence in purchasing decisions. Their identity as digital natives and their personal preferences as consumers impact the way they buy and sell for the companies they work for.
Attracting the Millennial Talent
Millennials, particularly those at the end of their generation, have never known the work environment without technology. They expect it to be integrated into the workplace flow. Some older generations may be hesitant to implement new technology whereas Millennials embrace it and assume that evolving technology will force adaptation in the workplace. In fact, Millennials are often the largest advocates for digital transformation in business.
As decision-makers within a company, Millennials use digital commerce tools to efficiently communicate with prospects and vendors. Sellers can use digital self-service tools and the like to streamline workflow and focus on building relationships with other businesses, rather than getting bogged down with paperwork. All this in mind, B2B companies must adopt digital commerce tools and other technologies in order to attract and retain Millennial talent.
Adapting to the Digital Native
Up-to-date technology is also vital for Millennials as buyers in B2B organizations. Research indicates that 73% of Millennials are involved in the purchasing decisions of their companies and potential Millennial buyers expect vendors to offer easy-to-use online and mobile platforms. They also perceive sellers as more trustworthy if they utilize technology.
In addition to record-high personal social media use, Millennial buyers also utilize these platforms as a forum to research potential vendors. Rather than performing a google search, they look to platforms like Facebook and Instagram for information. B2B companies must ensure that their branding and marketing cross over to social media to attract up-and-coming Millennial buyers and their purchasing power.
Customer Service is All About Trust and Commitment
Millennials have similar expectations of customer service for B2B brands that they do for B2C interactions. They expect that sales personnel will invest in the interaction to create a personalized client experience. In addition, almost 80% of buyers say that salespeople should serve as trusted advisors. Businesses can build this trust through effective use of technology.
B2B brand expert Howard Beindel notes that many B2B brands are shifting their customer service approach to focus on service design. They center on robust customer-driven experience for buyers. Again, and similarly to their B2C interactions, Millennial buyers expect potential vendors to fully commit to the client relationship.
Appeal to the Emotions
Emotional appeals are another way to build the trust Millennial buyers desire. We often associate emotional appeals with B2C interactions (i.e. heartfelt Super Bowl ads like Budweiser’s 2013 commercial “The Clydesdales”). But connecting to emotion is just as important in B2B marketing.
Don’t buy it? Research shows that the majority of B2B buyers have a stronger emotional connection to their vendors than consumers do with B2C brands. This is especially true of Millennials who are known for blending the boundaries between personal values (i.e. sustainability) and professional ideals, especially as daily life becomes more integrated with technology. As such, there is often a personal connection to the purchase for Millennials. Businesses can appeal to Millennial buyers’ emotions to grow the relationship and build trust.
The Million-Dollar Question: Why?
One way B2B companies can access these emotion-based appeals is by answering the “why” question. In 2010, Simon Sinek gave one of the most popular TED Talks of all time. He discussed why leaders like MLK Jr. and Apple were, and are, so radically different from their contemporaries. He refers to this as the golden circle (pictured right). Successful leaders and innovators are motivated by the “why” or the belief in what they do. Those who begin from the “what” are only concerned with the results and are often unsuccessful. Sinek insightfully noted, “People don’t buy what you do; they buy why you do it.”
Brands who can sell their “why” are more successful. And even though Sinek’s Apple example is of a primarily B2C company, it still rings true for B2B brands as well. If Millennials buyers believe what you believe they will buy from you. After all, as Sinek says, “What you do simply proves what you believe.”
What Does This Mean for the Sign Industry?
Along with the moral and emotional preferences of Millennials, signage companies must also cater to their design aesthetics. Many companies either have or are currently going through rebrands, and Millennials are a part of this process. Signage is integral to site branding, and their design preferences will influence how they help their companies brand and rebrand. Signage companies can obtain corporate Millennial business by offering products that appeal to this generation’s dual aesthetic and utilitarian preferences, like a minimalistic and energy-saving design.
Millennials are the rising players in the B2B marketplace, especially as their personal values cross over into their preferences as buyers. B2B companies can attract these potential buyers (and retain them as sellers) by marketing why they do what they do, adopting new technology, ensuring a rich client experience, and implementing green practices. In this changing marketplace, Millennials are the bandwagon and it’s time for B2B companies to jump on.
At 73.1 million strong, Millennials are the largest living generation. Currently, in their mid-twenties to late-thirties, Millennials have a combined consumer purchasing power of $600 billion, a number that is projected to rise to $1.4 trillion by 2020. Because of this, Millennials are radically altering the marketplace. To tap into this purchasing power, businesses must adapt their products, services, and marketing to accommodate Millennial preferences.
But what exactly do Millennials value in products and services? And what are they actually spending their money on?
Millennial = Digital Native
It seems only fitting to begin this discussion with technology as it is in many ways integral to both of the upcoming topics we will discuss. Millennials are the first generation of digital natives; they are intimately familiar with the increased rapidity of life that technology promotes. They expect that businesses will operate on the same level.
Amazon makes online shopping smooth and easy, while smartphones perform a multitude functions simultaneously. Developing technology also allows businesses to make more environmentally-conscious choices, products, and services. These are all important to Millennials (we will touch more on this later in this article). For this reason, Millennials value technologies such as the internet. They make many facets of life much more convenient and time-efficient.
Convenience: There’s an App for That!
As noted above, Millennials value convenience in all aspects of life. Not only do they want the products they use to be highly utilitarian and convenient, they also want the process of obtaining those things to be flexible and seamless. In order to facilitate this demand, many companies are digitizing their operations.
Harking back to the previous section, technology and the internet are major contributors to this convenience culture that Millennials prefer. Online buyers are able to quickly browse a multitude of choices, compare prices and reviews, and then make a well-informed purchase. Users can also open one of the thousands of retail apps offered on the App Store to make their purchases. While Millennials buy into it the more than other generations, the ease-of-use and variety of options that new technology and the internet provide make the digital experience accessible and convenient for everyone.
Green Eggs and Environmental Friendliness
Millennials grew up listening to scientists, politicians, celebrities, and the media debate the merit of climate change. As a result, they are one of the most green-focused generations in history. In fact, one survey revealed that 87% of Millennials are concerned about climate change, while other research indicates that 90% of millennials prefer to buy from businesses with trustworthy social and environmental practices.
Millennials gravitate toward eco-friendly, sustainable, and fair-trade brands like Patagonia, Love Beauty and Planet, and Whole Foods. They value low-waste production and recyclable products. They also prefer companies with high social responsibility standards; companies that focus on social issues and contribute to charitable causes.
Technology, with regard to environmental responsibility, is also important to Millennials. They appreciate hybrid technologies that create cleaner, renewable energy sources. Paper waste also decreases with the use of digital file storage and sharing.
Millennials are Putting Money Where Their Mouth Is
Millennials’ focus on technology, social responsibility, and environmental sustainability is reflected not only in their purchases but also in their investment portfolios.
As digital natives, Millennials are investing in technology and internet giants like Apple, Microsoft, Amazon, and Facebook. Companies that align with their ideals of social and environmental accountability also attract Millennial purchasing power. Research shows that they are twice as likely as other generations to invest in companies that abide by responsible environmental, sustainable, and governance-based (ESG) practices.
For manufacturing and fabrication companies, being environmentally and socially responsible is critical to ensuring that Millennials will use some of their purchasing power to invest in such companies. These businesses can appeal to Millennials by ensuring they implement these practices.
Millennial purchasing power is ever-growing, and as such Millennials are major players in the business world. They purchase products and invest in companies that they believe contribute to global development and sustainability, offer convenient products/services, and effectively utilize technology. Businesses that can align with these ideals are sure to find success with Millennial consumers and investors.
Check out our other blog discussing how Millennials’ personal and corporate purchasing power is impacting B2B as they advance in the workplace.
In this three-part blog series, we will discuss the Millennial generation in regard to their consumer purchasing power and within the B2B workforce. We will first explore their discretionary income in the marketplace as consumers. Next, we will develop a better understanding of their social influence as a generation, and then conclude with a discussion of Millennial purchasing power as it pertains directly to B2B and the signage/manufacturing industry.
The topic of generational differences has captured the interest of the media in recent years, particularly within the workplace. Now that the majority of millennials have entered the workforce, they have a measurable discretionary income. When you factor in the 73.1 million Millennials currently living in the U.S., it rounds out to some pretty significant purchasing power. To account for this growing purchasing power, businesses are modifying their products, services, and marketing to fit Millennials’ preferences. However, in order to fully grasp the impact of Millennial purchasing power, we must review what has shaped them as a generation and take an in-depth look at their true financial status.
Characterizing the Millennial Generation
While there is some debate about how to categorize the Millennial generation, Pew Research Center offers a comprehensive overview of the Millennial timeline. One notable aspect of the Millennial generation is the internet/technology explosion. The first iPhone was released in 2007; with it, users could access the World Wide Web right from their own handheld device. Millennials never looked back.
Since then, developing technology and the internet have drastically impacted communication and the speed of daily life. They enable lighting fast information-gathering and near-instant communication.
Amazon Prime is one great example of the marketplace adapting to tech-savvy Millennials. With a single click, users can purchase almost any item and expect it to be on their doorstep within days. Other examples include the expectation that emails will be answered in at most 24 hours, if not within the hour. Technology has fostered a culture of instant gratification, and Millennials expect this to be a part of the buying experience.
Changing Financial Landscape
At 56 million, Millennials are the largest generation in the U.S. workforce today. In 2018, the median Millennial household income was $71,400. This is similar to the median household income of $70,700 Gen Xers made at that same age. However, the economic landscape looks a bit different for the young adults of today than it did for previous generations.
It is important to note that many Millennials entered the workforce during the 2008 Recession. This factor had the greatest impact on Millennials who don’t have a college education. Pew Research Center indicates that Millennials with no college degree made nearly $3,000 less annually than what Baby Boomers with no college degree made in 1982.
But what about Millennials who do have a college degree? Does higher education make a difference in financial status?
College Education vs. Student Debt
While Millennials are one of the most educated generations, they have a large residual financial burden—student debt. And though people with college degrees tend to earn more over a lifetime, Millennials aren’t getting quite the ROI on their education as past generations. They bear the brunt of the student loan crisis, to the tune of a combined $1.3 trillion, an amount that has more than doubled in the last decade.
On average, Millennials with a college education carry an individual $33,000 in student loan debt. This is quite the disparity compared to the less than $2,000 that Boomers owed in student debt as young adults. Accounting for inflation, $2,000 by 2019 terms is roughly $4,130. Since 1988, the price of attending college has risen over 160%. One study even noted that Millennials with a college diploma and student debt earn roughly the same amount as a Baby Boomer would have earned with no college degree at the same age.
Other Financial Burdens
In congruence with the student debt crisis and due to the 2008 Recession, many Millennials aren’t buying homes. This is unsurprising considering that housing prices have risen nearly 40% in the past decade.
There are several other indications that Millennials are missing traditional adulthood milestones. A recent report by Business Insider and Morning Consult found that more than half of Millennials don’t have a retirement account and the majority have less than $5,000 in savings. Their discretionary purchasing has also decreased, as exemplified by the fact that Millennials are spending only two-thirds of what Boomers and Gen Xers do on entertainment, and are spending 2% less on apparel.
A New Hope for Millennials
Despite the various heavy financial burdens that Millennials bear, they have a $600 billion consumer purchasing power. In 2020, they are projected to spend $1.4 trillion. This number is only anticipated to increase as Millennials’ advance in their careers. In fact, since 2005 the number of Millennials in workplace leadership positions has increased 15%. Paychex reports that the annual growth rate of hourly earnings for Millennials (5.8%) is nearly double the national average (3%).
For manufacturing companies like NAS, there is one important thing to keep in mind. In addition to their significant consumer purchasing power, Millennials will begin to control what their businesses value in the products and services they purchase as they climb the corporate ladder. They are the future, so businesses must explore how to adapt to the new wave of Millennial demands.
It’s snowing, it’s windy, it’s dark out, and your feet hurt. Why? Because you’ve been standing for hours in a Black Friday line that wraps halfway around Best Buy. You’ve been eyeing that fancy flat screen TV for weeks. You shiver in your parka and think to yourself, “I wish I had just stayed in and done my shopping online this year.” It appears that this is the attitude of many consumers. It also seems like in store retail is dying, or at least changing. So, in an age of online shopping, how can brick-and-mortar retail stores stay relevant?
Brick-and-Mortar Retail’s Funeral March…Or is it?
Let’s quickly jump back to our Black Friday example. This past year, Cyber Monday shoppers spent over $1.5 billion more than those on Black Friday. And this is merely a reflection of a larger trend. In recent years, online sales have far surpassed brick-and-mortar sales. For example, online retail giant Amazon is the epitome of ease and efficiency in online shopping. Online shopping allows consumers to access retailers at their convenience and from the comfort of their own home. But the one thing online shopping doesn’t have? A meaningful, personal customer service experience.
The Game Changer: Customer Service
Offering quality products is still a key aspect of retail, but studies show that customer service is also critical in a customer’s decision to purchase. And a truly impactful customer service experience can only occur in-person. Brick-and-mortar retail businesses trying to get ahead are upping their customer service game and improving consumers’ in-store experience. Don’t believe me? Believe the research:
- 73% of consumers say that interacting with a friendly employee or customer service representative makes their experience memorable and increases brand loyalty.
- 52% of consumers have made an additional purchase after having received excellent customer service.
- Americans are willing to pay 17% more to do business with companies providing quality customer service.
- 89% of consumers switched to a competitor after receiving poor customer service.
- Companies with quality customer service can increase revenue by 4%-8%.
- 54% of consumers say they have higher expectations for customer service than they did last year.
The Necessity of Quality Customer Service
Now, we’ve probably all experienced poor customer service that was slow and oozed apathy. But we’ve also all probably encountered an empathetic customer service provider who anticipated your needs, ensured you had a personal experience, and aided you with quick and efficient service. Above all, it’s these in-person interactions that make an experience memorable for a customer and set your business apart. It will also increase your customer return rate. Customer service is the most important factor in someone’s brand loyalty. In other words, it’s a big deal.
Overall, quality customer service will contribute to your brand’s image. It will get people in your store, create a strong rapport with customers, and totally differentiate you from the competition. Simply put, excellent customer service is no longer a mere suggestion—it’s a necessity.
While 2018 may feel as if it was only a couple weeks ago, it’s no surprise that 2019 is here, and it’s moving fast. You may even find yourself feeling behind with Q1 coming to an end. The good news is there’s no need to worry, we’re here to keep you up to speed and provide insight into what branding and signage trends you need to be on top of to increase your ROI for the remainder of 2019.
1.) Attract more customers and increase foot traffic.
Seems simple, right? Grand opening day has arrived. You’ve put a sign on your storefront, and now potential customers walking or driving by will start pouring in. What about the ones who don’t make it through the doors though? Yes, it’s possible they don’t have a need for your product or service, but what are some of the other (controlled) variables that might deter a potential new customer from stopping, or walking in? Number one, the quality of your signage. 20% of consumers report being drawn into new stores based on the quality of their signage. (signresearch.org) In my personal experience. I have yet to meet a Director of Sales that would not want to increase new business by 20%. When purchasing a new sign make sure to go for quality. The upfront cost may be a little higher, but pennies when compared to the potential ROI increase.
What about the businesses that just don’t have the budget for new “shiny” signage? Sign repair and maintenance programs are cost-effective and practical if new signage is not in the budget this year. Not everyone can replace their signs when they start to look a bit older and depending on your region, the elements can take a toll on your exterior branding. Refreshing your existing signs with new vinyl or faces, having your awnings cleaned, or polishing exterior brass are all budget-friendly ways to ensure your stores are looking their best. A 20% boost in new sales will make that budget look much better the following year when discussing signage upgrades.
2.) Build Brand Awareness
If you’ve followed the advice in tip #1 you’re probably thinking “that’s all great and dandy”, but how do I even get people to walk/drive by my business. High-quality signage doesn’t do anything if no one sees it, right? This thought process is 100% correct.
It may seem obvious but, the more evident you are about who your brand is, and who you are trying to reach, the higher the chance for success. (signresearch.org) “Did he really just tell me in need to like myself if I want others to like me”? Yes, yes I did. It all comes down to transparency. As I’m sure you’re well aware it’s 2019; there is no more B2C or B2B. It’s all B2P (Business to People). Your brand is your companies personality, and people buy from people like themselves or people they like.
Know your brand’s personality, stay consistent with your brand’s voice, and know who it is that will benefit most from your product or service. Speak to them personally, and when trying to reach them whether it’s through print or digital media be sure to do so on the platforms where they spend time. The biggest mistake business will make is trying and reach prospects, or potential clients in spaces that they do not visit frequently, or at all. Remember, we don’t buy a 1/8th drill bit because we want a drill bit. We buy it because we want a 1/8th hole.
3.) Gain Valuable Customer Feedback
Okay, so tips #1 and #2 take some time and effort to properly execute. So, for tip #3 we’ll keep it simple. Every consumer who walks in your store has a story and an opinion. Hear them out. See what you are doing right, and learn how you can improve. (signresearch.org) People love to share their experiences. Whether it’s through word of mouth or socially online. The downside, “Americans tell an average of 15 people about a poor service experience, versus the 11 people they’ll tell about a good experience.” (American Express 2017 Customer Service Barometer)
You can send/hand out customer feedback surveys, or hire third-party companies to provide data on what your customers care about most to get the “best” feedback. Or, you can simply ask the customers themselves. Was it easy for you to find our location? Was it easy for you to navigate through our facility/store?
In tip #2 we discussed reaching new and existing customers in “their space”. If your a brick and mortar store, great! You can have face-to-face conversations with your customers, and what better way to get to know someone than conversing with them directly. If the majority of your business is done online or through e-mail, start conversations in digital social spaces. Interact and actively participate with the customers themselves. For example, hospitals’ way-finding signage is of the utmost importance as every second counts in an emergency or emotional situation. Customer feedback on the ease of navigating the facility has been precious information over the years and has helped to continuously improve our healthcare facilities. (for more information on wayfinding signage)
4.) Set Consistent Expectations
As mentioned in tip #3 (see a pattern here) people are more likely to share a negative service experience. So how much is a good customer experience worth? “Good customer experiences lead 42 percent of consumers to purchase again (Zendesk Customer Service Study).”
While as a business we always attempt to exceed our customer’s expectations. Keeping consistency when their expectations have been met is just as important. Using signage that is congruent with your brand will help customers know what to expect each time they enter your store. (signresearch.org) We’ve all heard the term “creatures of habit”, and if your business is one that benefits from repeat business. Staying consistent with your interior/exterior branding is a good way to boost customer retention rates.
5.) Increase Store Value
Pop quiz! What’s the most important factor when opening a new store? ANS: Location, location, location. So, what’s the 2nd most important factor? ANS: Proper market research to prove a direct correlation between the need for products and services your business provides, and the market you are entering. Umm… well. Yes, that’s up there (top 3 for sure), but how about the aesthetics of your store? Using brand image to establish a design language is one of the possible implementation schemes available when understanding the design thinking process. Design-oriented firms with proper signage increase in value at a much faster rate than their counterparts. (signresearch.org)
Almost immediately the first impression someone will have of your space is the storefront sign. It does so much more than provide your companies name, or describe your products and services to the general public. It’s not only there so your store is easily located, or to draw attention to those who pass by. It’s your brand, your “team” colors, your logo, message, voice, etc… I can go on, but you get where this is going. It’s a physical representation of your business’s personality. As adolescents, you may have, or know someone who had used outlets such as clothing choice, hair color, or even tattoos and piercings to express individualism (your personal brand). Your interior and exterior sign packages do the same for your business. The design process of such packages is one more piece of the puzzle when accelerating growth and increasing ROI.
6.) Increase in Sales
One of two things has happened. You’ve made it this far, and are now ready to start using the information you have just learned to increase your ROI, or you scrolled straight down to the “Increase in Sales” heading, because let’s be honest. Increase in ROI means an increase in the bottom line and we all want tips and tricks to boost sales as quickly as possible. Unfortunately, there is no hidden formula in this section to increase sales overnight. What is available though are the tips above that all impact your business sales directly on a daily bases. Sometimes they are overlooked, and sometimes we don’t have the available time to think through every aspect of our business that lends itself to boosting sales. We’re focused so thoroughly on new business development and client retention that the small upgrades to our current processes or resources are skimmed over. Signs, whether interior or exterior, play a vital role in the success of a company’s growth. These tips will help to accelerate that growth and are all cost-effective or free (in some cases) ways to boost your ROI. According to the Sign Research Foundation, 60% of businesses see an increase in revenue by 10% or more after installing proper signage. (signresearch.org) Follow these tips so your business doesn’t miss out on making that 60%.