20.09
Young generations now make the majority of business buying decisions — and they demand a seamless, tech-forward experience
While there are plenty of ways to distinguish millennials (born between 1981 and 1996) from Gen Z (1997 to 2012), one common thread is the effect of “growing up online.” Younger generations are inherently savvy when it comes to using digital products and services; beyond that, their expectations as consumers are also heavily influenced by their upbringing.
In the context of B2C marketing to younger demographics, what holds true for millennials and Gen Z should dictate how companies engage with both, especially when it's their target audience. The more intriguing development, however, is occurring in B2B, as a larger percentage of younger professionals are making key buying decisions.
How large? According to Forrester, millennials and Gen Z make up 64% of business buyers — with millennials alone making up over 50%. It’s a dynamic that is dramatically shifting the B2B sales and marketing landscape, and one that will only increase as baby boomers and Gen X continue to age out of the workforce.
For SaaS companies, this growing emphasis on digital savviness and expectations is magnified by the nature of the products they sell. When targeting a younger buyer persona for marketing, you’ll need to consider how it affects your strategy from a holistic level — including the channels you need to utilize and the product specifications younger buyers demand.
What do younger business buyers demand? It will weigh heavily on their role (e.g., selling to a startup CEO vs. a department head) as well as the needs and budget restraints of the company as a whole.
A few traits and priorities that are common throughout millennials and Gen Z include:
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Peer-to-peer marketing channels
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Best-in-class UX and CX
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Self-guided/self-service platform (for purchasing and subscription management)
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Products that are configurable and customizable
So, how do SaaS companies solve for this emerging and growing class of business buyers?
How to Market SaaS Products to Millennials and Gen Z
A top priority for any marketing strategy is figuring out how to reach your target audience. The good news, with regard to millennials and Gen Z, is that they are frequently online. More so, the growing synergy of social media and the business world has created endless channels to engage with young business buyers, as opposed to more unsolicited outbound marketing strategies (e.g., cold emails).
Whether in a B2B or B2C context, millennials and Gen Z can be classified as “information seekers.” From reading reviews, to watching tutorial videos, to conversing with peers on social media, younger buyers are way more likely to explore third-party channels on the path to purchase.
Due to millennials’ and Gen Z’s eagerness to seek out information about a product before buying, employing an affiliate marketing strategy is a beneficial route for SaaS companies. A growing trend in digital customer acquisition and revenue growth, affiliate marketing leverages third-party publishers and channels to promote a company’s goods or services in exchange for commission.
In the B2C space, affiliate marketing has taken on a new form thanks to social media influencers, who wield a lot of buying power among their loyal followers. In general, affiliate marketing drives roughly 16% of ecommerce sales in the US and Canada, while 80% of brands use some type of affiliate program. For SaaS products in particular, the incentive is very high for affiliates as they offer some of the highest commission rates — as high as 70%, which tops the affiliate market.
While influencers touting brands to followers is typically associated with B2C, the opportunity is also ripe in B2B SaaS. Young business buyers often look to platforms like YouTube, Linkedin, TikTok, and G2 to explore different software solutions, making it vital for SaaS providers to have a viable presence across affiliate channels.
In addition to working with affiliates, SaaS providers also need to consider their broader content marketing strategy when marketing to millennials and Gen Z. Content is king in digital marketing, and extends from a company’s website to all owned channels (e.g., email marketing, social media, apps, podcasts, etc.). Since younger buyers are information seekers, optimizing content for Google and other search engines is necessary in order to garner organic traffic, impressions, and engagement.
Examples of youth-centric content include: a regularly updated blog (industry thought leadership, as well as product marketing), social media posting (multiple times a week, with optimized keywords and hashtags), webinars (that are engaging and stay on top of trends/data), and video content (quick-hit YouTube clips that are informative and energetic).
By combining all of the above efforts, SaaS companies can foster better community building online, which boosts brand awareness and strengthens relationships with young business buyers, while also improving products through feedback, increasing referrals, and other benefits. According to Gartner, community involvement can offer an average ROI of 6,496% for SaaS companies.
How to Convert and Retain Millennials and Gen Z
Attracting millennials and Gen Z is one thing, turning them into loyal, satisfied customers requires a whole different set of tactics. The same way younger demographics are astute in how they go about finding SaaS products, they are equally knowledgeable and demanding as far as making purchase decisions.
Whether in B2B or B2C, an important factor SaaS providers need to consider is flexibility at the point of sale. That includes accepting diverse payment options, but also providing self-guided or self-service channels — i.e., ecommerce via vendor sites, marketplaces, app stores, or subscription accounts. Forrester predicts that by 2025, more than one-third of millennial and Gen-Z business buyers will purchase through these types of channels.
More than being self-service and automated, the buying experience — in fact, the entire customer experience — should be as frictionless as possible in the eyes of the young business buyer. Friction at any point in the customer lifecycle is detrimental to conversion and retention, as millennials and Gen Z are way more likely to jump ship to a competitor due to a poor user experience.
The significance of appeasing these younger demographics is key when you consider how integral they are to their companies — 56% of millennials hold director-level roles or above in B2B. In comparison, 44% are the primary decision-makers. They also wield tremendous purchasing power, as far as SaaS products valued at $10k or more.
When you factor in tighter budgets and other constraints, SaaS providers need to be especially agile in retaining young business buyers by offering robust digital products. With respect to their tech-savviness, 51% of millennial buyers desire detailed specifications before purchase (38% prefer product demos or trials), to ensure solutions can meet their needs. Flexibility is also of great significance — 60% of millennials say the ability to specify and configure solutions is a top factor when selecting a vendor.
That flexibility extends to subscription-based models, as young buyers demand the same self-guided and self-service options they had at the point of sale when it comes to renewals, in-product purchases (e.g., cross-sells and upsells), and other aspects of account management.
Bottom Line
It’s clear from all of the above that millennial and Gen-Z buyers, especially in B2B, employ a lot of sourcing and scrutiny when seeking a digital solution. Having grown up deeply immersed in the information age, it is ingrained in them.
While a lot of this is based on personal habits, there is also the heavy influence and emphasis from leadership to control budgets, align company-wide priorities, and consolidate resources.
The consolidation part is key when selling SaaS products to millennials and Gen Z. With so many demands in today’s SaaS market, companies are looking to significantly reduce their tech stack through all-in-one, end-to-end solutions.
At Cleverbridge, we make it easy to attract, convert, and retain buyers — regardless of demographic — all through one easy-to-setup and easily configurable ecommerce platform. Interested in trying it out? Book a demo today.