This week on the Friday 15, Andy & Brian talk about the marketing challenge B2B companies have with attracting younger workers, and some of the strategies that have worked.
“The issue is a messaging problem, it’s not a reality problem. B2B offers many of the things that Gen Z is looking for – B2C talks about it, but B2B actually offers what this generation wants.”
They discuss how companies have tried advertising with NASCAR, building relationships with local colleges, winning “best place to work” awards and more…
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Brian Beck: Welcome to Friday 15 with Brian Beck and Andy Hoar, your co-host in our weekly Friday sometimes 15 minute podcast. Anyhow, welcome everyone to Master B2B. We’re here to talk about those crazy kids, Gen Z, right, Andy? We’ve got some fun topics on tap for today, but before we do that, Andy, we really need to just share something on our breaking news. Amazon introduces vendor managed inventory – vending machines sitting in facilities around the country and the world. This is a traditional way that B2B has gone to market, thinking about companies like Fastenal, Grainger and others, where inventory is sitting on the edge, sitting right next to the use of the products and their resupply, just like vending machines are. And Amazon is now in this business, Andy. This was just announced at the Amazon reshape conference in Dallas. What do you think?
Andy Hoar: What I would say is that for Fastenal, in particular, they have thousands and thousands of these vending machines on work sites. And so, you just order a glove on the phone, you go to the machine, you pick it up, but there’s a whole supply chain around this, like who’s going to stock these machines? Who’s maintaining the machines, etc. I don’t know that part of it. I don’t know if we know the details. Even if Amazon is building the machine, I doubt they would contract with somebody. But let’s see how this works. But I think if I’m a Fastenal I’m a little concerned here because they can be in a lot of different places. Plus all those workers already have Amazon apps. So they’re starting with an advantage here. But we’ll see how this plays out. What are they going to carry in there? Is it the standard kind of fast moving products?
Brian: I can tell you. Andy, if you look at the assortment that Amazon carries, Amazon Business, It dwarfs the assortment of most distributors and the category leaders in those categories. Electrical products.
Andy: Yeah, but they can sell them all in the same way?
Brian: No, of course not. No, but it goes to what we’ve talked about in prior episodes here, Amazon is a supply chain company. They have supply, global supply chain services, global supply chain solutions. They’re selling shipping services. They’re bigger than FedEx and UPS. Now in the US market, they are doing all the way back for global sourcing. They have solutions all the way through. This is the AWS playbook. This is the Amazon Web Services playbook for infrastructure and supply chain management. They’re in this business, make no mistake. So yes, your traditional distributors need to be aware and paying attention to all this. I’ve been saying this for years. They have to be paying attention. It’s fascinating to see this. I kind of thought it might be coming, but now here it is. All right, so let’s get to our topic today. We’re going to talk about what’s the best way for companies to convince younger workers that B2B is a good career bet. We’ve been running this theme for a couple of weeks now, Andy. And we found some really interesting statistics when we surveyed our audience. You know, we did a survey last week and we asked the question “Is B2B destined to always be Gen Z second choice for employment?” and 65% said yes… Oh my goodness. So how do we make this industry attractive to this new generation of workers who are now in their 20s, right? So many of them are entering their, or well into their,– 20s and they are now the generation that’s being hired into entry level jobs. As we discussed on our podcast last week, B2B does have elements that Gen Z looks for, things like work life balance, diversity and inclusion, mental health awareness, career progression. It checks a lot of those fundamental boxes. I think Andy, you found some additional research here.
Andy: The issue here is a messaging problem. It’s not a reality problem. We’ll talk about here in a moment because B2B offers many of the things that Gen Z is looking for. In fact, in greater quantity and higher quality than some B2C companies, which only talk about it, but B2B actually does it. You know, that statistic about the 65% say it’s a second choice. We’re not surprised by that, but we’re shocked that it isn’t shocking more B2B companies. And this is some additional research that we found from a company called Ripple Match, which actually has studied Gen Z pretty extensively. And they award companies for achieving certain dimensions of the business that appeal to Gen Z. And so, what’s funny is that their stuff is very similar to what we talked about, which you just showed on the screen. Gen Z, again, is a theme here. They want to learn. They’re very interested in training. Many of them graduate from college, not having had a lot of exposure to these businesses or business in general. And so, they’re eager and anxious to work, but they’re not quite sure what it is. So, training and development matters a lot. If you just throw people into the deep end and say, “Hey, you can make a lot of money here, but you’ve got to figure it all out on your own.” Again, we’re making broad generalizations here, but that’s what this research is about. Company culture matters. They don’t want to work in highly competitive environments where they’re cutthroat, just ask the banking, investment banking industry, how that’s working for them or high tech, as we’ve talked about last week. It only attracts a certain type of person. And I think en masse, they struggle to get Gen Z’s to actually want to work and stay in those companies. B2B companies are more familial. They take things seriously. They expect you to be there for more than two years and hop off to another circumstance. So, there’s more endurance about it. But, you know, RippleMatch said that the well-being and the company culture really matter. Another big one is financial security benefits. This is the generation that came of age, let’s say, they’re in their 20s now. They were kids and they saw their parents struggle with the financial meltdown of 2007. And so, they don’t want to repeat that. We see this every so often in various generations, like the children of the depression era, kids were more conservative with their cash, et cetera. This is what we’re seeing. So, this generation really wants companies to think about 401(k) programs, retirement programs, making sure that there’s a safety net for them. And so, that’s another dimension. And the last one, of course, is very popular. This generation is concerned about diversity, equity, inclusion, and being an inclusive company. Not seeing differences, differences, et cetera. And it turns out, the reason we knew about this one was because Grainger actually was named one of the Next Gen 100 by Ripple Match in 2021. So, it is possible for B2B companies to appeal to Gen Z, and this is a case in point.
Brian: And why were they named, Andy? What kinds of things do Grainger do?
Andy: Well, they actively promoted these things. They sought these awards. They have an office where they have people who are focused on these things. That’s what you have to do. You can’t accidentally get these awards. You have to make an effort. And so, they tic the boxes around learning development, 401K and retirements, the DEI stuff, the diversity equity inclusion. And it’s a family environment. B2B gives you opportunities that you’re not going to get B2C.
Brian: But it’s marketing, right? I mean, essentially, you’re saying here that Grainger is effectively marketing to this next generation the things that matter to them. And that’s why they won this award.
Andy: By the way, interestingly enough, in this case with the next company, we’re talking about two. These are their customers. Last but not least, what about Grainger? Grainger has been at this a while. Again, they didn’t accidentally get themselves into this. They intentionally sought these awards. Because in 2018, they actually won an award for Gen Y, which is the generation prior to this, as a good place for millennials to work. So this is a continuation of a theme. They’ve invested in this stuff. They’ve appealed to it. And they’ve won awards and they’ve delivered. Fastenal is taking a different approach. We don’t have insight into everything Fastenal is doing, but just from the outside looking in, this is what we saw. Fastenal is heavily invested in NASCAR and NHL, which by the way, appeals to that younger generation on two levels, one to work there and two, as customers. I’m not sure if this is more about appealing to them as customers or as employees, probably a little bit of both. But certainly, this is a step in a certain direction. This appeals to Gen Z men, right? But this is not the only thing they’re doing this year. And I’m not sure this is the first year, but this year, they released an environmental, social and government, environmental social and government report, ESG report talking about how Fastenal cares about the environment, what they’re doing about it. This is the kind of stuff that appeals to Gen Z. So they’re waking up to this as well.
Brian: Yeah, it’s interesting, Andy, to see – this doesn’t come naturally,I don’t think, to a lot of traditional B2B companies, particularly the leadership that grew up in a different generation. So I think it requires companies like Grainger and Fastenal to be very intentional about it to appeal and really market the things that already exist in the company, those elements that do appeal to Gen Z. And so we asked our community about this and I wanted to share one response – Betsy Ruderman, who is a senior manager, of digital at Zurn Elkay and she’s also an adjunct professor at Marquette. She teaches Gen Z, … this is an interesting quote, in one of our round tables in Milwaukee…she said, I was talking with Matt Hutchins, who leads e-commerce at Direct Supply which is a home healthcare – Equipment manufacturer and distributor for senior living. So Matt Hutchins runs e-commerce with Direct Supply and told him what a great job they’ve been doing at becoming a sought after employer among her students, which is not an easy thing to do in some of the less sexy areas of B2B like, well, there you go, senior living. What I think they do well, referring to Direct Supply, is consistently being on, being present on campus, and they have a dedicated university relations employee who is phenomenal. So they’re making that really deliberate effort to be in front of this market, being present on campus and marketing themselves, right, Andy?
Andy: This is a theme that we saw throughout a lot of the comments that we got when we posted this and said, hey, what are you doing to attract Gen Z? This is particularly interesting because Betsy is also, like you said, an adjunct professor at Marquette. So she lives in this world. She teaches the students there while also being on the team at Zurn Elkay, which is the water management company. And so she took the opportunity to recognize Matt and Direct Supply for the job they’re doing because she’s seen the other end of the spectrum. That’s what it took. You have to have dedicated professionals. As you said, they’re on campus. They’re appealing. And they’re taking something unsexy like senior living, but it probably ticks a lot of those boxes we talked about earlier.
Brian: Yeah. It’s a good place to work. You can learn a lot. They’re good people there, et cetera. Yep. So Dave Allen. Dave Allen, Director of E-Business at Sager Electronics. He had an interesting point of view here. And he was actually commenting on Betsy’s comment in the forum. He said at Sager Electronics, we can attribute much of our success in recruiting recent grads to our internship program, which is very similar to how Betsy Ruderman described the program at Zurn Elkay. Another thing that helps is that– this is still his quote– that helps is that being an electronic components distributor, many of the parts we sell end up in something cool like robots and race cars or in something useful like advanced medical devices. Again, this stuff, goes back to the points you made earlier that we saw in that research, which point to the fact that these elements, which B2B again already has, in many cases, they’re just– they’re marketing them, right? The internship program, the value of training to Gen Z, apparently is very high. So companies like Sager are developing those things. They’re leaning into it to attract the right employees. Any thoughts on this one?
Andy: I think good customers are also good employees. And I think that’s what he’s saying is, we saw stuff that people like and they like to use and maybe they’re consumers of these things. Maybe they have these robots either professionally or personally, and then they want to work at a company that’s distributing those things. So this is exactly the point. And we saw this too with our last comment from Justin Renaldi, who’s also in the manufacturing space. He said, working for an industrial manufacturer, I’ve engaged the younger generation by building relationships with local colleges. I’ve also had good success spending three to four days a year speaking with classes at local high schools. As local high schools are also giving our brand priority and projects that used to go to our competitors. Now that’s a very sharp idea, which is, hey, I’ll come speak at the school. In exchange, why don’t you guys buy our products? So that’s a good way to promote not only working there, but also becoming a client.
Brian: So Andy, we asked our LinkedIn community, what’s the best way for companies to convince younger workers that B2B is a good career bet? We wanted to ask the question to a broad audience. And number one, we offered four options. Number one option, and answer that question was, emphasize work life balance, 55%. So there’s a real value in that to this cohort. 25% said emphasize the importance of the role I’m getting into. 20% said get cool, voted for get cool, tech, funky offices. 0% said focus on the work family, meaning your colleagues and hey, we’re going to be a family here at work. So I guess that doesn’t have much value.
Andy: The work-life balance one is interesting because when I was coming out of college, I don’t know if you had the same impression. But if somebody said we have a proper work-life balance here, I would’ve thought, “so what? I don’t care about that.” But it is clearly something that has worked its way into our society. I think it’s the Europeanization of American businesses, too, where you get all the time, like, oh, they have a four-week, six-week vacation in Europe. I want one of those, too. And so younger generations usually have to earn that over time, but younger generations think they get that right away. So that’s the way it is. Well, but you know what’s interesting about that, too, is that when you think about other places, other types of employment, you mentioned financial services are working on Wall Street or even consulting or things like that. Choices that people have, B2B can do that better than most of those other categories or a lot of them. The work-life balance is a real thing with B2B companies and a lot of them, of course people say not in mind, but that is really something that B2B can offer. And I do hear that. And it’s just why you do see longevity and have employees at these places. There’s truly that balance there.
