Marketing to millennials: What every business needs to know about the new generation of consumers
Tuesday, August 6, 2013/
Jeff Fromm owns an independent marketing agency in Kansas City, Missouri, and he had a problem.
His clients kept coming to him with issues around how to reach the newest generation of customers. He could see it was a huge issue, but couldn’t find much in-depth data to guide his advice to clients. And so, Fromm partnered up with the Boston Consulting Group to conduct a major study on millennial attitudes towards marketing.
Between 2011 and 2012, the Boston Consulting Group interviewed more than 4000 millennials (also known as Generation Y), and another 1000 non-millennials for comparison. The results of that data went into a new book, Marketing to Millennials, authored by Fromm and journalist Christie Garton.
Garton spoke to SmartCompany from Missouri last week on what she and her co-author learnt about millennials.
Punching above their weight
The millennial generation, defined by Fromm and Garton as those aged 16-34, is responsible for $200 billion of spending annually in America.
They’re the largest generation since the baby boomers (comprising 25% of the American population), but account for far more spending than their size or earning power would suggest.
“Something like 60% of young millennials influence their parents when it comes to purchasing decisions,” Garton says.
“Kids are the chief tech officers in their households. Parents look to their children to provide those recommendations.
“And the recommendations they get aren’t just the result of kids talking to their friends. Young people have become extremely savvy about using online reviews, expert opinions, and teach their parents to be savvy too.”
Because of this influence, American millennials are believed to impact on $500 billion of annual spending in America – a sizeable and growing portion of the economy.
Millennials aren’t all the same, but one-size-fits-all solutions are on the way out anyway
The BCG survey found six major subgroups within the millennial generation (see the bottom of this piece). These groups differed in their attachment to technology, their spending habits, and their interactions with others.
This doesn’t make marketing to the group impossible, because marketing for the 21st century needs to change anyway.
Most millennials don’t want to engage directly with brands online. Instead, they generally turn to brands only when they’re seeking more information.
This means brands have to actively listen to the conversations going on with and about them, and offer information about their products only when it’s relevant.
“In the book, we told the story of a young woman who was looking for a new car. After a lot of research, she identified the Ford Fiesta as the car most perfect for her needs. But when she went to her local dealership, they didn’t have the car she was looking for.
“She was about to buy another car, when she tweeted her regret that she hadn’t been able to find what she was looking for. Ford’s customer service then quickly responded to her and helped her find a local dealership with the car in the colour and make she wanted.
“That’s great customer service. They didn’t necessarily go out and write a press release. They just took the opportunity to respond in a personal way. And then, this customer was out there tweeting and sharing about how great the service she received from Ford was.”
Scratch my back and I’ll scratch yours
Millennials don’t mind giving out their information. But they do mind if they don’t feel like they’re the ones deciding, or if the trade-off isn’t clear.
“Loyalty rewards are a big deal with millennials,” Garton says. “They’re a great opportunity for brands to engage with their customers.
“Research has shown that millennials rate loyalty rewards as a top incentive when it comes to giving away personal information to marketers. And they’re 50% more likely than other generations to talk about those rewards on social media.
“So make those rewards come quickly and be only a click away.”
What you need to figure out and why you need to do it now
The first thing businesses looking to market to millennials need are good, informative websites that work on mobiles and tablets.
The second thread is around messaging.
“It comes down to brands figuring out what is their core message to share with this audience, and then, be out there and doing it authentically. That’s a big word with this generation. And brands need to be talking authentic consistently.”
For business owners, particularly SMEs, the good thing about marketing to millennials is that it doesn’t have to cost a fortune, Garton says.
But it is necessary. Many of the traits associated with how millennials engage with companies and brands are a result of their familiarity with technology. And as technological literacy grows, these traits are spreading.
“Increasingly, we’re seeing older generations adopt what we call ‘millennial mindset’,” Garton says.
And that means, soon enough, all your customers could be acting like millennials. It’s worth figuring out how to talk to them sooner rather than later.
The Six Millennial Personas:
- The Hip-ennial – 29% of millennials surveyed: cautious, charitable and information-hungry
- Old School Millennial – 10% of millennials surveyed: disconnected, cautious and charitable
- Gadget Guru – 13% of millennials surveyed: successful, wired and free-spirited
- Clean and Green Millennial: 10% of millennials surveyed: impressionable, cause-driven, healthy and green
- Millennial ‘Mom’: 22% of millennials surveyed: wealthy, family-oriented and digitally savvy
- Anti-Millennial: 16% of millennials surveyed: locally-minded and conservative
Source: Marketing to Millennials, by Jeff Fromm and Christie Garton (2013)