“Get ready, America. With more than 80 million in their ranks, the Millennials (born between 1977 and 1995) are taking center stage. Comprising roughly 25% of the U.S. population, as a group they are larger than the Baby Boomers (born 1946 to 1964) and three times the size of Generation X (born 1965 to 1976). But it’s not just their size that’s impressive. Collectively, they are exerting their power and influence like no generation that’s come before.” —Jeff Fromm and Christie Garton
Marketers need to understand how Millennials think and act when making choices about products and services, so that they can best convey their brand’s message to this unique generation. This knowledge is more important than ever, because Millennials are coming of age, entering the workforce, and even starting to reach their peak earning and spending years.
Millennials comprise about one-fourth of the U.S. population. You can’t ignore them.
Bankers know that Millennial customers and employees are unique from their predecessors in many ways. But which of their distinctive qualities and behaviors affect their purchasing decisions, and how?
A recent research study, the basis of this valuable book, explored these questions. Co-author Jeff Fromm is executive vice-president at Barkley, a Kansas City, Missouri-based advertising agency. Fromm and his agency completed a nationwide survey of Millennial consumerism in partnership with The Boston Consulting Group and Service Management Group. The results of the study were the basis of this book as well as several other publications by the participating firms.
Co-author Christie Garton is a Millennial entrepreneur whose media company provides content, products, and resources geared toward college-age women.
The study defined “Millennials” as those born between 1977 and 1995 and sought to fill what the researchers perceived to be a void in the available data on Millennials' habits and motivations as consumers. The banker reader will find this a good guide to what’s different about reaching this generation.
Characteristics that count
Among Millennials it is acceptable and even “cool” to be friends with your parents.
This is in stark contrast to previous generations, which were typically more rebellious against parental authority. It is important for marketers to understand this difference, because Millennials will not be drawn to tactics that pit them against the authority figures in their lives. They value the opinions of their elders. They consider them trusted advisors.
Another important way that Millennials are unique is that they actively try to assimilate older generations into their culture by helping them fit into the digital environment.
This should strike a chord with most Millennials and their parents. Often we Millennials—I’m one myself—are asked by our parents to recommend a new computer; help them decide whether to subscribe to an online streaming service; or help them set up a new tablet. (Sometimes this assistance is rendered from two states away via telephone, which I don’t recommend.)
We explain to them why you shouldn’t click on pop ups, and how to safeguard their personal information in a world of ever-increasing online identity theft. Our parents and older family members are our trusted advisors—but we are also theirs.
Millennials and their sphere of influence
This distinction is significant for marketers because it underscores the importance of the Millennial generation and solidifies why they must not be ignored. Their spheres of purchasing influence include their family members.
In fact, Millennials’ spheres of influence extend far beyond family members and include peers.
Millennials are prolific advisors to one another, posting detailed product reviews, writing how-to guides on blogs, and answering questions via message boards. Also, as the research study found, Millennials commonly crowd-source opinions from among their friends and followers on social media and networking websites about all manner of purchasing decisions, from which car to buy to where to go on vacation.
Among Millennials, anecdotal evidence is king. Social networks, rather than subject matter experts, typically serve as their most trusted sources for opinions. Millennials will take into account the opinions of people they have never met personally, particularly in the case of online product reviews at retailer websites.
Marketers should understand these behaviors because it demonstrates the importance of ensuring a positive brand experience among Millennials. One negative review can propagate like a wave throughout network after network. Even one “I know someone who” horror story alongside many glowing reviews can be enough to sway a Millennial’s decision against a particular brand.
All things being equal, Millennials would be more likely to avoid the risk of having a similar bad experience, based solely on the review.
In the survey, Millennials also displayed strong tendencies toward frugality, which makes sense, given their likelihood to spend a significant amount of time searching for reviews and asking for opinions in order to get the best deal. And much to the dismay of many retailers, Millennials often use smartphones to compare prices and read product reviews right in the store, sometimes even purchasing the product online instead.
Here’s a nugget for financial services providers. Research cited by the authors looked at product categories where many Millennials won’t make a choice without user-generated content. Among the top five categories cited is deciding what credit card to choose—29% of the sample want user input on this key financial decision.
The New Rules
Brand marketing has evolved into a two-way conversation between companies and consumers. It can no longer be controlled completely by the marketers.
Previously, closed-door focus group sessions were the go-to method among marketers to gauge consumer sentiment. Now they can quickly gather thousands of opinions through social media and other participatory strategies.
Millennials expect that companies will want their opinions, even during the early stages of product development.
Fromm and Garton identify several important rules for marketing to Millennials, including engaging early adopters of new technologies and emerging social trends and building a listening and participation strategy that incorporates a two-way dialogue with Millennial consumers.
They also note the importance of making Millennials “look good” among their peers and retaining their loyalty by giving them no reason to switch brands.
Finally, the authors stress that in order to engage Millennials companies’ marketing strategies should incorporate a sense of adventure and fun.
Marketers should play into Millennials’ desire for novel experiences, new information, and sound advice. Strong content is more important than strong design and text when attracting and retaining Millennials’ attention.
It is also important to “listen” to what your customers have to say, using social media, because it is expected by Millennials and it brings good results for the brand.
Marketers have an unprecedented opportunity to inspire brand loyalty with a rapid response and personal attention via social media and other web-based outlets. Responding quickly to a complaint can convert that customer into a brand advocate for life.
Millennials want to feel that companies care about their thoughts and experiences. And they also want to help the brands that they like or that have helped them.
For example, Millennials crowd-source so many purchasing decisions, that a customer will relate the story of their positive experience with the brand to their friends and followers, who may then pass the story along to their own networks. This low-cost communications strategy can generate free word-of-mouth advertising and a priceless personal endorsement for years to come.
A generation that no brand can afford to ignore
The book contains numerous case studies from a variety of companies, both long-established businesses and startups, to illustrate how brands are using these strategies to effectively connect with their Millennial target audience.
As the authors demonstrate, many tried-and-true marketing methodologies are ineffective at reaching the newest and most influential group of American consumers, and new technology has opened up many new ways for brands to connect with their target audiences.
Marketers at companies large and small are using participation strategies and specific knowledge of Millennials’ purchasing motivations and behaviors to adapt to these changes. Brands that are not yet doing so should adjust their strategies quickly.
The study uncovered many of the best methods for engaging the Millennial generation, and this book provides a helpful summary and explanation of the findings that will help any brand to increase their influence on Millennials.
- Study Links Credit Card Offer to Bank Choice
- What Banks Can Learn From the United Capital Acquisition
- What the Win-Win Partnership Between Apple and Goldman Sachs Means for Payments
- Are Point-of-Sale Loans Putting Pressure on Credit Cards?
- Message to Small Banks: Join the Digital Revolution or Become Obsolete