Millennials: Marketing's Newest Challenge
Do you know which generation currently accounts for $1.3 trillion in direct annual spending? The answer might come as a surprise: it is neither the baby boomers nor the Gen Xers, but the Millennial Generation, whose population is currently in its late teens to early thirties. With different values than previous generations, as well as increased numbers, millennials represent a marked shift in spending power and consumer habits.
Recognizing these habits starts with understanding when and how this generation was raised. Millennials are a diverse group of individuals and can be split into two major age groups according to birth year. Older millennials born from 1985 to 1994 are part of Generation Y, while younger millennials born from 1995 to 2004 form Generation Z.
Living through an era filled with economic recessions, ongoing violence, and social change has shaped the mentality that millennials hold about life in general. Being raised with technology has also made them expertly accustomed to using numerous devices. In relation to making purchases, millennials are conscientiousness about saving money rather than spending it. They are informed consumers; not necessarily frugal, they seek affordable luxury and will buy what is personally important to them.
Status currency, defined as “the status and values that consumers wish to project through their purchasing decisions and brand affiliations,” is an intangible asset that millennials also prize. This generation is constantly looking for methods of self-expression, and the brands millennials favor are increasingly seen as an outlet for this— an extension of themselves, even.
Thus, what is known as the reciprocity principle becomes significant to millennials when evaluating brands. Basically, the relationship between the business and the customer must be a two-way street. The traditional linear framework of this relationship, with companies controlling and pushing the customer conversion process, is outdated, especially because there are factors in the marketing environment outside of company control.
A steady stream of one-size-fits-all brand messages delivered via traditional media is no longer cost-efficient or effective. Millennials shun direct marketing and appreciate multidirectional engagement, since they make emotional investments in and feel personal relationships with brands. There are five elements to the reciprocity principle that businesses should be aware of in order to market to millennials successfully: reach, relevance, reputation, relation, and referral.
Millennials are the most tech-savvy generation yet, and they are highly engaged with their devices. To adequately reach millennials, marketers must utilize all available media. Mobile and portable devices are what the majority of millennials prefer to use for connecting to the Internet, even while shopping. Besides public relations and endorsements, marketers need to take advantage of digital marketing and social media.
Not only distinct from prior generations, millennials are also an incredibly varied bunch within themselves. Some are already parents with families, while others still live at home. There are newly independent young adults and college students as well as dependent teenagers. The brand choices made by millennials are influenced by a wider array of people than before, so companies should focus on doing research to appropriately segment marketing groups, making sure their brand is as relevant and appealing to the targeted customer base as possible.
Because millennials identify with brands in a novel, emotional way, it is crucial that a brand’s reputation reinforce the same characteristics that millennials wish to see in others and project from themselves. A brand must cultivate a unique personality and stick with it, remaining genuine and authentic to its chosen image.
Millennials desire a mutual relation between brands and themselves. A two-way dialogue should always be maintained, since millennials want companies to listen to their comments and incorporate their input. They expect quick responses to their feedback and concerns in a personal and straightforward manner.
Companies should strive to build brand loyalty by referral. An ongoing relationship with customers should be developed through individual and online community communications, cause marketing, and advocacy programs. Millennials want to be persuaded to act as positive advocates of a brand.
The five elements of the reciprocity principle carry certain implications about the behavior and actions of millennials as consumers. The degree to which they use technology has led to a need to feel connected to family, friends, and strangers by sharing their experiences. Many millennials utilize social media to write product reviews online, post their own how-to product videos, or share photos of their recent product hauls. This is a far more extensive and personal engagement with brands than seen in previous generations.
A positive brand experience will usually result in a millennial taking to social media to promote the brand with favorable public action. A negative or disappointing experience, however, will give rise to the spread of criticism. Millennials value the opportunity to be vocal critics, and their opinions, whether justified or not, have the potential to go viral, causing either a boom or a bust for a brand.
This is due to millennials trusting the reviews and comments of friends, family, and strangers over the word of experts. For brand advice, they will even respond more to celebrity endorsements than traditional advertising. Millennials trust retailer websites, companies’ social media profiles, and digital ads more than previous generations.
They share and react to content, and millennials will be more likely to trust a brand if people they know are also using it. They enjoy “discovering” new brands and sharing them online, because they then become a source of brand information for others, which makes them feel even more connected.
Technological advances have also led to the concept of instant gratification, or the “we want what we want when we want” consumer mindset of millennials. This seeming sense of entitlement has more to do with an increasingly digitized and ever-connected world than it does with vanity and egocentrism. With such connectedness, millennials expect that brands will be easily accessible 24/7.
Furthermore, the proliferation of smartphone apps, online and mobile advertising, and in-store touch screen panels has transformed the millennial shopper. Instant gratification combined with multitasking across devices means that speed and ease of purchase is a top priority.
Given that millennials rely on recommendations and information from blogs, social networks, and company websites, it is imperative that businesses create fresh and interesting content as well as maintain a user-friendly, mobile-optimized website. Millennials view technology as more than a method of communication; it is a means to make life easier.
Additionally, millennials want to know that their purchases are contributing to the greater good. Social responsibility is central value for many millennials, and they will be less affected by a brand’s passion for a cause than by the difference that cause actually makes in people’s lives. Companies that “give back” resonate with millennials, who assess brands for actions that help the needy, prove social responsibility, pursue environmental stewardship, protect personal data, or otherwise indicate transparency and sincerity. In order for a millennial to choose a brand, it must add some sort of value to their lives.
The never-before-seen consumer habits of millennials necessitate that marketers formulate new strategies to tap into the spending potential of this demographic. Traditional media such as television, radio, catalogs, and newspapers are still being used too frequently, whereas more innovative digital domains are being left out. Both offline and online channels, including mobile devices like smartphones and tablets, must be utilized in order to reach millennials, and it should be determined which media channels are best suited to which segmented audience groups.
Businesses should set up millennial marketing plans, establishing goals that can clearly be measured as well as putting programs into place to achieve those goals efficiently. Value, relevancy, and authenticity is prized above all else for brands, since millennials want their intelligence respected and their minds inspired. Not being able to adequately reach this demographic will almost certainly result in a business’s failure within the coming years, but learning the tactics of millennial marketing now will ultimately prepare businesses for Generation Alpha, the next wave of consumers who have grown up with technology always at their fingertips.
Proprietary data structures and functionality developed efficiently allows for traversing your data quickly and efficiently.
User adoption is the most crucial aspect with implementing a new CRM in any business. Friendly and easy to use interfaces make this a breeze
Protecting your business data, clients’ personal information and securing your companies processes are paramount with surpassed industry standards