The ‘M’ Word
They’re the largest demographic group in Minnesota and on their way to becoming the biggest in economic buying power as well. That’s why it’s hard to read, watch or listen to anything about marketing without hearing about millennials, the group defined by marketers as roughly 15- to 30-year-olds.
According to the Pew Research Center, millennials account for 75 million of the U.S. population, with an estimated $170 billion in purchasing power, and in Minnesota make up 28 percent of the population , followed by baby boomers at 25 percent, gen Xers at 21 percent, the “greatest generation” (now in their 80s or older) at 12 percent, and the up-and- coming “digitals” (newborns through 15 years old) at 14 percent.
They’re a force to be reckoned with and marketed to, and as we’re always told, the old rules of engagement don’t apply. According to Forbes, millennials will account for one-third of all retail spending within five years and soon be nearly half of the U.S. workforce, so if you don’t know how to market to them, you’re in deep trouble—even deeper than the basements of their parents’ homes, where a high percentage of them reside. (According to Huffington Post, more than one in three millennials live with their parents—the highest number in four decades.)
Even though the numbers are huge, the incomes aren’t. Maybe that’s why so many of them are living with Mom and Dad.
Research conducted by the Wilder Foundation shows that in Minnesota among people ages 20 to 24, millennials earn 24 percent less than the same age group took home in 1980. Since millennials have fewer real dollars to spend, marketers are going to have to work harder to get this group to open their wallets up—and they are a skeptical cohort.
Having seen the mortgage meltdown turn what was once a secure investment into a dangerous liability, millennials are not eager to make a commitment to buying a home according to Zillow. Similarly, CBS MoneyWatch says millennials don’t trust banks and are averse to investment risk.
What they’re not averse to is self-regard. Sixty-eight percent of 18- to 34-year-olds agree that their peers’ social posts are at least “somewhat likely” to influence them to make a purchase, according to ShareThis data.
Forbes also found that millennials aren’t brand-loyal—because they don’t have to be. That is, unless your brand is unique and can make them feel, well, special. With access to information and research like never before, this is a curious, inquisitive group that wants it to be all about them. Traditional advertising campaigns and marketing tactics won’t cut it.
A feature in the New York Times Magazine called “That Should be a Word,” recently coined a term for millennials: “mespoke (adj., Tailored exactly to one’s lifestyle).” They went on to provide an example: “Dylan was a member of the mespoke generation: From his iPod playlist to his favorite shot of espresso at his neighborhood cafÃ©, he never had to experience anything that wasn’t his explicit choice.” And God forbid if he did; everybody in his social network would have heard about the horrible experience he had to go through.
When it comes to millennials, add another P to the traditional elements of marketing: product, price, place, promotion—and now phone (as in smartphone or mobile device). If your brand isn’t mobile and available at the touch of a screen, chances are that you’re not going to be very effective marketing to them.
According to USA Today, millennials were not exactly huge fans of local retail behemoth Target, but that’s all been changing in the past 12 months, as the retailer has made a big investment in mobile and digital initiatives. This past holiday season, Target’s mobile strategy included a standalone pharmacy app, iPads replacing clunky in-store kiosks and an easy two-step checkout process. And of course you can sign up to receive monthly text coupons. Time will tell if the strategy hits the bull’s-eye.
Based on all the client research we’ve done on millennials and the countless articles, workshops and other information that’s been generated about this group, here are guidelines for marketing to this economic power- house:
1. Make information available with the absolute minimum effort, and make the information simple and easy to share. If you’re not available by touching a screen in somebody’s pocket, you’re not in the consideration set.
2. Keep it real. This is the group that made popular two words in every marketer’s vocabulary: transparency and authenticity. They want to know about your product, how it was made, where it was made and that the people who made it were paid a fair wage. If you take shortcuts or try to hide non-flattering information, you will be found out and taken to task in social media.
3. Millennials don’t want to be talked to; they want to be invited to a conversation. Listen to them and respond thoughtfully.
4. Stand for something. This is a group that cares about causes, so find out about the causes they care about, and as long as they align with your brand values, support them.
5. Create a product showroom—not where they can go and actually purchase, but somewhere to have an experience with your brand and then decide after checking with their peers if they want to purchase (online).
6. Make it special. Red Bull Crashed Ice is a great example of an event created for millennials. It’s unique, and the experience is easily shareable via social media.
7. Make it customizable. Millennials want to be able to create something that’s uniquely them and for them, so the more choices, the better.
8. Employers, don’t forget that you’re marketing to millennial employees every day, so make sure you’ve got plenty of room for advancement, frequent feedback and forums for input, lots of personal and professional development opportunities, regular salary increases or spontaneous bonuses, a fun work environment—and all with solid work-life balance. Easy, huh?
If all this seems like a tall order, you can go back and find that marketers faced similar questions, albeit different variables, when confronting gen X and the boomers that came before them. That’s what keeps it interesting.
Glenn Karwoski (firstname.lastname@example.org) is founder and managing director of Karwoski & Courage, a marketing communications agency. He also teaches in the graduate school at the Opus College of Business at the University of St. Thomas.