By 2020, millennials will have a collective spending power of US$1.4 trillion in the U.S. alone. As a consumer powerhouse, they are vital to the sustainability and success of many brands, so it’s important to focus your marketing efforts and resist the temptation to employ tactics that worked on previous generations.
Who are millennials?
Millennials, as defined by Pew Research Centre, are individuals born between 1981 and 1996, currently ranging in age from 22 to 37 years old.
This group of people are the largest generation to date. To provide some context, there are 2 billion millennials worldwide; in the U.S. alone, they represent 1 in 3 of all adults.
Why should you care about millennials?
Millennials have reached what the banks call the most important age range for economic activity. Meaning this group of people are entering or established in the workplace, spending money not only on going out, but on starting families and buying homes.
This group is a consumer powerhouse. In the U.S., millennials’ purchasing power is estimated at US$200 billion, and Morgan Stanley estimates that India’s millennials will spend US$330 billion annually by 2020.
What do millennials value?
There are some key factors that appeal to millennials. Understanding these and adapting your marketing strategy can increase brand engagement and loyalty.
Here are five key insights on what millennials value:
- Millennials are purpose- and passion-driven consumers.
For your brand to resonate with this consumer group, you need to think about how your product or service aligns with their needs and desires. Local, original and trustworthy are all good in the millennial world. The ‘80s and ‘90s approach of one-size-fits-all mass marketing will not work. Tailor your approach and personalize marketing.
- They value unique experiences.
Millennials value experiences over physical things. They are likely to spend more and share their experience of your brand if the service or product you provide offers something unique.
- Ease of finding unique services or products.
The ability to find and connect with your brand (i.e. “discoverability”) should be treated as an extension of your total consumer experience. You must identify where your target consumers are most active online and seed your messaging there. Optimizing content for search engines and creating a consistent experience across your digital estate are essential. You must think mobile first—it’s where all the attention is these days.
- They want to be part of a community.
Incentivize participation and engagement around your brand from your followers and consumers. Purchasing behavior is massively influenced by referrals from friends and family; approximately 80 percent of consumers are likely to purchase if they receive a recommendation from a friend or family. By not engaging on social, you are losing out on this very important trend.
- They value innovation.
Millennials seek simple, fluid solutions that integrate easily with other elements of their life. For example, they want their bank account to easily talk to services like Uber and Deliveroo, so if they need a cab they can request one instantly and jump in a car without having to think about cash. Or, they want to eat their favorite meal without leaving the living room, and they want it within the hour. Integration and speed of delivery are key to attracting and retaining consumers.
How do you connect with millennials?
Millennials range from 22 to 37 years old. That is a wide age range; the needs and desires of 23-year-old are going to be different to that of a 33 -year-old, so how do you market to such a huge range of people?
The answer is you must segment further to create meaningful content that resonates.
To effectively communicate and influence we think about millennials in five micro segments:
- Boomerang millennials (22 to 25 years old)
This group is in a place where they have just finished university education and have had to move back in with their parents. They are likely to be crippled with debts from student loans and credit cards, or struggling due to the high cost of living. This segment is active in the gig and sharing economies.
- Millennial hustlers (26 to 30 years old)
This group has entered the workforce and working their way up the corporate ladder. They are multi-talented and can monetize multiple skills. Increasingly they are forgoing highly paid jobs to follow socially responsible ventures or start their own business.
- Millennial parents (31 to 34 years old)
There is a spike in millennials having their first child around this age bracket. As parents their needs and wants are going to be totally different than first two micro segments. Gender stereotypes are being broken with more fathers opting to stay at home and spend more time with their children. It’s important to note that mothers are likely to be bloggers and their own purchasing habits are highly influenced by bloggers on topics surrounding the welfare of their children and family at large. Moms are most active on Pinterest.
- Millennial fringe (35 to 38 years old)
The millennial fringe are those people who are on the fringes of both the millennial generation and Generation X. They usually have one or two children and are most likely to have purchased their first family home.
- Millennial at heart (38 to 41 years old)
Although I’d like to be in one of the segments above, I believe I am a millennial at heart. This is a group of people who are at the tail end of Generation X, but do not squarely make into the millennial bracket. This group has embraced the millennial lifestyle. They understand the importance of social media and online conversations and are open-minded in terms of new ways of purchasing products and communicating with friends and family. This consumer group is most active on Facebook, Twitter and LinkedIn.
Marketing tactics to influence millennials
Marketing to millennials is tough. So, how do you create a meaningful dialogue with—and influence—them?
- Think mobile first
Mobile is where the attention is. In the U.S. more people ages 18 to 24 now watch content on smartphones than on TV. Mobile devices are increasingly the first screens that people look at. Eighty percent of shoppers use a mobile phone in store to compare prices and read reviews.
- Social media strategy is a must
Whether you are a B2B or a B2C, silence on social media is no longer acceptable. Social media content is what TV was to Gen X and baby boomers. Fifty-five percent of millennials find out about products, sales and services through social media.
- Personalize your messaging
Millennials are not a homogeneous group. In the U.S., for example, they are the most ethnically diverse generation; 44 percent of millennials in the U.S. are non-white. You need to understand the niches and target your messaging accordingly. Advances in mobile and social make this possible, but the expectations around focused messaging have increased too. Mass-market messaging that worked for previous generations just won’t work anymore.
- Influencer marketing is a growing trend
Wikipedia defines influencer marketing as “a form of marketing in which focus is placed on influential people rather than the target market as a whole. It identifies the individuals that have influence over potential customers, and orients marketing activities around these influencers.”
Influencers, unlike celebrities, can be anyone—from a serial blogger on cyber-security to a fitness instructor on Instagram. The key is they have knowledge that results in hundreds of thousands, if not millions, of followers who trust their point of view.
- Foster online discussion and user-generated content
We know that referrals from friends or family are a strong driver for purchasing. Millennials contribute on average 70 percent of all user-generated content. With these two keys in fact you should incentivize consumers to create positive content tagging in your brand. Incentivization could include access to special product releases, events or discounts.
In conclusion, brands need to shift their thinking from a blanket one-size-fits-all marketing approach to one that considers the diversity and values of millennials. By targeting your messaging, focusing on appropriate digital channels, and creating a seamless user experience, you can maximize your chance of converting millennial consumers.