Arguably one of the most used (probably overused) words in a marketer's vocabulary has to be "millennial", a term that represents society's young adults and is often associated with words like "tech-savvy," "self-absorbed," and "free spirited." And while these adjectives may apply to some members of this group, one could easily argue that other generations possess these same qualities - after all, I'm sure most of us could think of several baby boomers that not only own the latest tech, but are well-versed in its features.
It certainly begs the question of how different Millennials are from their parents and grandparents, and there's been no shortage of research to try and find out.
From understanding their purchasing habits to how brand loyal they are, many companies have hired consulting firms just to try and figure out this group.
But why are marketers so captivated by the millennial generation? And is this fixation on them worth it?
The Importance of Millennials to Brands
In the U.S. alone there are about 80 million millennials, making them larger than any other demographic in the country. There are also more Millennials in the workforce than other generations, with an expected $1.4 trillion in disposable income by the year 2020.
There hasn't been such a fixation on marketing to a specific generation since the baby boomers, and so many consumers outside of this demographic are left wondering why they're being ignored. Older generations are currently in their prime when it comes to spending ability, so why is their money not seen as valuable as Millennials'?
It's all about the long-term potential.
While many Millennials haven't hit their peak purchasing power due to student loans and starting a family, they are certainly heading that way, and brands realize the importance of getting in front of them early. But marketers should take care in making sure that they aren't alienating other groups of consumers in the process.
Focusing too much on a mobile-first mentality, over-appealing to Millennials' tech-driven nature, and straying completely away from traditional marketing mediums could indicate that you are solely focused on targeting younger generations, which might make perceived outsiders rethink their brand loyalty.
It's also important to remember that Millennials have grown up surrounded by advertising anywhere and everywhere they go, so they're not going to be easily fooled by marketing messages. They know how important their demographic is to company sales, and they aren't going to play into advertising schemes or games unless they have some real substance.
In fact, they'll likely get a bad taste in their mouth and seek out an alternative option.
Understanding This Diverse Generation
At the surface, it's easy to think that the Millennial generation can be generalized into simple categories. They don't go anywhere without their smart phones, they're obsessed with social platforms like Snapchat and Instagram, and they're more open-minded when it comes to social issues like climate change. So why are brands spending valuable marketing dollars to study their psychographics and behaviors so meticulously?
It's because the "Millennial way" of thinking varies quite significantly from traditional corporate views. A Millennial's mindset is typically considered to be decentralized, meaning they don't automatically follow societal norms and instead conduct research to develop their own opinions. Corporate structures, on the other hand, generally lend themselves to a more centralized view - one that's less personalized and focuses on a mass-market approach.
Marketing is certainly beginning to adopt more of a personal, engaging stance, especially with the prominence of social media in most company marketing strategies. But while a brand might do a great job of interacting with its social media followers or email subscribers, do consumers feel that personalization once they get down to purchasing a particular product or service? Generally not.
With the wide range of options available to consumers and a strong awareness of pushy marketing tactics, the challenge is on to cut through the clutter in a non-interruptive way.
This is why mediums like social media and less traditional marketing efforts are now playing such a strong role. You have to find a healthy balance between brand awareness and product promotion to ensure Millennials don't feel manipulated and are encouraged to take action.
Long-Term Brand Loyalty
The most significant benefit to attracting a Millennial audience is their potential long-term value to a brand. However, a common misconception is that they aren't brand loyal because there are always new and improved products entering the market.
In reality, 1 in 5 Millennials say that they would willingly choose the same brand as their parents, just for different reasons (e.g. social media, mobile presence). So maybe this group isn't as disloyal as marketers think.
It's easy to focus so much on grabbing attention that you forget about the fact that you want these individuals to keep coming back to your brand. Price is certainly an important factor to Millennials, with 56% switching brands because of price or a change in their financial situation.
Another factor that impacts brand loyalty is how modern a brand is perceived to be. Companies that don't have a mobile-friendly website, don't utilize social media, or focus too much on product promotion could be perceived as outdated and undesirable to this generation. And Millennials place a strong emphasis on brands that "get them."
When it comes to reasons why they might switch brands, the availability of something new and peer recommendations are the biggest influencers. So while it's true that Millennials are always looking to check out the latest and greatest, they're still influenced by more traditional marketing, like recommendations and word of mouth. To best capitalize on this group both now and down the line, it's important to listen and respond to them like you would any other generation. Listening to customer questions, feedback, and complaints is essential to creating and maintaining a positive reputation with consumers.
At the end of the day, the authentic brand will be the successful one.
Not Everyone is Convinced
Even though it seems like most brands have jumped on the Millennial bandwagon, some are holding out - there's still some skepticism as to why marketers are focusing so heavily on this group and seemingly forgetting about the others. And rightfully so.
The baby boomer generation currently possesses 80% of the developed world's wealth, so why would you want to ignore them? Even if they don't have as much long-term value as Millennials, there's money in their pockets right now that they are looking to spend. Brands should never focus their marketing on just one generation unless their products and services are only applicable to that group.
For instance, while a selfie stick manufacturer probably won't be making a lot of sales to baby boomers, Apple is selling iPads to a wide range of consumers.
It's also hard to figure out the best way to target the Millennial generation because there is so much diversity among them. Millennials pushing 30 years old don't typically have the same purchasing power or interests as those who are just entering college, even though they fall into the same generation. On one hand, recent graduates might have more disposable income because they're entering full-time jobs for the first time in their lives, while others may be paying back loans and starting a family.
You can't make simple generalizations for this group - or any demographic for that matter.
How Should Marketers Manage Millennials?
There's no arguing that the Millennial generation possesses a lot of potential purchasing power and brand loyalty, so it's important to develop a marketing strategy to cater to their highly digital nature. However, it's also important to never alienate customers to target a specific demographic, so campaigns should include a variety of elements to appeal to all of these groups.
No matter what, there will always be brands trying to capitalize on the "it" generation of the moment. Right now, it's Millennials as they enter adulthood and their peak spending years. In a decade, Generation Z will likely become the focal point as Millennials become older and more established. It's a cycle that will repeat itself over and over again.
And, ultimately, it's the brands that can find a way to cater to each of these groups simultaneously that will see the most brand loyalty and long-term success.