When it comes to millennials we are living in a world of contradictions and major brands are still attempting to figure out what makes these digital natives tick. Despite the rumors, millennials are not as narcissistic as we once believed. In fact, they are the most engaged generation and genuinely want to participate with your brand. More than that, they want to be invited into the creation process – creation of the product, journey and marketing. Do this and you will gain not only a loyal consumer partner, but also a brand advocate. The key to winning with this generation is to unlearn and throw away common stereotypes that are often associated with the millennial generation and embrace these five truths that could be the make or break point for your brand.
Truth 1: Millennials care deeply about their communities
It would be easy to consider the generation that coined the phrase “selfie” to be narcissistic. However, the truth of the matter is that millennials care deeply about the environment, the global community and social justice. They value deep personal connections with brands and will reward those who stand for more than their bottom line. Research from FutureCast shows that about 37 percent of the 4,259 millennials surveyed for the American Millennials Report are more likely to buy a product/service when their purchase supports a cause. Furthermore, about 45 percent of millennials (compared to just 27 percent of non-millennials) believe they can contribute to a cause they care about more easily through a company’s program than on their own. Not only is this exact opposite of narcissism, but it also creates opportunities for brands to act as Conscious Capitalists.
In 2013, Hanes promoted its philanthropic endeavors by creating the Hanes For Good campaign. For decades Hanes has been donating socks, one of the most needed articles of clothing and least donated pieces, to shelters around the country. During the holiday season last year, Hanes told people “we hope you get socks for Christmas.” The idea being that those who don’t get socks are the ones who need it the most. The campaign was a hit with millennials who appreciated the philanthropic gesture of the campaign rather than the push to make huge sales during the holiday season.
Truth 2: Millennials are smarter shoppers
Millennials were likely the most affected generation in 2008-09 during the Recession. Many of these young adults were just entering the workforce when the housing market collapsed and underemployment was as big a problem as unemployment. As a result, we are now seeing millennials approach brands with a stronger desire to learn more about what each brand can do for the shopper personally. This does not mean millennials are being cheap; instead they are smart about where to spend their hard earned dollars. This has lead to a new millennial inspired trade up/trade down mindset. Millennials are willing to pay the premium for things they care about from brands that matter but will buy private label when the purchase is not as important. Smart strategy professionals are embracing this mentality and creating private labels that are both high quality and affordable. For example, the Target Archer Farms brand has experienced success with savvy millennial shoppers.
Millennials are also putting more money into brands that can offer them more than just a product. For a millennial, getting the best bang for your buck does not necessarily mean paying the lowest price. It means receiving the most benefits at a fair price, which includes the ability to co-create the product and influence the customer journey as well as the marketing. This consumer partner and co-creator has led to a new definition of brand value – one that includes participative benefits at the same level as the traditional functional and emotional benefits.
Truth 3: Millennials are embracing new life stages
It is easy to still think about millennials as those pesky teenagers who reveled in being misunderstood. However, this could not be further from the truth. While it is true that the average age of marriage for a millennial is significantly higher than it was for boomers, millennials have not given up on the idea of settling down. Older millennials, those 24-35 years old, are not only getting married but they are also stepping into their new roles of mom and dad. Nearly one in four millennials are parents already and in the near future millennial women will give birth at a rate close to 10,000 per day. These new parents are taking their pragmatic views with them and expect brands to help them make their lives simpler, easier, better, faster and more meaningful.
Truth 4: Big purchases are not scaring off millennials
More often than not, marketers are convinced that the housing and auto industry are going to crumble as millennials refuse to step up to the plate and make a large scale purchase. Fortunately, this is not true. Research from the Next Generation Car Buyer Study conducted by Autotrader.com shows that forty two percent of millennials surveyed were planning on buying a car within the next year. Millennials typically make large purchase decisions based on a need. For example, a millennial who does not have a family and is living in the city may put off making an auto or home purchase because there is no intrinsic need to do so. However, Mr. Millennial Dad, his wife and three year old daughter have a very different story and the need for a car becomes much more persistent.
Truth 5: Millennials will be loyal if you give them something to be loyal to
When you begin dating someone new and they bring you chocolate on the first date, you are happy with such a thoughtful gesture. When you get chocolates on the second and third date, you appreciate the consistency. When the thirtieth date rolls around and you are still getting the same box of chocolate, the thoughtfulness has worn off. The same holds true when we talk about loyalty programs. The traditional punch card method, buy nine ice cream cones get the tenth one free, does not work with this on-the-go, fluid generation. If all you have to offer is a free ice cream cone, millennials will find a store that offers two free ice cream cones – and after only 7 purchases.
The key to building loyalty is a function of having linear benefits as well as surprise and delight benefits. Creating personalized surprise and delight benefits is even better.
Ultimately loyalty is about a variety of key factors but brands that are more authentic, more differentiated and create more meaning have a real edge. If your brand goes even further and embraces “Fairness” then you’ve got healthy potential.
In order to capture the attention, loyalty and love of these young adults the most successful brands are adapting to a more fluid engagement strategy – one that is centered on the concept of building energy for your brand. By adapting to this type of mindset, millennials will be more intrigued by your brand, more aligned with your brand meaning and have a stronger desire to share an experience with your brand.
Follow these truths, adopt this new way of thinking about millennial co-creator partnership and you have got yourself a formula for success.