In the September issue of Market Leader, a group of Millennials explained why they were often described as 'the disruptive generation'. In this article, Caroline Hayter and Alex Dewdney examine what this generation are like as consumers – and how best to market to them.
Millennials are not a new topic to marketers, but their impact is finally making its way far beyond the first question that marketers ask, which is: 'How to market to them?'
There are more than 1.8 billion Millennials in the world – that's the largest generation that has ever existed and latest figures quote that they account for 25% of the population. But it's not just their sheer volume that demands our attention. It's also the scale to which we need to adapt for them. Millennials are no longer simply an audience; they're agents for change.
During our work with Millennials, Acacia Avenue has identified seven key insights that reveal how brands should behave in order to connect with this generation more deeply, and what businesses must learn from them to grow more effectively.
1. Connect, don't sell
A direct link can be drawn between Millennials' influence on brands and business models, and the environment in which they've grown up. Born into a society of financial growth, but coming of age amid the instability of the financial crisis and its aftermath, they have inherited a hefty debt from their predecessors and feel little support from government bodies, reflected in high student fees and house prices. Inevitably, this has consequences – being exposed to an environment where debt is paramount, they are more rational when it comes to money, in contrast to the impulsive spenders of their parents' generation. For them, money is most relevant when couched in terms of moderation, rather than excess. Traditional marketing thinking says that selling to the lowest hanging fruit is to get existing customers to buy more or buy more often. But brands that try to 'sell' rather than 'connect' or offer something useful will instantly lose credibility. This is part of the reason why financial institutions are being shunned by this group – they don't want their bank to sell them a credit card any more than they want their holiday company to sell them insurance. But if you're offering the opportunity to get something free, as Prudential health insurance does with its two-for-one weekly cinema tickets, or to get the latest music, reviews and interviews, as provided by Red Bull's dedicated online music hub, then it's quite another story.
2. Focus on personal values, not badge value
Millennials have entered the workplace at a time of unprecedented connectivity and, more than any generation before them, have an awareness of what the world has to offer. Technology is a key enabler. A US blog, The Blaze, recently quoted a study claiming that 53% of young people would trade their sense of smell for technology. This is the Millennial paradox: they have a hunger for success driven by exposure, but the reality of their situation means they are less likely than ever to achieve it.
The result is that they are taking their future into their own hands – 'back yourself' is their mantra. They have less faith in the world around them and more in themselves. Previous conventional routes through life are dismissed and goals have become more inner-driven. Millennials are more entrepreneurial in their outlook – gone are the five-year plan and the career for life. As Harriot Pleydell-Bouverie, founder of gourmet marshmallow company Mallow and Marsh, recently told us: "I don't even plan five days in advance."
Planning is a constraint and the biggest freedom is the ability to be flexible. This means being open to ideas, new paths and serendipity.
Slashie culture is the result of this, with many people holding multiple jobs in parallel to keep things interesting and to see where opportunity presents itself. As marketers, we inherently know that creativity occurs when there is space – physical and mental – but yet we also subscribe to processes and triedand- tested formulae for new ideas, which don't always get us to where we need to be. Millennials are not weighed down by this convention and the sheer number of new Millennial startups is testament to this. As one Millennial we recently spoke to put it: "A modern-day career person from our kind of generation is a bit more agile. We don't need to put all our eggs in one basket because that basket can get turned over very easily. You should be following different options… be more entrepreneurial with how you work and react to opportunities."
Alongside this perspective on work and money comes a deeper, more fundamental shift in terms of goals and motivations. Having to trust in themselves quickly mutates into getting satisfaction from inner rewards more than outer ones. As one of our research participants reflected: "I think so much of your happiness is derived from your outlook, your perspective, how you see things, and that's so inwards."
As a result, Millennials tend to elevate the role of personal values in the employers they are prepared to work for, and the brands they are prepared to transact with. So brands that act with humanity and a conscience, such as Unilever, which has put sustainability at the heart of its corporate strategy, will flourish in this environment.
3. Product first, brand second
Millennials are highly resistant to traditional marketing. They're not impressed by the mystique of brands and quickly see through the veneer. In a recent project where we asked Millennials and the older generations to talk about their favourite brands, we saw a striking difference in language and tone. Where Gen Xers appreciated brands for characteristics such as 'personality', 'leadership' and 'innovation', Millennials cast their votes for utility. This isn't so much a case of Millennials discarding established brands for newer ones. In some cases, they were talking about the same brands – such as Apple, Virgin and Barclays – but for entirely different reasons. It's clear that for Millennials, utilitarianism is in vogue and traditional brand image building is distinctly out of fashion – in today's world, it's product first, brand second.
It's certainly not a case of functionality trumping an emotional connection with a brand, but a clear shift in emphasis. As Guy Murphy of JWT says: "There is a shift occurring from adding intangible value to adding tangible value. Instead of adding emotion to function, brands are beginning to add function to function. We don't have to play out a brand as a metaphor any more, when we can do it for real. Brands will seem more valuable not just because they feel better but because they work better, or serve you better. This is not a denial of the emotional component of brands; it is just a different way of generating it. It is not about the power of associations; it is about the power of reality."
So emotional context is still relevant – we are all emotional beings, after all. Storytelling has a big role to play, and with this generation's hyper-connectivity a good story can really fly. The emphasis here is on a good story – it needs to be honest and authentic. Anything fake or forced will be sensed a mile off.
4. Make their lives easier
Juggling multiple jobs and being flexible takes its toll. In working with Millennials, we have been surprised to find out how permanently exhausted many of them are, from the moment they wake up in the morning. "We were born busy," as one of our research participants put it.
And busy-ness is a state of mind – it's not necessarily about physical busy-ness but the mental effort required to navigate through their day. They are looking for brands to make their lives and their choices easier and will quickly assess whether their 'effort' in engaging with something is worth the reward. Much of the time, it's not. The now famous Push for Pizza app in the US has recognised this. Founded by "five teenagers and one mature adult", the app enables pizza to arrive at your door within minutes of ordering through a simple, Uber-type process. Once initial sign-up is complete, they store your card details and pizza preference and deliver to you via GPS. The idea was conceived by the teenagers after a night out when they simply couldn't be bothered to pick up the phone for pizza.
The company launched with a homemade re-enactment of this moment, tapping into another keyMillennial trait, which is not taking oneself too seriously. Brands that can add lightness and humour are embraced as an antidote to the heavier issues that this generation has to contend with.
In this environment, it's no wonder that the notion of hacks has become mainstream. MIT hacker Phil Agre defines a hack as "an appropriate application of ingenuity" or a "creative practical joke" – in other words, finding clever shortcuts, mashing up old ideas to make new ones and emerging in a better place.
Millennials are the masters of hacking – from breakfast hacks such as eggs prepared in advance for the week, to tech hacks. Maybe brands should be thinking about hacking strategies. While this might be a risky proposition, the need to find a 'better way' has become a life quest. We can't afford to ignore it.
As Simon Eder, founder of youth agency Voxburner, succinctly puts it: "To be a successful youth brand, you must be able to do at least one of three things – make young people's lives easier, more fun or save them money."
5. Think about micro-targeting
It's rare that one hears a definition of Millennials that goes beyond their age range and it's worth taking a step back to think about this. This is a generation that is currently experiencing seismic life-stage changes – going to university, leaving home, co-habiting, marriage, and kids too. Their lives are in constant transition, which calls into question how we connect and talk to them. It's far more appropriate to be thinking of them in five-year segments than as one, especially as Big Data has now given us the tools with which to identify them more precisely.
6. Harness the power of upward mentoring
Many well-established brands now have inter-generational strategies, but these are usually top-down – for example, mortgage products whereby parents can back their children and help to get them on the property ladder. What is easily overlooked is the bottom-up intergenerational influence. Renowned for their boomerang tendencies, Millennials are often living in the parental home through their twenties and beyond.
Far from simply guiding their parents through technology innovations – which no one would say is a bad thing – they too have a hand in the cooking, cleaning and day-to-day household chores, which means they also have a role to play in household decisions, effectively further eroding established brands from the inside. Not such good news for those brands and another reason to 'think Millennial', even when they're not the core of the brand's user base.
7. Don't forget the business of business
The implications for business are even more broad-reaching. A Yale University study recently revealed that the lifespan of a company in the S&P 500 Index has decreased from 61 years in 1958 to just 18 years today… and the projections are that by 2027, 75% of the S&P 500 will be companies that we haven't even heard of yet.
The test and learn approach advocated by Eric Reis (The Lean Startup) and others has taken time to hit established marketing-driven businesses. We are now seeing the likes of Unilever recognising this, with its startup venture, The Foundry, and many others following suit. Agencies such as The Garage and The Bakery are tackling the challenge head-on. Others, such as SaatchInvest, are recognising the opportunity through funding initiatives. But the big question remains for the brands that define our culture today – can these businesses walk away from their embedded and proven methods and really embrace a more agile approach? Or will new businesses trump them in the race to connect with this cohort of the future?
Learning how to connect with this generation is not enough. We must learn how to be more like them – braver, more agile, more Millennial.
Marketing to Millennials
- Connect, don't sell
- Focus on personal values, not badge value
- Product first, brand second
- Make their lives easier
- Think about micro-targeting
- Harness the power of upward mentoring
- Don't forget the business of business
