Connected: Tap into the Millennial Generation

Date: November 14, 2014

Millennials' purchasing power is growing. Here's how your business can entice this tech-savvy and inquisitive generation.

Jessie Boucher and her husband run a 14-employee gourmet food delivery service, Jessie et Laurent, in San Rafael,
California. Like most small business owners, Boucher is well
aware that her marketing efforts must appeal to many different demographics.

Key among those demographics is the hip, younger crowd.
“One of my strongest demographics is the millennial generation,” says Boucher, who’s located in trendy Marin County,
just north of San Francisco. “I need to speak to them in ways
that matter to them specifically.”

Boucher recognizes a key characteristic of this slice of
younger humanity: Among many distinctive traits, they tend
to be socially conscious and appreciate businesses that are too.

Jessie et Laurent has a “Giving Back” program, supporting
such charitable endeavors as Project Amigo, which provides
medical care, housing and nutritional services to a small
Mexican village; the Angel Island Conservancy, which
preserves and restores natural resources on an island in San
Francisco Bay; and Food Rescue, providing leftover food
produced in licensed commercial kitchens for distribution to the hungry. Jessie et Laurent has also become a green-certified company.

“All of these efforts resonate with millennials, and I’m not
embarrassed by that,” Boucher says.

The millennial generation’s social consciousness is just one element that small business owners need to be aware of. Sometimes called Generation Y, and generally defined as being between the ages of 18 and 34, millennials are just
reaching maturity and are entering an acquisitive phase of
their lives. Yet they sometimes seem resistant to traditional
marketing messages and methods, which can pose challenges
to small businesses targeting that critical audience.

“Millennials present a very interesting mix of brand
loyalty, yes, but they’re also willing to change their loyalties
on the fly,” says Jason Kiselstein, account supervisor with
advertising agency KERN, an Omnicom agency. Kiselstein,
himself just 31, says brand loyalty is important to his fellow
millennials, but they gain this loyalty in unique ways.

“In my experience, I don’t see millennials making product
decisions on a whim,” he says. “We’re more prone to
researching things thoroughly but quickly. An idea may come
up, and we’re on the phone or Internet researching it and
finding more options.”

This is different than previous generations, who may be
more likely to accept marketing messages at face value, or
simply ask the advice of friends or colleagues, Kiselstein says. 

Social Butterflies

Social media is, as expected, a big factor in the
way millennials screen for product and service recommendations. It’s an important marketing channel for
small businesses to consider. But simply sharing a product
photo on Facebook along with some marketing text is not
effective with this group, because this demographic resists
direct advertising pitches.

Rather, millennials favor secondary sources, such as
bloggers, reviewers, celebrities and other influencers whose
opinions they value and trust. These influencers in turn—
through their blogging, reviews and general advice to
followers—will influence buying decisions, says Lisa Parkin,
a young adult book blogger and president of Social Climber,
a social media consultancy.

“Send your product out to bloggers in your industry, and
ask them to talk candidly about it to their readers,” Parkin
says. “Yes, there is a chance the blogger might say something
less than flattering, but this more-subtle marketing effort is
perceived as more honest and believable to millennials.”

Brave New World

If this sounds like a new landscape and a new type of
consumer, it is, says Claire Schooley, principal analyst with
Forrester Research.

“Millennials have grown up in a different world than older
generations,” Schooley says. “They’ve seen their parents work
for years in companies and suddenly lose their jobs as the market got tighter. Their new attitude is, ‘I have to watch out
for myself.’”

This has resulted in a somewhat skeptical attitude
toward accepting marketing messages, she says. “They don’t
necessarily immediately believe the message a company
might be sending,” Schooley says. “That’s why online
discussions with colleagues and peers are so important.”

But it’s not as simple as that. An eMarketer survey
conducted in December 2013 compared the online research
habits of millennials with Gen Xers (born between 1965 and
1980), baby boomers (born between 1946 and 1964) and
seniors older than that. The findings: A lot depends on the
type of product and who’s doing the research. 

The study found:

  • Millennials are far ahead of all age groups on average when going online to research electronics (58 percent versus
    50.7 percent of all age groups) and apparel (37.3 percent
    versus 28 percent).
  • Millennials are about as comfortable as all others in
    researching appliances online (29.4 percent versus 25.7
    percent) and groceries (18.6 percent versus 15.9 percent).
  • Millennials are behind older age groups who use the
    Internet to shop for home improvement items (14.8
    percent versus 17.2 percent) and medicine (12.6 percent
    versus 13.7 percent). 

The implication: Depending on the type of business
you’re in, you can confidently invest in digital channels even
if your target audience isn’t millennials. These include social
media, review sites, display ads and search. Just make sure to
address the particular needs of the age category you’re targeting: If you’re aiming for millennials, stress positive reviews
and make sure influential bloggers weigh in on your products. For boomers, articles or case studies about others in
their age category may be most effective.

Always On

This resonates resonates with Garry Graham, owner of the 19
Broadway Bar & Night Club in Fairfax, California,
whose nightly musical acts cater to the very youngest of millennials all the way up to boomers and seniors, depending on
the day of the week.

He works to market to all these segments, but he also
recognizes that millennials are his prime audience—he runs
a bar and nightclub, after all. He says this generation’s experience of always-on, anywhere messaging presents a powerful
opportunity to reach this younger crowd.

“We have a new team now to help us get up on Google
and the review site Yelp,” Graham says. “We market through
Facebook, Twitter and have our own blogs.”

Graham says he’s using text messages to reach them. “All
these millennials seem to be texting today,” he says. “The
beauty here is you can text a message like, ‘Show up tonight
and bring some friends.’ And bang! They’re here!”

Chris Belew, CEO of mobile app development company
Apptive, says text push notifications can be a powerful outreach to millennials because many of them are using mobile
devices to shop. Unlike regular text blasts, push notifications
go only to those customers or prospects who have downloaded a business’ mobile app.

“Push notifications tend to perform dramatically better than emails in terms of engagement,” Belew says. “The
average click-through rate of mobile text push notifications
sent on behalf of Apptive customers was 19.5 percent during
August 2014.”

By contrast, the average click rate for email campaigns is
from 2 to 4 percent, depending on the industry, according to
email service provider MailChimp.

For about $10 a month, a business can have a customized
mobile app created for its customers to download, which
includes push notifications to those customers, Belew says.

But if you’re on a very tight budget, Yelp is a good place to
start interacting with young people, says KERN’s Kiselstein.
Most Yelp services—such as tracking and responding to
reviews, listing business hours and uploading photos of your
business and products—are free for businesses.

Kiselstein advises making sure your business’ Yelp site is
up-to-date with a complete company profile and photos. He
also recommends providing coupons, special offers, happy
hour specials or whatever other inducements are appropriate to the business. Respond to all reviews, even the negative
ones, and take advantage of Yelp’s metrics to understand your
potential customers, he says.

“You’ve got to make sure your product is high quality,” he
says. “All this goes hand in hand with good Yelp reviews. A
million poor reviews won’t help.” 

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