Story Collaborative recently completed a series of focus groups comprised of millennials (ages 18-35) with the help of one of Honestly Magazine and Workforce & Community Education at Germanna Community College. The insights these millennials provided into their habits, preferences and challenges offer important clues to businesses that want to sustain and grow their brand. This is one article in a series of insights into business growth among millennials.
Sometimes change pushes us, and other times we run ahead. As millennials become the dominant generation, not only in size but influence, they are creating transformation at many levels. Organizations and businesses that don’t adapt to these changes face important risks. Understanding the risks and taking the right kinds of actions can move your business from a risk status to a new opportunity profile.
Risk #1: Opportunity Loss – Missing the chance to grow
Opportunity loss is the first risk business face. There are 80 million millennials in America alone. Their current buying power is estimated to range from $200 billion to over a trillion dollars a year. Their emerging influence presents growth opportunities for many businesses – but only if they are prepared. When millennials are actively connected to a brand, they become very loyal.
Serving millennials gives businesses a fantastic opportunity to innovate and invigorate their brand with new products and services. If the business gets it right, it can become ingrained in the buying habits of this new generation.
A great example is found in the financial services sector. Currently 76% of the more affluent millennials are trying financial products from non-financial providers. Existing community financial providers, like credit unions and mortgage brokers, are faced with a significant opportunity loss if they fail to innovate. The first step in this process is a decision to identify, budget and create a strategy for change.
Risk #2: Brand Inoculation- Long term disconnect
The second risk for business is a failure to engage millennials, which could create a long-term disconnect difficult to overcome. A poorly developed brand, or a low quality digital experience, can result in millennial consumers who never engage with or “catch” your brand at all. When this occurs, millennials remember their first negative experience with a brand, share that with friends, and never take a second look.
Several comments from our focus groups show why. When reviewing some brand materials, the comments were dramatic.
One participant said if she saw that brand, “I would know that this website is not for me.” Another said, “I would leave this website and never come back.”
Poor branding or low quality digital customer experience is like a brand inoculation – millennials will be immune from engaging with that brand, no matter how much advertising is used to try to bring them back.
Businesses that face this risk include those that simply have a “flat” brand in which nothing stands out, as well as those who have brand graphics and websites that appear dated or poorly developed. The experience that people have on their mobile device with your brand is one key area in which this risk is commonly found.
Risk #3: Brand Destroyers – Diminishing your business
The third business risk, active disengagement, is sobering. Active disengagement means that instead of consumers remaining neutral and ignoring the business, they become an active negative voice.
Gallup says it this way,
“Instead of creating advocates and ‘brand ambassadors’ among millennials, many companies are creating brand destroyers who have a host of digital soapboxes from which to air their grievances.”
The power of online social network soapboxes like Reddit, Yelp, and even Facebook, give actively disengaged millennials an outlet to have a negative influence on any business, once they become actively disengaged. And they can be powerful as they share these negative ideas in their social network.
“I ask my friends and social network before I ever make a big purchase, and some small ones too. Their opinion matters more to me than anything the company says.”
Moving from Risk to Opportunity
Evaluate your current and future customer pool. This is an important first step for most organizations. One of the factors that has stopped many businesses from making changes can be well founded – they don’t believe that millennials are an important segment of their customer audience. That’s a high risk conclusion given the size of this generation and their dominance in the workforce.
Some of the news about millennials has suggested that they might not be an important market segment. The fact that millennials have been slow to move out of their parents homes can give us the idea that they aren’t good targets for real estate, home goods, large scale appliances and other related goods and services.
It’s important to ask what portion of your current and future audience are millennials. For example, the real facts about home buying and all the related goods and services tells a different story.
35% of buyers in 2015 were millennials; up from 32% in 2014; and their median age was 30 according to NAR. Generation X, those aged 36 to 50, made up 26% of buyers, the second-largest group, and had a median age of 42. This is a buying shift from urban to suburban locations.
Since nearly half the workforce will be millennials by 2020, this is a consumer group that every business needs to understand.
Ask Millennials for Feedback.
Ask millennials about everything related to your brand and at every stage of their interaction with you. How do they find you and what do they think about your marketing and brand? What is their impression of the goods, services, and the customer service you offer? This kind of feedback is valuable whether it comes through customer or employee interaction or by watching conversations on social networks or rating sites. Low cost brand monitoring, such as that provided by Lamppost.social can be helpful in watching for both positive and negative feedback.
Take Small Incremental Steps.
Since big change can be hard to budget or manage, a series of smaller changes that are intentionally planned can allow you to begin making progress toward a better digital experience right away.
A couple of suggested first steps:
1. Create a customer journey map that shows exactly how and where millennials first hear about your brand, explore it, purchase, and then receive service. Ask millennials or others who have experience with this market to rate how you are doing. Tackle the easiest fix first while you make plans to create change in more difficult areas.
Millennials told us that they don’t see traditional ads appearing in newspapers, broadcast television or radio – a customer journey map tells you where they will find you.
2. Review what your competitors are doing to connect with millennials. Look for methods that are a good fit for your brand and adapt them.
3. Intentionally connect with your best millennial customers and ask them for advice. You’d be surprised how much you can learn by simply asking – we learned a great deal from our focus groups.