Who is responsible for your difficult to reach customers?
Millennials present businesses with a very challenging conundrum. They don’t seem to want to own cars, drink beer, buy houses, use fabric softener, or even start the day with a simple bowl of cereal. The products and services that have enticed buyers over the years are slowly losing their grip, which is especially problematic for the established firms that have profited from these ‘safe’ sales. It isn’t just legacy companies that are facing rejection from younger demographics, either – millennials are a thorn in the side of pretty much every business. So, why are millennials rejecting traditional products, and how should companies respond?
The hardest task for marketers today appears to be persuading millennials, also known as Generation Y, to engage with brands. It’s famously reported to be five times harder to reach consumers aged between 15 and 35 than any other group. There are a number of factors that explain why this may be the case. Firstly, those in their mid teens to mid thirties grew up during a period of financial instability. A wary, recession mentality could account for their reluctance to commit to contracts, trust companies, and invest money. This is especially apparent in the financial industry, where traditional banks are competing with popular FinTech startups. Unlike previous generations, millennials don’t conform to established life cycles. Instead of settling down, they want to remain independent. Companies across the board have been unsettled by these transforming preferences. The result of this is the categorisation of younger consumers as problematic, isolating them from the wider consumer market. In turn, this has made them easier to blame if marketing campaigns are unsuccessful. So instead of admitting that a campaign didn’t work, executives can uphold that millennials failed to engage. Of course, there’s a serious problem with this mentality. As millennials make up a considerable proportion of the global market, businesses that take this approach are turning their own consumers against them.
How can businesses survive Generation Y?
Millennials in theory come from an insecure economic background. It’s suggested that they don’t trust brands, don’t like lengthy contracts and don’t want to be tied up in red tape. From a business perspective, this necessitates a new way of thinking about consumer markets. As Generation X dies out, companies have one of two choices – disruption or destruction. Millennials will engage with brands when they begin to offer products and services that resonate with them – this is already happening within FinTech, PropTech and the transportation industry. In future, we can expect to see businesses disrupt their strategies to respond to millennial preferences, willingly or not. The as a service model will continue to expand, and instead of pigeon holing customers into lengthy, convoluted contracts, companies will realise the merit of open, no strings attached platforms. Digitalisation will remain a dominating trend. Another effect of changing consumer needs could be the distinction between necessary and unnecessary products. Many items like fabric softener and table napkins represent fading class aspirations. Younger generations just don’t feel the need to spend money on these ‘little luxuries’. Of course, businesses need to make sure that they don’t alienate other demographics within their market.
Millennials have been presented as the scourge of companies from banks to TV networks, and although this may be true it’s up to businesses to respond. Instead of playing a blame game, they should take responsibility for the failure of their products and services and head back to the drawing board. This includes the application of data analysis and machine learning techniques to work out exactly what it is that younger demographics want. In short, as markets evolve and change, so must marketing strategies. Perhaps it’s not Generation Y that’s the problem, but rather the attitude of companies towards consumers that don’t fit existing patterns.
Have businesses blamed millennials for their own shortcomings? Can companies connect with Generation Y without alienating other generations? Apart from finance, which sectors are clearly displaying the influence of millennial preferences? Share your thoughts and experiences.