“How many of you are marketing to millennials right now?” the moderator asked the audience at the “Getting Gen Y to Buy” presentation by Sarah Sladek, CEO of XYZ University (photo, below), at NAILBA 34 in Orlando, Florida. There were about 50 to 60 people in the room at the time and only four, which he counted out loud, raised their hands.
While this isn’t necessarily surprising, the fact that advisors and marketers aren’t focusing on this generation — which, as of this year, has a buying power of $600 billion, according to Sladek — is worrying. As soon as she hit the stage, Sladek played a video that captured three generations, from boomers through millennials.
She explained that, just like The Beatles, the hippie movement and other events in the mid-1960s marked the boomer generation, equally notable events marked the beginning of Generation X. These events include the founding of a 24-hour news channel and greater transparency about the real world, including knowledge that the government and companies were lying to the public. Gen X's anthem might just be the song "Twisted Sister," with the lyrics, “We’re not going to take it … anymore.”
The millennial generation, in turn, was born into a world where terrorism, violence at schools, the tech revolution, and finally, the financial crisis of 2008, have deeply shaped them. It's helpful to keep these events in mind when working with this youngest generation, a generation that is now taking over the workforce.
Sladek asked the audience how many actually lived through the events of the 1960s, and most of them raised their hands. “First thing I want you to do is to start thinking about the millennial mindset,” Sladek said.
She then asked everyone to partner up with the person next to them and take a selfie. “I can see that some of you have never taken a selfie before,” Sladek laughed with the audience. Other than engaging the audience in her presentation, the experiment was an exercise for the boomers and seniors attending to put themselves in millennials' shoes. It also proved the point that whatever the younger generations are doing trickles upward: The Pope, President Barack Obama and even the Royal Couple have taken selfies at some point or another. There are other examples of this: Rock and roll was born with the younger generations, as were brands like Harley Davidson and, more recently, Facebook.
“The lesson is: Pay attention to what the youngest generations are doing. What are their needs and values? Because, whatever it is that they are doing, it’s going to trickle up and change your businesses and methodologies,” Sladek added.
She referenced a Time magazine cover that said that millennials are the most self-absorbed generation. “When the boomers came of age, they were criticized for being hippies, Gen X were slackers, and now millennials are being criticized for being narcissists,” Sladek explained. She showed a long list of things that people call millennials, including "lazy" and "entitled."
Sladek also gave some examples of how marketing has changed from the past to reflect the current culture: from the black and white print ads of the 1950s to more colorful ads of 1960s to an ad featuring a woman to examples of the Aflac duck and the Geico gecko that are targeting millennials in a fun, unconventional way.
“And wait until you see what’s to come. If you’re struggling to get Gen Y to buy, you’re really going to struggle to get Gen Z (to buy) – they all just turned 19 this year, are entering college and starting their careers,” Sladek cautioned. If millennials, or Gen Y, are “digital natives” who say that they can’t live without technology just like they can’t live without oxygen, Gen Z has only known tech as mobile. “They gravitate to social media because it’s image-based. In fact, there are studies that say that their brain development is different. They can recall information better through photos and videos,” the CEO explained. To prove her point, she presented a photo of what a seven-year-old boy, the son of a colleague, recently wrote at school as a reply to the question: Describe yourself in three sentences.
The kid wrote: “I can poop. I can pee. I have an iPhone.”
But, what makes Gen Y buy? Here are four trends to watch:
1. They are “recessionistas” – “Look fabule$$”
Sladek presented a chart from Business Insider that showed how cost of living has changed in recent years. The chart showed that college tuition has gone up 757 percent in the last decade. Because the cost of living, and tuition, have gone up, millennials value access to assets (products, services and information) via technology more than other generations do. This is why we’ve seen a boom in the “sharing economy.” The idea behind this is that you don’t need to buy something; you can borrow it, accessing it via technology. “If you can’t afford it, you share it,” Sladek explained.
So, millennials are “recessionistas,” but this doesn't mean that they won’t spend money. They will spend their hard-earned dollars where they see a return on investment or quality. Sladek then gave two examples: UGGS, which makes expensive, yet durable, winter footwear, and Beats by Dr. Dre, the headphones that cost upwards of $300.
The generational expert then invited everyone to ask themselves: How do you communicate quality and durability?
2. They are digital natives.
Everything online is available immediately, there’s a chance to customize everything (from experiences to products) and there’s instant gratification. The digital world is very fast and social, and your opinion matters. Reviews, on the other hand, present an opportunity for transparency, which then brings brands to want to convey trust, Sladek explained.
“Every time you look at your marketing, if we’re not building relationships, we have to fix it. But, many of us say that we will fix it, and it gets sent to the back burner. Every time you do that, you are losing market share and you are losing millennials,” she said. Millennials, she added, expect you to try to talk with them, to build relationships with them.
3. They crave connectivity.
“Every generation has something to learn, something to teach. Millennials are the most protected generation in history, with car seats, bike helmets … but they are migrating away from that bubble towards more adventure, travel, risk and fun. An example of that is Red Bull,” Sladek said.
She mentioned, maybe, because of helicopter parenting, millennials crave more connectivity and hate the idea of working isolated in silos. That’s why they want to connect with insurance and financial advisors online, as well as in person.
They are also motivated to become part of something bigger than themselves or be part of a greater cause. Enter the phrase “venture consumers,” where millennials will make purchasing decisions because they feel it’s a way of activism. This opens up the opportunity for the insurance industry to talk about its outcomes, instead of focusing on their product features, which often requires difficult language. “How does insurance make a difference in their lives?” Sladek urged us to ask ourselves.
4. Millennials are “trophy kids.”
A “trophy kid” is a kid who grew up receiving trophies for participation instead of an achievement. There is a lot of stigma around this kind of practice (and I’m sure that you’re frowning upon it right now) because some people believe that this raises kids to believe that they need constant recognition and reward. According to Sladek, this fact has translated into adulthood and manifests itself in three ways that affect the workplace:
- Happiness: “First and foremost, millennials want to be happy and that goes back to the idea of control. They want to have positive feelings of who they are really working with.”
- Rewards: Millennials don’t want to be another number. “They want to be a name,” Sladek clarified.
- Service: Making a difference and being of service towards others matters to this generation.
How can brands incorporate these three important points? Sladek said that, suddenly, she began to notice that some brands were talking about happiness, such as Coca-Cola, and there were songs about being happy, such as Pharrell Williams’ “Happy.” And that’s no coincidence.
Another example of how to incorporate rewards is to offer customer loyalty or rewards programs. And finally, millennials want to know that whatever they are buying will help people somehow, which goes back to being a part of something bigger than themselves.
Think out loud:
Sladek invited the audience to think about these questions:
- Maybe there’s a reason why millennials are different?
- Maybe the older generations are not speaking their language?
- Maybe the older generations are at fault because of that?
- What are their values, motivators? Really try to get into their mindset to understand what gets them to buy.
- How can a company like ours inspire them to buy?
Finally, after replying to a few questions from the audience, Sladek gave her harshest piece of advice yet: Stop focusing on boomers. “They are already your fans and loyal customers. Don’t focus on expanding that market. If what you’re doing is working, keep doing what you’re doing. I would really shift your focus to a younger demographic. When you start making company projections in five years, you’ll see that there’s a major change,” Sladek recommended.