Millennials will shortly become the largest age demographic group in the UK overall, meaning that no marketer can afford to ignore millennial spending power and should seek ways to corner and tap into this potentially very lucrative market of buyers.
The millennial generation comprises of adults who came of age around the year 2000, and depending on the source you use to determine the millennial generation’s exact age range, generally refers to people born between around 1980 and the mid-1990’s.
Millennials followed on from Generation X and preceded Generation Z, and are perhaps the most interesting of the 20th century’s generational demographics, as millennials grew up during a period of incredibly rapid technological advancement. Those at the early end of the millennial date range in particular are sometimes described as having an “analogue childhood and a digital adulthood.”
There are almost seventeen million millennials in the UK, making up over a quarter of the total population and coming second in numbers only to the baby boomer generation. Millennials already make up the largest generational workforce in the country as of 2017.
Millennials are also the biggest spenders in online stores, with consumers aged 18-34 spending more online than any other group, despite having lower average incomes and net worths than older generations.
Millennials are one of the most lucrative demographics to market to, but also potentially the most challenging; the group as a whole is very tech-savvy and quick to adopt new technologies, but they are also notoriously distrustful of commercial advertising and the types of approaches and promotional content that is effective for older generations as a result of this.
In this article I will examine the spending power of millennials, their influence and impact, why targeting millennials is important, and how to tailor campaigns and promotions to appeal to millennials and harness the spending power of this most unique of generations.
The challenges of marketing to millennials
Millennials are renowned for being incredibly difficult to market to, because the old, formulaic approaches that proved effective for older generations aren’t anywhere near as effective for this tech-savvy and very switched on digital generation.
However, this doesn’t mean that millennials are unicorns that are impossible to sell to, but rather that they need to be properly understood in order to target them effectively.
Millennials are not hard to market to per se; but assuming that things that work for the demographics either side of them will also translate across the age divide is at best lazy thinking and at worst, pointless and expensive.
So, why are millennials deemed to be notoriously tricky to target and market to? First of all, millennials are the first generation that grew up with plenty of tech and that got in on the ground floor of the commercial take-off of the internet-at-large. Many will remember the dot-com bubble (and when the bubble burst) and the hard sell, clickbait-style marketing approaches widely utilised across the net during the late 1990’s and early 2000s.
Millennials grew up learning not only how to pilot the fast-moving modern tech that younger generations take for granted today, but also how to adapt and evolve on the go, how to critically review content placed in front of them, and how to avoid falling for marketing patter and spiel.
The millennial generation is also a well-educated one in general; by some estimates the most educated generation to date when measured by traditional metrics such as college degree attainment. Millennials were raised under the shadow of the erosion of many traditional industries, the effective end of the expectation of getting a job for life, and an understanding of the value of higher education and the attainment of qualifications in order to progress and succeed.
However, this investment in gaining the necessary education to attain a good, well paid job hasn’t paid off for all millennials, in this age of unpaid internships, huge levels of competition for even entry-level positions in certain niches, and the spectre of overqualification continually hanging over disillusioned millennials who are struggling to gain a foothold in their chosen field even after attending university.
Millennials are also in a fairly unique position in terms of their net worth and financial standing. Whilst this demographic makes up the largest sector of the UK workforce and theoretically has a large combined disposable income, this doesn’t tell the full story. Many millennials don’t feel that they will ever be able to afford to buy their own home, or that saving for a deposit is likely to take many years of sacrifice; leading to one of the common nicknames for the millennial demographic being “generation rent.”
Millennials are only half as likely to own their own home by the age of 30 as baby boomers were, and they spend on average a quarter of their net income on rent. Rising house prices that aren’t matched by correlating annual income increases have served to price many millennials, even those employed in more lucrative fields, out of the housing market entirely.
For millennials who are struggling to pay rent or a mortgage (or save for a mortgage whilst simultaneously paying rent) purchasing decisions of all types aren’t made lightly and tend to be undertaken only after a significant amount of research and comparison, which isn’t easy to sway with traditional marketing because millennials are chronically suspicious of adverts and corporate claims.
Millennials also tend to be green consumers that seek to make ethical buying choices and avoid brands and products with an unknown or less than sterling track record in these areas. Put simply, millennials have lived their whole lives under the shadow of global warming, climate change and the destruction of our natural resources. They also have a good understanding of the value of money and the struggle to achieve the same milestones as older generations, such as purchasing a home or being able to afford to start a family.
What millennials want (and why)
What do millennials want, and what types of approaches do and don’t work when marketing to millennials?
First of all, the hard sell and clickbait are very much out when it comes to marketing to millennials, who are too savvy to accept ambitious claims at face value or to respond to pushy advertising.
Millennials place a lot more importance on word of mouth recommendations, reviews, social media buzz, influencer content, and real-person interactions than they do on adverts and promotions; millennials don’t want to be marketed “to” or “at,” they want to be provided with information and respected for their ability to do their own research and draw their own conclusions.
Corporate speak or marketing jargon are very much out. Baffling with bullshit is one of the fastest ways to alienate millennials.
If you’re trying to market to millennials and falling short, the chances are that this is because you haven’t built up a strong enough picture of what the average millennial wants and responds to, and are trying to use an approach that might be effective when used with a different demographic, but that is unlikely to generate an appropriate yield with a millennial audience.
Millennials grew up in uncertain times and many faced economic hardship before they even reached the age of majority, and this coupled with the struggles that many millennials face gaining a foothold in the workplace and on the housing ladder means that this generation understands the value of money perhaps more than any other, and won’t be easily parted from it.
Whilst millennials like luxury as much as any other generation, they also tend to be more speculative over their purchase choices and need to see the value in them clearly before committing to a purchase.
If the inherent value of your offerings is not obvious and clearly demonstrated, millennials will pass them by in favour of something else, or a better selling approach that is fine-tuned to speak to the millennial demographic personally.
On which note, personalisation is an important sales tool across every demographic, but particularly for the average millennial. Getting this personalisation right pays off in the long term, as millennials are also more likely to build strong brand loyalties too. Put simply, if you want to catch a millennial customer, you have to put the work in; but this work will pay dividends in the long term, and help you to build up a strong and consistent client base too.
Winning (and losing) approaches for marketing to millennials
Millennials are perhaps the most connected generation as well as the group that spends the most time online, and smartphones and other mobile browsing devices are widely owned by the vast majority of the demographic as a whole. This means that recognising the value of the mobile channel when marketing to millennials is vital; and this forms part of knowing where and how to market to millennials, as well as what to say to them.
Social media interaction, in-app mobile ads and promotions and other mobile-friendly content are all good places to start targeting your millennial clients, but generating an organic buzz about what you do regardless of the channels you use is perhaps the most effective approach.
Personalisation of your ads, mailshots, promotions and other content is also important for millennials, and by getting your demographic targeting right, you can divide your larger group into smaller niches in order to enhance this personalisation and boost sales. Millennials love a bargain too, and so personalised discounts and offer codes can also help to boost sales.
However, millennials are again unlikely to fall for old-fashioned marketing approaches that integrate falsely inflated savings or offers – such as the seemingly unending bombardment of television ads for furniture stores that continually promote new sales and discounts, to the point that very few people effectively pay list price in such stores because their business models are so widely recognised as being based on discounting as standard, with the initial list prices often highly inflated to permit for this.
Amazon’s hugely popular and well publicised Prime Day is a good example of this. Whilst a couple of years ago, millennials planned big purchases around Prime Day discounts, they have also helped to blow the lid off the workings of Prime Day itself and highlight the fact that not all apparently large discounts are as impressive as they first appear, making use of tools such as price comparison sites, their own research skills, and the word-of-mouth feedback that social media has made such a common communication tool for the millennial generation.
Shortcutting or trying to mislead millennial prospects is a hiding to nothing. All it takes is one buyer to reveal that what you’re offering is not such a good deal after all, and the word will quickly spread.
Millennials don’t like being hoodwinked and they’re very good at spotting attempts to mislead, and nor do they like to be told what to think or what to buy, and they tend to place more importance on the views of their peers and the people that they admire than they do on corporate content.
If you can get an influencer on side, generate a social buzz, garner a strong portfolio of positive reviews and commentary about your goods or services and receive positive publicity for your brand’s ethics and eco-credentials, millennial heads will turn your way.
Paid ads and promotions on social media are also effective for targeting millennials where they go to hang out and socialise, but these must be constructed and fine-tuned with the millennial demographic in mind. Millennials value individuality and the unique; offering something new, interesting or novel or using a novel approach to promoting a product will catch the attention of this most easily distracted of digital generations.
Image and video content (video in particular) is also highly effective when marketing to millennials, as is brand storytelling. The level of customer loyalty that can be achieved from the millennial demographic comes from investing them not only in a one-off purchase, but in your brand and the lifestyle that it supports too, and once millennials find something they like they tend to stick by it, and spread the word to their peers as well.
Millennials respond to honesty, integrity and respect, and if your promotional content or wider marketing collateral portrays these things about you and about the customers you are attempting to target, and in the right way to catch the attention in the first place, you will be able to build your millennial consumer base effectively. Get these customers talking about your brand and goods and you can also generate an organic, largely self-sustaining buzz that will pay dividends for the long-term too.