Everyone’s talking about the millennial generation these days. Born anywhere from the early 1980s to the early 2000s, millennials are generally 20 to 37 years old and clock in at about 80 million—making them the fastest-growing group of consumers in the United States.
Millennials aren’t just young adults living on their parent’s couch. Although often described as the “selfie generation” and cast in a negative light, this is only part of a larger, more complex profile. Actually, millennials are students, working professionals, married couples, and even parents themselves. They’ve been raised in a world with more choices and technology than ever before, and because of this, they view life very differently than their parents do.
Millennials also have more spending clout than any other generation. In fact, it’s likely that by 2017, millennials will outspend baby boomers with about $200 billion a year in consumer goods, according to The Center for Generational Kinetics and Forbes.
All this makes it imperative for small business owners to learn how to effectively market and sell to millennials. If you’re not thinking of them as your customer base, you’re missing out on a lot of opportunities.
According to The Center for Generational Kinetics, businesses should consider these key factors when thinking about millennial buying behavior patterns:
Once you’ve wrapped your mind around the broader buying behavior of millennial consumers, here are some concrete ways to effectively reach and market to this growing demographic.
While older generations grew up on television and radio commercials, millennials grew up with text messaging, email marketing, and other kinds of social media.
When older consumers were growing up, a commercial would often be enough to prompt them to try out a product. But things have changed, and businesses now need to interact with consumers on multiple platforms and levels, says Sarita Bhargava, Chief Communications Officer at Digital Promise. Prior to joining Digital Promise, an education technology startup in Washington, D.C., Bhargava spent years working in brand marketing for companies like The Nature Conservancy, Mattel Toys, and The Walt Disney Company.
“A company’s marketing message has to be relevant and engaging. The sheer size and scale of millennials means companies also have to use technology to change rapidly and interact with this generation,” says Bhargava.
Your small business can engage with this massive population through the very same communication channels millennials use every day—social media, texting, and email.
You can create email lists, send out e-blasts and newsletters, and try an email marketing company like MailChimp or Constant Contact. You can also use Facebook, Instagram, Twitter, and text messages to promote deals to your loyal customers.
This is big one—millennials put a lot of emphasis on shopping at businesses with a social cause, as well as companies that give back to their communities and contribute to global charities.
“Millennials didn’t grow up in a peaceful world, and now they want to make it a better place,” says Bhargava, adding that small businesses truly need to understand what matters most to this cause-driven generation.
So what does matter to millennials? For one thing, buying from a company with a charitable mission. Dani Lichliter, a marketing manager at the digital test preparation company Magoosh, says she prefers to buy from businesses that give back to both local and global communities. And Lichliter isn’t just a marketing expert. She’s also a part of the millennial generation.
Lichliter feels that it’s important to patronize companies that make a positive impact in some way and, she says, millennials love to hear about businesses sponsoring charity events, like a Red Cross drive.
The east coast health burger chain b. good is an example of a cause-driven company—they support organic farms by buying local produce, meat, and dairy. They also hold fundraising events throughout the year to support their communities. And finally, they runs a foundation—funded by donations—that awards grants to its patrons so that they can do good deeds in their communities, too.
Washio, an on-demand laundry application company, is yet another example of a business that makes a point to give back. They promote a donation service where customers can fill up bags of clothes to donate, add the items to existing wash orders, and get those donations picked up and delivered to a local charity by a Washio “ninja.”
It’s key to understand that the millennial buyer looks for passion, happiness, sharing, discovery, and diversity in their shopping experiences, not just in life. In other words, millennials want to purchase a feel-good experience, not just a product.
In a recent Harris Poll conducted for Eventbrite, 78% of millennials prefer to spend money on an experience or event than buying a desirable object. In addition, 69% said they believe attending live experiences helps them connect better with their friends, communities, and the world. And 55% said they spend more money on experiences and live events now than ever before.
Addressing this trend can be as simple as inviting your customers to an event or making the buying experience a little more engaging.
Because the millennial generation spends big bucks on experiences, including travel, your business should also consider ways to think outside the box by marketing products and services your customers can use away from home. This can gain high marks with millennial shoppers, says Lichliter.
Sharing the love—and the wealth—is a big deal with millennial shoppers, who grew up during the rise of the sharing economy. They relate to companies like Uber, the largest on-demand ride company, and Airbnb, a community for booking and staying in accommodations around the world. Both companies offer authentic experiences alongside industry-disrupting convenience.
Millennials love to share discounts with friends, especially on social media. Try giving your valued customers a discount off your services, then letting them pay the savings forward to their friends.
For example, Uber offers users a $10 discount code to pass along to friends. Each time a friend books a ride using your code, he or she saves $10 and you get a $10 credit off your next ride. Similarly, Washio gives its first-time customers a discount that they can pass along to friends for their first order.
“Give $10, get $10 is a big deal with millennials. It’s a model well-known in the sharing economy, but it works in other businesses too,” says Lichliter.
Millennials love to shout from the rooftops—or maybe Yelp—about a business they like or dislike. They also heavily rely on what other people say—by using review apps like Yelp—to decide what new restaurant to try or which service business to patronize.
“I look at Yelp more than any other app on my phone. It gives me instant access to reviews, and that’s extremely important,” says Lichliter.
With this knowledge, your small business can also use apps like Yelp, and customer testimonials, to attract millennials. Even if you’re just starting out and don’t have much feedback yet, you can ask a few of your customers to write reviews that you can post on your website, use in your emails, and post on social media.