Tuesday, April 21, 2009

Millennials & Loyalty – Oxymoron or No Brainer?

They’re between 13 and 30, spend over $20 billion a year and influence another $120+ billion in purchases. We live and work with them…we practically (and actually) raised them! But what makes Millennials tick? And more importantly, how do brands earn their loyalty?

On one hand, lots has been written about Millennials taking the word “fickle” to a whole new level. According to Iconoculture as reported by CNET, "You've got a generation of kids who've had an unprecedented amount of control of their media and they're not going to give it up. It does put out a challenge--for anyone in the media business--of how to keep attention in that media."

Bill Hanifin's latest research shows that "over 62% of global teens are apathetic to traditional advertising messages and 42% make purchase decisions based on the recommendations of their friends." As result, he concludes that "traditional methods to engage and retain best customers may not work with Generation Y" (aka millennials).

They snub well-known specialty retailers like Abercrombie for even more unique stores like Buckle. But trends change and (particularly young) Millennials look more narrowly for stores that resonate with them.

As a Business Week story on younger millennials points out, the challenge lies in striking the right balance in luring teenagers with cool and unique offerings but avoiding the slip toward ubiquitousness. "One of the interesting paradoxes of being a teenager is trying to be unique but not wanting to be singled out in a peer group." May be generalizable to all millennials.

At the same time, some have gained traction with millennials. Take ABC Family’s shift toward “hard-to-reach iPod-listening, Facebook-using, YouTube-viewing women, mostly ages 14 to 28.” As the network’s President, Paul Lee, told Variety "We ended up building a brand that's really resonating with that audience...The millennials consume obscene amounts of media, and the truth is this is a generation that wants to lie back and have great stories told to it."

Though they may be fickle consumers with short attention spans, ink has also been spent commending Millennials for being civic-minded doers. According to an April 14 story on AARP’s website (how ironic!) referring to Millennial Makeover co-authored by Morley Winograd and Michael Hais:
“Young adults who grew up in the shadow of the 9/11 attacks and saw the wreckage of Hurricane Katrina are volunteering at home and abroad in record numbers. The generation that learned in school to serve as well as to read and write, the Millennials were the first global Internet explorers even as they pioneered social networking for favorite causes at home. This civic generation has a willingness to put aside some of their own personal advancement to improve society."
So, which is it - fickle consumers? Loyal supporters of one or more causes? I think Millennials are both.

Will embracing social issues like Fair Trade (Starbucks) or shoes for impoverished kids (TOMS Shoes and Timberland) make millennials feel connected to the sponsoring brand, and turn them into loyal customers (and employees)? What about introducing new gizmos and applications to help millennials plan and save money? (Kraft's sponsorship of a new iPhone app that allows people to search for recipes and manage their shopping lists)?

What is the best way to build a loyal following of Millennials? What do you think?

No comments: