Are Millennials the most brand-loyal generation or the least? Do a quick Google search on the topic and you’ll see studies touting both – and everything in between. So what gives? Why the paradox? And why does it say more about who’s asking than it does the latest “it” generation of Americans?
First, a few facts (spoiler alert: they don’t clarify anything):
- Millennials were among the hardest hit by the Great Recession. And yet they’re the best-educated generation in American history.
- Millennials are the fastest-growing consumer segment in auto sales. And yet they’re also the fastest adopters of car-sharing services such as Uber and Zipcar.
- Millennials prefer to rent than buy their homes. And yet they are the largest group of first-time homebuyers, and their mortgages are bigger than any other segment (because, at an average of 7%, they put down the lowest down payment).
Just from the above, you can see why marketers in every vertical are struggling to pin down exactly what it is Millennials want.
I think marketers are going about it the wrong way. While, yes, we can start with the assumption that Millennials want what Gen Xers and Baby Boomers and everyone else wants – namely, a great product at a great price – what sets Millennials apart is what they don’t want.
Let me explain.
Millennials are the most marketed-to generation in history. Cereal, toys, video games, movies, music, cars – you name it. And, of course, it’s no secret they’re the first generation to grow up completely digital. Digital technologies are the air they live and breathe in; they literally don’t know what it’s like to live without the Internet, cell phones, mobile apps and social media. This combination has made Millennials the most marketing-savvy generation in world history.
So what does this mean for financial institutions?
Number one, Millennials are not a one-size-fits-all demographic. Their age differences alone tell us that. The youngest Millennials are still in high school; the oldest ones are well entrenched in their careers and beginning families of their own. This explains some of the contradictions around the research (e.g., why Millennials are buying cars faster than anyone else and also why they’re fast adopters of Uber and Zipcar – if you’re a Millennial just out of college and live in an urban area, you’re not likely looking to buy a car, but if you’ve just turned 30 and about to start a family, you’re likely part of that fastest growing consumer segment in car buying). It’s important to keep in mind what life stage they are in, and market accordingly – just as you would any other segment. Similar demographic differences apply, as well (gender, race, ethnicity, income level, etc.).
What you must also keep in mind, though, is what Millennials as a whole don’t want.
Millennials don’t want a sales pitch, either over the phone or in person. They don’t want to hear it – literally. They want the information they need to make a purchasing decision, when and where they want it. This means online, on social networks, and on their mobile devices. (If you are a bank or credit union, and you don’t have a mobile app, you are not going to win the Millennial segment. Period.)
Millennials don’t want cheap. They don’t trust it. They’re not their father’s (or grandfather’s) penny-pinchers. So if you’re thinking of scaling your portfolio based on entry-level pricing for “economy” goods and services, you’re not going to win the Millennials market. They don’t mind paying a premium price if they feel they are getting a premium product or service in return.
Millennials don’t want to associate with brands that are interested only in making a profit. This is one of the key differentiators for this segment. Millennials value brands that give back to society in some way, shape or form. If you are not promoting your charitable and community service initiatives, then you are not going to win the Millennials.
So, are Millennials loyal or not?
The answer should be clear by now: they’re neither, and they’re both.
The truth is, whether Millennials are loyal to your brand is up to you. (How many times have we used this same line on our Millennial-aged children and grandchildren?)
If you offer a great product, are active in charitable and social causes, and have a social media presence, you are likely to earn their business and keep it. If you don’t deliver on these, if you raise your prices without a clear rationale, or if you provide a poor customer service experience, then don’t be surprised if Millennials jump ship to a competitor at the first opportunity – even if your prices are better.
What this tells us is that Millennials are human – and want to be treated like it. Just like the rest of us.
Want to learn more about how Millennials are impacting the industry? Read our article “How Gen Y is Driving Financial Industry Change.”