How Millennials Are Changing the Face of Marketing Forever

How Millennials Are Changing the Face of Marketing Forever

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How Millennials Are Changing the Face of Marketing Forever

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    Implications for Marketers

    Companies targeting the Millennial generation should align their strategies, initiatives, and investments around the reciprocity principle. To make well-informed investment and business decisions and position the company to target consumer segments, executives and marketers need an integrated, comprehensive view of consumers across channels and in terms of their lifetime value as customers.

    If they haven’t already begun to do so, companies must transform their marketing organizations in at least three ways. First, there should be fewer organizational silos separating such functions as digital marketing, private-brand organizations, public relations, analytics, and pricing. Second, they must build the new organizational capabilities and partnerships required to succeed in a reciprocal ecosystem. Third, companies should shift marketing investment from traditional media to more innovative media and tools that can measure short- and longer-term returns from marketing.

    We suggest the following tactics.

    Set and communicate clear, measurable goals. Few companies outside sectors in which Millennials are currently core customers—for example, quick-service restaurants and apparel—devote sufficient strategic attention and investment to this generation. Nor do they have sufficient methods for measuring progress. One way to encourage accountability is to publicize Millennial objectives within the company—and potentially among investors and customers—and report on how well those objectives are being met. Companies should adopt an annual Millennial marketing plan that is based on an integrated, holistic approach that brings together planning, media mix, campaigns, and tactics into a single view to achieve the company’s overarching objectives for this segment. Programs should be reviewed at least annually to assess whether they are effectively and efficiently achieving such marketing and enterprise objectives as acquisition of Millennial customers, share of Millennial spending, customer retention, advocacy, employee diversity, and improved brand image or fame.

    Reach Millennials with a cross-media, cross-channel brand presence. Most companies still devote too much of their planning and budget mix to traditional media—television, newspapers, radio, and catalogs—and not enough to more innovative media. To engage with Millennials where they are, a brand must be present across the full range of media, through offline and online channels, and on mobile devices.

    Companies need to know which media, channels, and devices work best at conveying promotions, messaging, and brand personality to Millennial targets, and they should use each to its unique advantages. In addition, most companies haven’t yet fully developed the capabilities they need to offer relevant content through online, e-mail, or mobile devices at the right time. Nor have they mastered the ability to monitor customer uptake, understand return on marketing investment, or scale up online and mobile platforms.

    Make sure marketing communications are relevant. To reach Millennial consumers, companies must make sure that their marketing communications are optimistic and positive in tone. They should also visually portray the generation as broadly diverse and inclusive. Companies targeting Millennials in certain sectors should not ignore the marketing value of testimonials from celebrities and partnerships with Millennials’ favorite or aspirational brands.

    Our research found that Millennials perceive themselves as particularly in tune with what they consider to be authentic and real. Millennials tell us that the most common mistakes of non-Millennial creative agencies and executives are marketing campaigns that come across as fake, overly forced, condescending, or off key. Therefore, marketing language, brand personalities, company-supported causes, and endorsements need to be credible. They should be based on what the brand has stood for historically, how the product and experience deliver on that promise, and the actions the brand has taken.

    Reinforce reputation in Millennial channels. A company can connect with the new status currency by demonstrating to Millennials that its brand’s soul is aligned with their values and that customers are doing good by purchasing that brand. Companies should show that they help those in need, are good environmental stewards, are socially responsible, respect personal data, or are transparent. Companies can act meaningfully by creating nonprofit partnerships that promote the causes they support, adopting new codes of corporate conduct, and improving their hiring, people management, sourcing, and manufacturing practices.

    Relate to Millennial constituents. Companies need to invest in nontraditional marketing initiatives and organizational capabilities that allow them to build relationships with Millennials. The goal should be to cultivate more of a one-on-one or small-community connection with customers and potential customers. Such initiatives might include events, recognition, referral programs, testimonials from influencers, customer advisory panels, social media, online community marketing, public relations, customer-relationship-management programs, and e-mail campaigns.

    A company’s own Millennial employees can be valuable in helping it relate better to Millennial consumers. Few companies fully leverage these human assets. Such staff can prove powerful brand advocates or even more powerful critics. Millennial employees can be effectively engaged in numerous ways. Like Millennial customers, they can serve on a Millennial advisory board or help develop products, services, and marketing strategies through so-called crowdsourcing. Millennial employees can also serve as a company’s face and voice in retail channels and social media. Companies should place top Millennial talent in the right management and leadership roles today, particularly in online channels and in marketing and product functions. Human resources departments should incorporate Millennial-marketing lessons into their core processes—and share Millennial-employee lessons with marketers.

    Cultivate Millennial referral. Although companies cannot control whether and how consumers advocate for their products, they can cultivate and measure relationships with consumers who are most likely to influence their target market. They can also influence brand conversations. An effective plan requires an online and offline referral-marketing program that allows customers to interact with the brand and each other and to deepen each customer’s relationship with the company. Another key is to proactively address criticism on social media with contriteness and candor. Companies should reflect what they know about Millennials in their customer-service strategy and in the tactics they use for addressing complaints and questions, such as the availability of service representatives, response times, and online or video chat.

    Finally, companies need an advocacy plan for identifying consumers in each community or network who exert especially strong influence over Millennial customers or potential customers. We call these influencers the critical 2 percent because they account for a tiny share of a Millennial community but have disproportionate sway, opening doors to the rest of that community. Once the company has identified these influencers, it should invest to acquire an in-depth understanding of this 2 percent and develop strong relationships with them. Few companies employ insightful metrics that track the performance of their referral and advocacy initiatives effectively. We recommend tracking the number of interactions with all Millennial customers, customer recommendations, and advocates that generate content. Companies should also measure the quality and sentiment of interactions with their Millennial customers and the critical 2 percent over time.

    The imperative to engage and win over the Millennial generation represents an entirely new set of challenges for U.S. marketers. This is especially true for long-established companies that are accustomed to pushing consistent, polished messages from the top but have little experience maintaining true two-way relationships with customers. Companies that are able to master the reciprocity principle will have a competitive advantage not only when it comes to attracting and retaining the valuable Millennial generation. They will also be more successful at appealing to customers across other generations who are rapidly changing the way they interact with brands.