The following is the first in a series of eight articles on Marketing to Millennials (aka, Digital Natives), and is an excerpt from a chapter in the book, Dancing with Digital Natives: Staying in Step with the Generation That's Transforming the Way Business is Done. The full chapter is titled: "Adapting Old-Fashioned Marketing Values to the Needs of the Digital Native" and is written by Michael P. Russell. The book is available through Amazon, Barnes & Noble, and other retailers in e-book and print format. See the end of this page for related articles.
A global study conducted by the Economist Intelligence Unit (EIU), titled "Maturing with the Millenials," claimed that more than half of the executives polled had not yet developed a way to target, attract, or retain Millennials as customers. This is a significant insight, since this generation is and will continue to be a formidable purchasing body. They are just beginning to graduate from college, enter the work force, and establish lives of their own. With those life steps comes the need to make purchases, including the most basic ones such as a car, furniture, and food. Digital natives didn't just appear on the horizon, and it is surprising to see that companies are, to a great extent, still up in the air about how to go after this audience.
Further research by the EIU, sponsored by Genesys, illustrates this pervasive malaise, as none of the techniques cited by executives in this report mentions offering products that the market wants or needs. The closest reference is "Delivering great products at a great price," which ranks third (35 percent) in its list of most effective techniques for targeting Millennials. Ah, but who is defining "great"? That tag is usually decided on prior to market feedback. It falls into the trap of "we have developed something that everyone will want." The EIU found that, according to executives worldwide, the four best techniques for tapping into the digital native market were: 1) participating in viral marketing and peer-to-peer recommendation sites (41 percent); 2) sponsoring or advertising in areas populated by Millennials, such as extreme sports, music venues, and social network sites (36 percent); 3) delivering great products at a great price (35 percent); and 4) focusing not only on Millennials but also on their key influencers (e.g., parents, peers) (30 percent).
Many "great" products have fallen by the wayside because demand never materialized, and executives were left scratching their heads unable to determine what went wrong. The Segway is a great example of this. It generated enormous buzz prior to and immediately after its launch. Jeff Bezos made the claim that Segway would reach $1 billion faster than any previous company. Cities would be architected around the Segway. None of this has come to pass. All the funding, great engineering, and fanfare could not make up for the fact that the Segway did not fill a need or a want for that matter. It missed the mark in price, application, and access to use.
Since digital natives were born into a technology-abundant world, it's not the technology that is changing them. They explore their desires, wants, and needs via technology as those are the tools that have always been available to them. And businesses certainly need to take advantage of these additional channels of access that digital natives rely on. These new channels provide an opportunity for immediate contact and feedback.
Speed in obtaining information and responding to it is the most significant difference between this generation and those that preceded it. Digital natives want things now and/or want them improved immediately, and this expectation compresses the time companies have for engagement and potential sale.
Because this generation is still young, they have not yet fully developed their interests and needs, unlike older consumers in the market. Therefore, a well-crafted marketing strategy that targets digital natives must go beyond convincing them to buy a product. At the heart of the challenge is trying to better understand why they are buying and what is motivating their demand. Gautschi and Sabavala appropriately point out in "The World That Changed the Machines" that strong demand in the market comes as a surprise and thus results in lost sales due to insufficient capacity. Companies that lack the ability to quickly react or respond will see the market pass them by. Effectively defining its market can help a company better gauge what the potential demand will be. Seth Godin, author of a number of wildly popular marketing books, put it very well (as quoted on the mobileyouth.org site): "We're moving from an era of finding customers for our products to an era of finding products for our customers."
Photo courtesy of r.f.m. II, Flickr Creative Commons.