We’re living in an age of unprecedented change. We experience with Oculus Rift, invest with Acorns, consume video through Hyper, tune into Pandora and navigate with Waze.
If you really want to win brand loyalty from millennial consumers, stop thinking about them as a segment, focus on their passion points and community connections, and make sure you’re offering them physical experiences they don’t want to miss out on.
Those are just a few words of wisdom from marketing strategy commentator, futurist and consumer trends analyst, Babs Ryan, who was in Sydney this week to talk about how financial services firms can win over the increasingly influential and important millennial market as part of her role at ThoughtWorks.
Ryan boasts of six patents, and has developed innovative consumer and marketing solutions for more than 200 companies across 80 countries. She’s also held executive leadership and innovation at Standard Chartered Bank, Fidelity (investments), Citibank UK, GE Capital, Western Union and American Express.
Of course, it’s not just financial services firms that are struggling to work out how to address the younger generation of consumers. Every sector, from retail to automotive, is looking at how they better engage with millennials and often come up short.
“People are giving lots of reasons for why they can’t engage with millennials – they are apathetic, they’re entitled, or they just don’t have the money,” Ryan told CMO. “While some of this might be true for some people, as a group they aren’t apathetic, or disinterested in the future. What they’re interested in is maintaining or having a more exciting lifestyle full of rich experiences. They’re less likely to want things; what they do want is to have more experiences they can talk about.”
The key way of attracting them therefore is to offer something they are afraid to miss out on, Ryan said.
“No one is afraid of missing out on a transaction account or a personal loan, but they are afraid of missing out on a great holiday to learn paddle-boarding, or the party all their friends are invited to,” she pointed out. “If you can tap into those things they want to do and experience, you’re halfway there getting to talking to them.”
Embrace passion points but don’t rely on segmentation
In a recent presentation, Wunderman’s global CMO, Jamie Getfreund, argued Generation Z not only demands consistency and authenticity from brands, they also expect marketers to know who they are, their passion points, interests and values, then reflect these accurately.
While agreeing all of these things are crucial, one mistake Ryan said too many brands are making is to see millennials as a segment or cluster of segments, such as those still in university, or individuals having their first children and getting married.
“There is a real problem in dealing with segments. The way of marketing to millennials now – whether it’s shopping, financial services – is treating them as segments of one,” she said. “This isn’t about personalisation by saying their name, it’s about offering them the things they are most interested in.”
The other problem with creating passion points and interests is that they can be ironic, Ryan continued. In financial services, for example, most millennials don’t want anything to do with financial management. A Nielsen study in 68 developed countries found millennials don’t want to budget, or be concerned by moving money or institutions. In addition, Australians are the most self-dependent consumers when it comes to make financial decisions.
“So in financial services, you have a paradox of not wanting to deal with them myself, but don’t want someone else doing it for me,” she said. “That becomes a question of what to digitise versus not.”
Another misnomer is thinking technology is the answer to everything millennials want, Ryan said. “What they’re in fact using technology for is to reconnect with humanity,” she said.
As a result, brands must look to help these consumers engage face-to-face with the people they want to engage with. “It’s a contradiction of what people normally think – they think millennials are the digital generation, but they’re twice as likely to go shopping with someone else,” Ryan said.
As a way of illustrating how this can be achieved, Ryan pointed to the Nike+ running app, aimed at consumers passionate about running. The footwear and apparel manufacturers created a reader that went into the footwear and could track a runner’s activity. What made the app different was that it also helped connect those people with other runners in their neighbourhood and to community events.
In financial services, Ryan also highlighted US bank, Capital One’s efforts. The banking group initially offered a co-branded credit card focused on people’s passions, allowing a football league fan to have their favourite team’s logo or photo on their card, for instance. But what was missing was the humanity element, Ryan said.
When the company expanded beyond credit cards, it looked at what people do with other people and launched into the coffee shop space. But rather than just put a Starbucks in a branch, they built independent Internet cafes, where the Baristas happened to be tellers.
“They’re not pushing financial services, but if you’re spending your time in those places, when you do need financial services, you’re going to buy from people giving you a free space to meet and hang out with your friends,” Ryan said. “If you are a startup, that’s where you are going to do business, that’s where you spend your time.
“Retailers are doing this too - where you spend your time is where you spend your money. That’s the major takeaway for what is successful with millennials.”
Don’t rely on mobile apps
This emphasis on connecting people with other people is the opposite of what most mobile apps are doing, Ryan claimed. Many Australian financial services providers might have been successful at getting customers to download and use their apps, but she argued these have fostered transactional interactions rather than relationships. Where 90 per cent of time is spent is in social media, entertainment and gaming, and messaging apps.
“If you’re trying to engage Millennial and Gen Z on mobile and thinking of launching an app, think again,” Ryan said. “Think about what they are doing and how to be part of the communication, not an advertiser on the conversation.
“How you help connect with them – are you the social calendar for occasions, are you providing events for them? It’s not getting them to download yet another app. They’re only using them if they have to. And you don’t want them to open your app to get another discount if they’d buy from you anyway.”
Embrace iteration and co-creation
All of this is inevitably changes the business model organisations need to rely on. Ryan’s suggestion on how to approach this new paradigm is to embrace iterative product development, using technology to get baseline products and services to market quickly.
“Test in market, then validate and decide either way,” she advised. “Think big, but start small and fast. Instead of creating products that are going to have 26 or 85 features, just have the features most important to the consumer and build tech to deliver live to market in a few weeks.”
The beauty of having an agile and lean approach is that customers also have an opportunity to tell you how to iterate in order make your offering a much better one, Ryan said.
“They’re especially engaged when you actually show them how they have developed that product for you, and they want you to listen to them,” she said. “That’s it’s not about surveys either, but about talking to them one-on-one. They’re very forgiving when you tell them what you are doing and appreciate transparency and authenticity.”
“Help them spend their time the way they want to spend their time to actually do things.”
Find a point of difference
And make sure it has a point of difference, Ryan said. An example she pointed to is Standard Chartered Bank’s original credit card for high income customers, which tapped into the key insight that original art was important to these individuals. The Original credit card used each card surface as a unique canvas and featured an original oil painting by an up and coming artist.
“That was important to people, and they were willing to pay for that premium card,” Ryan said. “For millennials it’s the same – focus on what’s important to them, special, something they’ll write home about and talk to their friends about.”