Could a fresh perspective on Millennials be in order?
Life Health Pro recently featured an article that stated that nearly 70% of Millennials have no retirement plan. For as long as I can remember, I have seen advice articles about the importance in starting young in saving for retirement. Millennials (often considered the children born in the 1980s and first half of the 1990s) haven’t been perceiving the importance through their own behaviors. It’s not entirely the fault of the Millennials though. The age cohort has been disproportionately affected by the economic environment of the past 5-6 years at a key time in their careers. Statistics and anecdotes of unemployment and underemployment have been quite common. This is a challenge for brands in a lot of industries, as those unemployed or underemployed to varying degrees are perplexing in the sense that they may not have the disposable or discretionary income to purchase. Sales and marketing teams may not always consider this group the highest priority because of this. Depending upon the nature of the brand, this line of thinking could be validated. However, insurance and financial services companies would be wise to think twice about the Millennials. There may not be great adoption of the product categories to date, but that doesn’t mean that the cohort is lost cause.
Perhaps a change in mindset across a number of different categories could be in order. In marketing, the idea of devising a marketing strategy around boosting sales in lower income brackets has been an idea that global consumer products brands have used in the developing world for a while. It is a concept known as bottom of the pyramid marketing. No one should interpret this as comparing the plight of Westerners ages 18-early 30s to the impoverished of emerging economies. However, there is a benefit in seeing parts of the strategy as being useful in reaching a target market.
The key challenge in bottom of the pyramid style marketing efforts is creating volume. Each individual transaction is smaller. To make up for smaller transactions, there needs to be a higher volume of transactions or market penetration. Since sales is a numbers game, sometimes the mathematics to get to the necessary numbers wouldn’t fit the goals of the company. In financial services for example, the assets under management would be smaller per customer, and in certain organizations, compensation structures do not incentivize pursuit of smaller accounts from individuals classified in lower socioeconomic brackets. From a contrarian viewpoint, a company could make the case that building brand loyalty amongst Millennials could pay off over an extended amount of time, like a 5, 10, or even 20+ year period. Often times, long term thinking is sacrificed for the short term results.
Given that constraint, it would take a special organization to take this approach. Due to smaller transactions, it’s not wise to be spending a lot of money on customer acquisition. In a lot of cases, that eliminates costly mass media buys. Fortunately, this age cohort consists of digital natives who could be receptive to advertising messages presented the right away. Digital media is less costly than mass media, but by no means should it be considered free. Distributed social media marketing, a means of providing automated social media while addressing brand compliance, is a great way to reach Millennials, regardless of income levels.
The social media marketing system is permission based, allowing administrators to set controls on aspects of social media campaigns they desire. Users have the advantage of simply opting in to campaigns, having a social media brand built for them without engaging in the arduous aspects of community management, finding relevant content worth socializing about and making time for it on a regular basis.
Even though Millennials may not have the purchasing power of past generations in during early adulthood years, they can be a valuable assets in the right way, especially for longevity and brand loyalty. Their individual preferences make them the perfect target market for social media campaigns, and social media is made easy through the use of distributed marketing software. This could represent a positive opportunity for a number of companies. Insurance and financial services companies have often not focused on the young and not be at the forefront of social and mobile advertising.
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