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Millennials are valuable because they now make up a major part of the global economy. Therefore, marketers need to focus on this group to develop effective, successful strategies that reach, engage, and convert Millennial consumers.

For our purposes, the term Millennial refers to consumers born between 1980 to 2000. The term Millennial can extend far beyond those age barriers, though, as I discuss in more detail in Chapter 2.

When creating a marketing plan, it can be quite effective to not define Millennials strictly by age. However, you’ll want to make this distinction when analyzing the physical size of the market

There is power in numbers

In 2015, Millennials edged out Baby Boomers as the largest demographic in the United States. Immediately, without any additional information about the demographic, they become important to your business. Volume alone makes them a highly coveted group. They’re all independent consumers, and the vast majority have a steady income. There are very few brands that wouldn’t be interested in marketing to the largest group of consumers in the country.

The Millennial cohort provides plenty of opportunities for marketers. As the largest demographic in the American economy, you ignore Millennials at your own peril. Millennials currently have tremendous buying power and over time will become wealthier.

Here are several reasons why the size of the market is a particularly important consideration:

❯❯ Economic influence: As older generations shrink, Millennials have a growing share of the consumer base. This results in the transfer of wealth. If you don’t develop products that appeal to them today, then you risk your business becoming obsolete.

❯❯ Trend setting: Some trends are set intentionally, such as popular challenges that pop up on social media. One example is the Ice Bucket Challenge, which asked individuals to pour a bucket of ice over their heads to raise awareness for Amyotrophic Lateral Sclerosis (ALS). Other trends occur because of the sheer size of this demographic. Thanks to the availability of web data on Millennials, marketers can spot naturally occurring trends. (For more information on the analysis and implementation of data, see Chapter 4.)

❯❯ Fast sharing: The volume of data available and the rate at which it’s shared creates a changing landscape for marketers. You can currently find more online data about Millennials than any poll, questionnaire, survey, or census could collect. Therefore, marketers need to be ready to adapt to the information revealed by thousands of data points.

❯❯ Brand advocacy: The Millennial market has the power to make or break a brand overnight. The power of the people has never been stronger than it is now. Brands need to be transparent and respond to the demands of activist Millennial consumers. You can’t ignore Millennials who work together to aid or defeat a brand. One such example took place during the original Pokémon Go craze, where a small ice cream shop in Washington state was set to close its doors for good. Millennial players stumbled upon the shop, thanks to the game, and then began campaigning to save the business online. These efforts drove enough foot traffic to triple sales and keep the business alive.

Millennials influence the economy

Millennials have a tremendous influence over the national and global economy. The Fung Business Intelligence Centre (www.funggroup.com/eng/knowledge/research.php) estimates that by 2020, Millennials will control 30 percent of retail spending in the United States, up from 13.5 percent in 2013. That 30 percent, according to Standard & Poor’s, accounts for about $1.4 trillion per year – and that number will undoubtedly grow.

Millennials are poised to receive the greatest transfer of wealth in economic history. Estimates from major American financial institutions, like Morgan Stanley, and research firms suggest that over the next several decades, Millennials will receive somewhere near $30 trillion from the generations that preceded them. That is a startling figure, and one that undoubtedly whets the appetite of marketers in any field.

To determine where that money is likely going to go, marketers should become aware of the spending habits of Millennials. This knowledge will help them build effectively targeted campaigns.

Goldman Sachs has provided key information about Millennials’ traits that you can see at www.goldmansachs.com/our-thinking/pages/millennials.

Some of the factors that affect their behavior are as follows:

❯❯ Money is coming in, but it isn’t necessarily going out. Mean income for young Millennials has gone down over the last decade. Millennials are working, but the cost of living has significantly increased. Income indicators like average national minimum wage have gone down. So, while Millennials are currently a significant portion of the national population, their disposable income isn’t significant. This may have a big impact on buying behaviors, even after the transfer of wealth.

❯❯ Millennials carry a huge amount of debt. The cost of education is a big one for Millennials and has a major impact on what they are willing to spend. In the last decade, according to the Federal Reserve, mean student loan balance has more than doubled for young Millennials. This counts as a form of long-term debt. (That is, debt that is not set to be repaid over the next five years.) This has a significant impact on Millennials’ decision-making processes. Because of this debt, buying decisions are methodical and based largely on utility. A significant part of that utility is rooted in the extraneous benefits of a purchase. For example, on top of the usefulness of a product or service, is there more to be gained from the brand or ownership in the long-run? This is one of the reasons why creating relationships with Millennials and establishing yourself as a trusted brand are so important to both acquiring new customers from this market and keeping them committed over the course of their consumption lifetime.

❯❯ Ownership is not a priority. Major, long-term financial commitments are not as important to Millennials as they were to previous generations. In a world where the share economy and on-demand services have exploded, ownership is less important than access. The sharing economy (see Chapter 12) plays a major role in the Millennial consumer cycle.

The sharing economy, which is covered in detail in Chapter 12, is the market for shared goods and services, giving participants in the economy access over ownership. Millennials have gone through the stages of consumer maturation during a recession era, which has led to significant financial conservatism. Companies or products that fall into the share economy, such as Uber or Airbnb, allow Millennials to access the goods and services they need, when they need them, without requiring them to pay the price of ownership.

❯❯ Millennials are willing to play the waiting game. Just because ownership is not as important to Millennials doesn’t mean that it isn’t on their radar screen. Millennials are more patient and willing to wait for the right time to buy. This, once again, is because of the accessibility granted by both the sharing economy and on-demand services. Almost everything is accessible at the touch of a virtual button, so the necessity to own isn’t quite what it used to be.

❯❯ Brand loyalty goes deep. Previously, when making a sale, recognition and a strong brand were all that mattered. Now, it’s the relationship between the Millennial and the brand. Also, referrals matter more than ever. Millennials care what their friends and family say. Customers trust referrals more than traditional advertising.

❯❯ Quality matters more than price. Millennials are a particularly price-sensitive bunch primarily because they became consumers during the Great Recession of 2008. Price sensitivity combined with a heavy education debt load means that they are cautious spenders. When they do decide to make a purchase, the focus is much less on price than it is on quality. Millennials want a product that lasts as well as a long-term relationship with the brand in question.

They’re a connected generation

Millennials are the most connected generation ever, and they use that connectedness as a tool in the buying process. If you don’t find a way to leverage that characteristic in your communications, your chances of long-run survival are slim.

You need to be aware of certain characteristics to take advantage of Millennials’ communications habits:

❯❯ Millennials are over-sharers. Millennials share everything they do, want, or think, which is great for marketers. It provides a wealth of data and information that you can use to construct highly targeted, personalized marketing messages and campaigns.

❯❯ You learn more by studying Millennials than you do from asking them. Thanks to the over-sharing nature of Millennial consumers, you can find answers to any questions you have or didn’t know you had by analyzing your data. (For information on effectively analyzing your data, see Chapter 4.)

❯❯ They trust each other more than they trust you. Every year, worldwide public relations and consulting firm Edelman releases the Trust Barometer, indicating consumer trust levels in different groups. For the past several years (after the Great Recession), the highest level of trust is placed in peers, friends and family, and industry experts. That means that brand is not on top of the list of resources consumers look to when they need a trustworthy answer. This statement is particularly true of Millennials. They want to hear unbiased, honest opinions from people in their inner circles, likely on social media.

❯❯ The buying cycle is not linear. The buying cycle has an endless number of touchpoints. You have control over some of them while the audience creates others. The key is to note where your prospects connect with your brand so that you can plan to be there. (Chapter 9 covers a complete omni-channel marketing strategy.)

Touchpoints refer to the various interactions that a consumer has with a brand throughout the buying cycle. Touchpoints can vary by medium, creative design, and content type, such as images or video. In traditional media, such as television or print, far fewer touchpoints are in the buyer’s journey. When you consider new media, like social networks, mobile, and other digital platforms, the number of touchpoints can skyrocket over the course of the buyer journey.

❯❯ Mobile matters most. Mobile is where Millennials spend the majority of their time. They connect with each other and connect with brands. If you don’t have a mobile strategy, you’ll lose out on the tremendous potential it provides and likely face extinction in the near future. The generation that dictates how markets operate is telling you to think mobile first, and you need to listen. (I cover the details of creating an effective mobile strategy in Chapter 10.)