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5 Factors for Engaging and Building Brand Loyalty With Millennial Consumers
5 Factors for Engaging and Building Brand Loyalty With Millennial Consumers
5 Factors for Engaging and Building Brand Loyalty With Millennial Consumers
5 Factors for Engaging and Building Brand Loyalty With Millennial Consumers
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5 Factors for Engaging and Building Brand Loyalty With Millennial Consumers

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Spark a genuine dialogue with Millennials. By discovering what matters to them most (and why), you’ll be one step closer to earning true, long-term customer buy-in from this elusive demographic.

Spark a genuine dialogue with Millennials. By discovering what matters to them most (and why), you’ll be one step closer to earning true, long-term customer buy-in from this elusive demographic.

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  • 1. Spark a genuine dialogue with Millennials. By discovering what matters to them most (and why), you’ll be one step closer to earning true, long-term customer buy-in from this elusive demographic. Who is the typical Millennial? How does this group see and interact with the world? Considering they comprise nearly 25% of consumer buying power1 (and growing2 ), brands have an exciting opportunity to connect with the world’s most plugged- in generation. Persuading Millennials to purchase is one thing, but what about building brand loyalty? 24% of Millennials feel they are more brand loyal than their parents, but 56% would switch if their financial situation changed.3 How can brands convince them not just to buy, but to buy in and stay in for the long haul? First, there’s a big challenge: Defining Millennial spending hab- its in a simple, concise way is an impossible task. The fact that Millennials are so difficult to box up into a single profile is pre- cisely how best to describe them. What’s more, according to Huffington Post’s Rob Henderson, society often dismisses Millennials for exhibiting, “...entitled, narcissistic and non-committal” characteristics. While perhaps true, that characterization is far from the whole story. Henderson goes on to say, “If Millennials were recognized for some of their positive attributes, like their open-mindedness, self-express- iveness and receptivity to new ideas, this generation could really start to shine as they become more prominent.” By keeping this multi-faceted (and somewhat contradictory) portrait of Millennials in mind, marketers can seize real oppor- tunities to be creative and interact with this most curious and willing, yet hard-to-pin-down, group of participants. But in this era of customer choice, how do marketers avoid contributing to that over-stimulation hangover, and instead, tee- up a message that will slice through the cacophony our multi- tasking Generation Y is subject to? Segment Audiences & Optimize Relationships A brand will fail if it targets Millennials as a whole, because they are not one animal. Success comes through segmentation. Millennial experts and authors of Marketing to Millennials, Jeff Fromm and Christie Garton write, “It is critical for brands seek- ing to engage this new generation of consumers to know which of these Millennial segments is most important to their brand category.” Fromm and Garton categorize Millennials into six groups: 1.Hip-ennials are cautious consumers and the greatest users of social media. Mostly female, and tend to be students and homemakers. 2.Old-School Millennials are disconnected, cautious but confi- dent consumers. They’re independent, skew older, and still prefer print and traditional media for news and information. 3.Gadget Gurus are successful, wired and confident. They are highly mobile, own multiple devices, and contribute digital content. Tend to be male and single. 4.Clean & Green Millennials are young, impressionable, cause- driven, healthy, and environmentally conscious. They’re the, greatest contributor of digital content and skew male. 5.Millennial Moms are wealthy, family and fitness oriented, and digitally savvy. Female and slightly older, they show the high online intensity among Millennials. 6.Anti-Millennials are locally-minded, conservative, and tend not to spend more for “green”. They prefer familiarity over ex- citement, and skew slightly more female. Christine Barton, Partner at Boston Consulting Group, advises, “…if the brand tries to go after the entire monolithic group at once, it could end up doing something that does not appeal or is at cross-purpose to a key segment. Instead, brands should optimize their relationship with their key targets with whom their brand has permission.” ENLIGHTENMENT SERIES Moving From “Like” to Love Five Factors for Engaging and Building Brand Affinity & Loyalty With Millennial Consumers © 2014 Cult Collective Ltd. April 2014 1. Jeff Fromm, Celeste Lindell, Lainie Decker, “American Millennials: Deciphering the Enigma Generation” http://barkley.s3.amazonaws.com/barkleyus/AmericanMillennials.pdf 2. Jeff Fromm, Christie Garton, Marketing to Millennials: Reach the Largest and Most Influential Generation of Consumers Ever (New York: AMACOM, 2013), 57. 3. 2014, Adroit Digital, What Makes Millennials Brand Loyal? 4. 2013, Abacus Data, Canadian Millennials & Beverage Alcohol http://canadianmillennials.ca/wp-content/uploads/2013/06/Abacus-Data-Bevsupport-Canadian-Millennials-and-Beverage-Alcohol.pdf By keeping this multi-faceted portrait of Millennials in mind, marketers can seize opportunities to connect with this most curious and willing, yet hard-to-pin-down, group.
  • 2. © 2014 Cult Collective Ltd. Listen & Learn Talking with and listening to your customer (now more do-able than ever thanks to social media and other technology-based communications) helps to build a relationship of trust and openness. According to a January 2014 brand loyalty report by Adroit Digital in which 2,000 US Millennials were surveyed, 52% said that for brands to remain relevant, companies need to listen to consumers and be willing to change based on their feedback. For perspective, 44% of those surveyed believed keeping an open dialogue through social channels made a difference, 29% thought more advertising would help, and 25% reported a brand’s charitable behaviour would win higher loyalty. Daimler is one company who seems to be listening, as evi- denced by its Car2Go brand. Where traditional automakers are trying to create cars that Millennials would buy, Car2Go is going with the flow by giving them not a car, but a carsharing service. Modcloth, an online vintage-inspired clothing retailer, is blazing a trail when it comes to cultivating lasting relationships with cus- tomers by harnessing each person’s ability to actually partici- pate in the design process. According to Johanna Faigelman, founder and president of Human Branding, “Modcloth custom- izes its product interactions with its customers to fit the Millen- nial need for information and exerting influence. “By encouraging its customers to comment on garments, main- taining a blog about featured designers and offering customers the ability to select the next offering, customers feel informed and included in the company’s decisions…The key is to give Millennial consumers the opportunity to gain knowledge from your brand without overtly trying to ‘teach’ them anything. Don’t tell them, share with them.” If you talk with your target consumers through social media and by employing creativity as Modcloth did, you just might initiate a meaningful dialogue. It’s a dialogue that could develop over the years and prove your brand’s ability to grow and evolve, just as your customers do. Use Honesty & Transparency to Connect on Values Millennials can be influenced, but they cannot be deceived. Honesty is – and always will be – the best policy. As nineteen year-old Chloe Agache, Queen’s University Marketing Associa- tion Conference 2013 winner explains, “I think branding just has to be honest. If they’re trying to portray themselves in a cer- tain way and that’s not the way the corporation is, younger con- sumers see through that.” In a FastCompany article, writer (and Millennial) Tara Gentile explains, ”We value connection to each other and the world around us.” Millennials may be less interested in owning today, but when they do buy, they're looking for meaning. “Old prod- uct categories get new life when your company infuses them with meaning… that boosts sales.” In the same spirit as Dove’s “Real Beauty” campaign aimed at stripping the façade of photo retouching, Aerie (Aeropostale’s lingerie brand targeting Millennial women) has jumped on the Photoshop backlash bandwagon with a new campaign. Dubbed "Real", it features more realistic imagery and only un- retouched models. Plus, garments shown on the Aerie website are modeled in all sizes, not just the smallest, enabling shop- pers to better understand what garments might look like on their own frame. Aerie’s campaign thus reflects – in a very literal way – Millennial consumers’ highly regarded value of honesty. Personalize Experiences & Make Human Connections Talking it out is only one step on the road to cultivating genuine brand devotion. According to Strategy magazine, what Millennials really want is for brands to “just be themselves.” And they better be well- brought-up selves. Brands need to project an inborn decency through friendliness, honesty, generosity and altruism. A truly great brand must be relatable through the personification of human attributes. Clothing and lifestyle retailer, Urban Outfitters, engages its in- dependent, free-thinking customers by living the brand values it promotes. The brand ethos is centred on celebrating individual- ity and creativity; values that are established within the brand from the inside out. Where most retailers execute a single marketing strategy across their entire network, the employees at Urban Outfitters’ 200 stores are encouraged to create shopping experiences unique to local shoppers. That, in turn, instills loyalty within its customers, who are seeking an eclectic, relevant retail experi- ence that has a sense of discovery and cultural understanding. Brands that get creative in talking with consumers might initiate meaningful dialogue that could develop over the years and prove their ability to grow and evolve, just as customers do.
  • 3. © 2014 Cult Collective Ltd. “One of the ways that our brand is so special is the level of creativity and autonomy that we give to people all across the brand to bring it to life for our customers,” says Steve Hartman, Managing Director, direct and marketing at Urban Outfitters. Through that locally focused strategy, Urban Outfitters is better equipped to stay abreast of what customers are saying and to anticipate their needs and desires. Urban Outfitters founder, President and CEO, Richard Hayne states simply, “Create a relationship and that relationship then translates into sales.” U.S. retail consultant Bob Phibbs echoes Hayne’s sentiments. He believes that Millennials, in particular, need to be actively engaged, as they are a “...consumer segment that expects to be constantly given a reason to maintain any connection with retailers or brands. The best way... is to concentrate less on the product and more on overcoming customer indifference.” Consumers who regard the connection to their favourite brand as they do a relationship with a good friend find it considerably more difficult to ditch that brand, and even forgive its failures. Who would dump a friend who cancelled a coffee date? Not surprisingly, 59% of Millennials admit their strongest loyalty to their mobile phone providers, followed by their favourite fashion brands at 56%. By contrast, their affinity towards hotel and air- line brands ranked a dismal 16% and 25% respectively.3 Get Local & Cultivate Customer Communities Magical collaboration happens when global brands and a local community support one another. True brand affinity can de- velop when a local community and a brand converge. Successful engagement strategies are those that feel natural and organically weave themselves into consumers’ lifestyle. In 2009, Nissan Canada found a fresh way to unveil the Nissan Cube. Considered groundbreaking at the time, the campaign solely employed social media as a launch platform for a new car. Through an invitation-only contest, Nissan attracted the nation’s artsy sub-set with a chance to win one of fifty Cube vehicles. The contest drew positive attention to arts and culture hotspots around the country, and, Nissan benefited from the positive word-of-mouth spread by a new fleet of Cube-driving brand ambassadors. What’s more, in a recent TED Talk, National Geographic’s Guerrilla Geographer, Daniel Raven-Ellison, explained, “Global businesses are made by multiple and interconnected local communities, and many local communities are created by large businesses. One cannot exist without the other.” According to a 2013 consumer trend report from the Business Development Bank of Canada (BDC), 66% of Canadians have endeavoured to buy local or Canadian-made products recently. "People are more and more conscious about the environment; they're more aware of the importance of corporate social re- sponsibility, [and] they are translating their concern into a desire to buy more locally-made products,” says Pierre Cléroux, BDC's chief economist. If a global brand is to stand a chance of holding any real estate in the hearts and minds of Millennials, in every community where it has a presence, it better try to be seen as a local, but in authentic, relevant ways. Organic supermarket chain, Whole Foods, emphasizes “local” in its brand strategy. Each store employs a community manager who oversees customer engagement through multiple plat- forms. Corporate Headquarters exists to support the particular initiatives of each store, rather than insisting that a one-size-fits- all strategy be implemented across the enterprise. Whole Foods is the poster-child for social media done right, creating condi- tions for customer engagement and conversation to occur as naturally as possible. Whole Foods empowers staff to tailor merchandise and services to the needs of the local communities each store serves, while Community Managers engage local customers through multiple channels. And what about those once local brands that grew into big brands and were acquired by international conglomerates? Brands like Ben & Jerry’s or Tom’s of Maine. These brands do such an excellent job of staying locally relevant that the fact they’re owned by multinational behemoths Unilever and Colgate-Palmolive eludes most consumers.
  • 4. © 2014 Cult Collective Ltd. Ben & Jerry’s pioneered customer engagement by releasing ice cream flavours based on customer ideas, and has enjoyed a cult following for years. To quote founder, Ben Cohen, “There is a spiritual aspect to our lives. When we give we receive. When a business does something good for somebody, that somebody feels good about them.” If a brand takes genuine interest in the local community, that community will give back by directing more purchasing dollars to that business. Millennials will spread the gospel via social media channels and by personally talking to their friends near and far. Summary: 5 Key Factors Influencing Millennial Love Millennials are a diverse bunch, and will not be defined and confined by a handful of simplistic descriptive terms. To win their love and loyalty, a brand must exemplify these characteris- tics before Millennials will begin feeling any affinity. 1.Segment your audience. Do not attempt to talk to all six of the identified sub-groups of Millennials at the same time. If your message is too broad, you will be unlikely to acquire new brand devotees and definitely no brand evangelists. 2.Be a good conversationalist and a good listener. Encourage customer participation and be willing to change or adjust based on feedback. 3.Be honest and don’t deceive. Do not claim to be something you are clearly not. Your brand will jeopardize its credibility as Millennials see through the façade. 4.Be friendly, human and personal. If a brand were a good friend, how would it behave and what characteristics would it need to possess? 5.Be local and community oriented. Millennials need to see that your brand plays an important role in their communities, scenes and social circles. As author and Millennial thought leader, Brian Solis, writes, “Buying behavior is indeed changing and the role the customer plays in the greater scheme of business is gaining in promi- nence. There is a great shift occurring and power is moving away from businesses and toward people… Businesses are no longer the sole creator of a brand; it is co-created by consum- ers through shared experiences and defined by the results of online searches and conversations.” Nissan’s “Hypercube” engagement strategy was designed to recruit influential Canadian Millennials as brand ambassadors for the Cube minicar. Hypercube winners were selected by online voters while competitors distinguished themselves through self-generated publicity. The path to enlightened marketing starts here. Cult is one of North America’s first engagement agencies. We help brands build unbreakable affinity and irrational loyalty required to dominate in today’s hyper competitive marketplace. web cult.ca/blog email enlightenme@cult.ca phone 403.228.7949 Rob Howard For the past seventeen years, I've worked with consumer, b-to-b and non-profit brands to strategize and execute effective marketing communications that get results. Now, I help organizations find, ac- quire and serve customers in new ways that foster deep brand affinity and loyalty, and in ways that deliver measurable return on engagement. e: rob@cult.ca t: @HowNowWow Brands can ignore this reality and continue targeting Millennials with traditional marketing approaches, or start engaging them in new, compelling, disruptive, and unique ways.

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