The marketing world is understandably enamored with Millennials, the generation born between the 1980’s and mid-2000’s. Their buying power and fluency with social media has made them critical to a brand’s bottom line and to leveraging today’s fast changing social technologies to amplify awareness, loyalty and sales. What few brands understand, however, is what makes Millennials so fundamentally different to Gen X and the Baby Boomers before them, and how this requires a fundamental shift in how they see their role in society.
The marketing world is awash with research into Millennials – their values, purchasing preferences and shopping behaviors. Too often, however, insights provided by such research is interpreted as characteristics, traits or preferences of this generation, as opposed to fundamentally different mindset that determines what they look for in a brand as an employee and consumer.
Millennials approach today’s world with the intent of creating their own future rather than inheriting their parent’s past. Thanks to the web, social media and smartphones, they are acutely aware of the social crises we face and look to see if brands are part of the problem or part of the solution. They have grown up with connective and intuitive technology that allows them to align with brands and peers on the basis of shared values, and they are committed to using it to make a positive difference in the world individually and collectively. In short, their expectation that brands have a positive social impact is more than a wish, preference or desire that informs purchasing decisions. It is an extension of who they are and how they want to be in the world.
Brands that understand this simple but critical distinction – including the likes of Unilever, Patagonia, Chipotle, Panera Bread and Tesla – have a huge competitive advantage over their peers. It has allowed them to pivot more aggressively and ensure purpose assumes a central role in their company behavior, product development and brand marketing. Here’s why it gives them such an advantage.
- Purpose Attracts Talent and Drives Productivity:
PwC’s, ‘Millennials at Work Survey’ in 2014 revealed that 60% of Millennials seek an employer whose corporate responsibility behavior reflects their own values. This means the purpose of a brand and how it comes to life in their supply chain, product development, employee engagement, marketing and CSR work is a key factor in their ability to attract top talent.
The social purpose of a brand plays an equally important role in building employee satisfaction, retention and productivity, all of which offer significant bottom line benefits to a brand. 69% of Millennials surveyed said a strong sense of purpose determined whether a company performed well financially, 57% believed it impacted whether a company has a high level of employee satisfaction, and 63% said it determined whether a lot of people had joined the company in the last year.
- Millennial Consumers Buy Trust: A new study by the Havas Media Group done in collaboration with GSK and Ipsos found that there was serious money to be made if a brand was seen as trustworthy, or if it was seen as drastically improving a customer’s quality of life. The study asked 300,000 respondents how they felt about each of the 1,000 of the world’s biggest brands (by market value) when it came to its effect on quality of life. The study found that few brands actually matter — in fact most people just wouldn’t care if 74% of the brands in the world around them disappeared — a “disconnection” that is now a constant challenge to all brands.
Trust is a major part of the problem. Havas found that about 50 percent of brands are “trusted” globally — but in North America, that number drops to 22 percent. Havas’ team also explored a number called “Share of Wallet,” a metric that measured the percentage spent with a brand versus the total annual expenditure within that brand’s category. A brand’s share of wallet was 46 percent higher if the brand scored on the drivers of trust and attraction. Further, if found that brands that score high on trust and usefulness also outperform the stock market by nearly seven times.
Millennials Give As Good As They Get: Contrary to popular perceptions that characterize Millennials as self-absorbed or entitled, donating to charities and volunteering are an important part of their identity. According to the 2015 Millennial Impact Report, eighty-four percent of the 1,584 millennial workers surveyed made a charitable donation last year. In addition, while peer influence, competition and incentives to volunteer or donate can boost their participation, Millennials are most engaged in company giving when they are personally passionate about the cause or issue. These insights show how it is in company’s favor to shape their culture in a way that caters to Millennials’ good intentions, especially since the millennial generation now represents the majority of the U.S. workforce.
As employees and consumers, Millennials are reshaping corporate cultures, brand marketing and online giving as they as seek to work and live in what that make a real difference and adds meaning to their lives. As such, their power in driving business growth and social impact cannot be overstated. As the Millennial Impact Report’s lead researcher, Derrick Feldmann, states, “From their buying power to their handle on the limitless potential of social media, Millennials can address issues and be a voice for causes like no other generation before them.”
For brands to capitalize on this opportunity, they must recognize that a company’s mission, employee culture and cause marketing must reflect an authentic commitment to social impact if they are to align with how Millennials view their world. When a brand’s way of being truly aligns with that of its Millennial stakeholders, a company can unlock the power of a generation that will define the marketplace and who leads it for years to come.