On the daily elevator ride up to my office, it’s hard not to notice those folks fully engaged on their smartphones, frantically catching up with emails, scrolling their feeds, or sending some text messages before the mad rush to their desk. Not that I don’t ever use my iPhone in the elevator, because I do – it’s just a reminder of the evolving social norms in how we grew up with smartphones.
If you’re among the older generation amused by this, don’t be fooled into thinking that you’re not the butt of the jokes when it comes to owning a car, using Facebook, or paying a cable TV subscription.
After my curiosity got the best of me, I decided to dig into some real data, and was reminded of the more superficial differences among the generations in our economic priorities, purchasing habits, and overall life objectives.
Millennials are Dominating the Economy
Millennials are swiftly overtaking Generation Xers as the largest spending cohort of the US population and economy. In 2019, millennials spent over $600 billion dollars, and will surpass $1.3 trillion by 2021. As businesses put together their budgets and decide how to invest hundreds of millions into their growth and retention marketing strategies for 2020 and beyond, it’s critical to understand the new wave of consumers and put forth a strategy that fully embraces them.
Full transparency: I’m a Gen Xer. I attended high school in the late 80s and college in the 90s. When I graduated college, Al Gore was only pregnant with a functional version of the internet, and even the flip phone wasn’t a thought. If you knew anything about the internet back then, you were probably a nerd interested in a technology movement that the general masses weren’t even aware of, let alone its potential impact on the economy.
Now that you know my perspective, I will flat out reject the blind characterizations of millennials as entitled and lazy, which comes from unfair projections by people who are most likely intimidated by them. And there’s plenty to be intimated or at least confused by. The smartphone generation proved that you don’t need to own a landline, a cable subscription, or a car. Given the proliferation of shared workspaces, it’s clear that gig-based workers are becoming normalized and just as accepted as those with full-time salaried jobs.
The Impact on Retention Marketing
So, when it comes to relationship and retention marketing, can we analyze and hypothesize best practices from these distinctions? Absolutely. Whether your business is offline, online, or runs across any number of verticals, you want a relationship marketing strategy to focus on these generational attributes.
Below are five distinct differences between the two age demographics. In the next article to be published, I’ll focus on specific marketing tactics.
Millennials and Gen Xers have very different fiscal habits
Millennials tend to pay with debit cards over credit cards, and about 23% of millennials don’t care a credit card. In addition to that, the average millennial has a net worth of $8,000. That’s far less than previous generations. Prior generations have traditionally had problems with consumer credit card debt and overspending.
Millennials, on the other hand, carry the highest amount of student loan debt, hovering over $1 trillion, and are more inclined to save money. The average millenial has $27.9k of debt, not including mortgages, but mostly credit card debt.
Conventional eCommerce marketing tactics have been to aggressively upsell and persuade customers to stretch their spending higher and higher. Given the fact that millennials have less money in their accounts, debit cards transactions will not go through if there’s no money there.
Millennials interact more digitally than in real life
A poll commissioned by LivePerson, found that 65% of millennials and Generation Z interact more digitally than in real life. They prefer texting over phone calls, and using social media such as tweets, FB likes, Instagramming and anything else to avoid physical face to face or talking to someone on the phone.
Millennials are the most educated generation in modern history
Thirty-nine percent have at least a bachelor’s degree, and the leap in educational achievement has largely been driven by women. Since 1982, the percentage of women who’ve earned a bachelor’s degree or higher has nearly doubled to 43% from just 21%. Knowing their education levels, how should we market to reach our millennial population?
Millennials will spend more to eat at a hip restaurant
Seventy percent of millennials will spend a little extra to eat at the hip restaurants in town. They’re single-handedly killing off chain restaurants, and spending more on healthier, trendier, smaller-sized meals.
Millennials take Ubers, and don’t buy cars
It all perfectly adds up. Millennials have a tremendous amount of student debt, don’t use credit cards, and have less than ten grand in their checking account. Unshockingly, far less of our younger generation owns cars, and instead opt to get around town via Uber or a Bird scooter, for instance.
To be precise, over 50% of millennials spend money on taxis and Ubers, compared to only 29% of Gen X and 15% of boomers.
What gives me a chuckle is thinking about the 1987 AT&T marketing campaign slogan “Reach out and touch someone”. Given everything we know about the behavior of millennial technology and spending, it would be more appropriate to rename the 2020 version of this campaign “Don’t reach out and touch someone, just send them a text.”
Now that you’ve ready about the generational differences, let’s flip them into marketing tactics that will improve customer relationships. In the next article, I’ll go through some tactics to help shape a winning retention marketing strategy.