Millennials are on track to become the most valuable generation of all time. Despite a lower median income and greater average debt, the sheer size of the world’s most tech-savvy generation (all 92 million of them) has equated to unprecedented commercial potential. Most millennials, however, aren’t spending their money how their parents did. Millennials have shown a well-documented preference for experiential over material spending.
A recent report from Charles Schwab found that 79% of millennials identified with regularly paying for meals at popular restaurants. This constitutes a 16% increase from Gen X and a 24% increase over baby boomers. Good news for the hospitality industry. But millennials can be difficult to market to. Having grown up in a time of rapid innovation, their spending patterns and commercial hang-ups have proven too difficult for many businesses to parse. Those that have managed to attract and retain a younger audience have done so in a few ways:
Offering Free Wifi
Restaurants looking to gain popularity among millennials have quickly learned the importance of complimentary internet access. Unlike older generations, which may consider it a social taboo, 94% of millenials have no problem using their smartphone in a restaurant. Most millennial social activity occurs online, and putting barriers between customers and their preferences is a surefire way to sink any hospitality business. Absorbing the negligible cost of internet access for the sake of making a valuable customer segment feel welcome has helped many restaurants stay relevant in the eyes of millennials.
Staying Active On Social Media
Influencer marketing firm Mediakix estimates the average person will spend five years of their life on social media. Traditional advertising channels like radio and TV are waning in relevance as customer time is spent in user-controlled media spaces. Restaurants looking to retain their millennial audience need to wade in and participate. “Social media is the new distribution of word-of-mouth marketing,” explains Lu Chen, senior director of growth marketing at THINX. “Brands that go viral on social media generate customer reactions, engagements and referrals by leveraging the power of social proof.” It’s not a new concept. What Chen calls ‘social proof’ refers to the newest form that word-of-mouth endorsements (the holy grail for modern marketers) are taking. “Social proof also goes beyond friends and family,” she continues. “Influencer and celebrity endorsement ads are also an effective weapon on social media platforms.”
Managing Loyalty On Mobile
In addition to serving as the hub of modern social life, mobile devices are becoming increasingly important to commercial relationships. This is especially true for millennials. A global study by Oracle found that 52% of millennials want to manage loyalty on their mobile devices, which is good news for restaurants. Mobile applications not only encourage loyalty-shopping and all its associated benefits, but also secure valuable home screen real estate, keeping brands top-of-mind. “Millennials want to use their smartphones and tablets even more,” says Oracle, suggesting “demand is outpacing current service availability.”
Supporting Mobile Payment Solutions
Tech giants like Apple and Google are making immense strides with mobile payments. Millennial adoption of their latest financial innovations has been swift. According to a 2016 study of 1,000 American consumers by Blackhawk Network, “millennials use newer payment methods at a higher rate than the general population, including mobile wallets and peer-to-peer payments.” Restaurant owners looking to keep their payment infrastructure current are taking advantage of platforms like Stripe and Square. Each offer a variety of commercial solutions that ensure restaurants never have to turn away business.
Showing Immediate Loyalty Value
Modern attention spans are at an all-time low. As a result, hospitality professionals are finding customers far less forgiving when it comes to qualifying their loyalty rewards programs. A recent millennial customer loyalty preferences study by Software Advice found that “the top reasons millennials abandon loyalty programs are because rewards take too long to accrue and they’re not deemed valuable enough for the effort required to earn them.” Despite their impatience, millennials will engage with loyalty programs if they demonstrate an immediate benefit. Registration rewards and immediate purchase discounts have allowed many restaurateurs to triumph over millennial attention spans and secure higher LTVs compared to programs that take longer to pay off.
Successful restaurant owners know the importance of stepping outside their comfort zone. While the thought of keeping up with rapidly evolving social and technical trends might seem daunting, the result is achieving consistently paid dividends.