Does “generational marketing” really matter in the B-to-B world?

For marketers working in certain industries, an interesting question is to what degree generational “dynamics” enter into the B-to-B buying decision-making process.

Traditionally, B-to-B market segmentation has been done along the lines of the size of the target company, its industry, where the company’s headquarters and offices are located, plus the job function or title of the most important audience targets within these other selection criteria.

By contrast, something like generational segmenting was deemed a far less significant factor in the B-to-B world.

But according to marketing and copywriting guru Bob Bly, things have changed with the growing importance of the millennial generation in B-to-B companies.

These are the people working in industrial/commercial enterprises who were born between 1980 and 2000, which places them roughly between the ages of 20 and 40 right now.

There are a lot of them. In fact, Google reports that there are more millennial-generation B-to-B buyers than any other single age group; they make up more than 45% of the overall employee base at these companies.

Even more significantly, one third of millennials working inside B-to-B firms represent the sole decision-makers for their company’s B-to-B purchases, while nearly three-fourths are involved in purchase decision-making or influencing to some degree.

But even with these shifts in employee makeup, is it really true that millennials in the B-to-B world go about evaluating and purchasing goods and services all that differently from their older counterparts?

Well, consider these common characteristics of millennials which set them apart:

  • Millennials consider relationships to be more important than the organization itself.
  • Millennials want to have a say in how work gets done.
  • Millennials value open, authentic and real-time information.

This last point in particular goes a long way towards explaining the rise in content marketing and why those types of promotional initiatives are often more effective than traditional advertising.

On the other hand … don’t let millennials’ stated preferences for text messaging over e-mail communications lead you down the wrong path. E-mail marketing continues to deliver one of the highest ROIs of any MarComm tactic – and it’s often the highest by a long stretch.

Underscoring this point, last year the Data & Marketing Association [aka Direct Marketing Association] published the results of a comparative analysis showing that e-mail marketing ROI outstripped social media and search engine marketing (SEM) ROI by a factor of 4-to-1.

So … it’s smart to be continually cognizant of changing trends and preferences. But never forget the famous French saying: Plus ça change, plus c’est la même chose

Are boomerang kids the “new normal” now?

I’ve blogged before about how the Great Recession and resulting high unemployment rates drove a significant number of young adults back into their childhood homes — or relying on Mom and Dad for financial support at least. It affected millions of young adults.

The economy and job prospects have been steadily improving since those dark days – even if the improvement hasn’t been as rapid as people would like to see …

But here’s an interesting finding: Those new jobs and the improving economy haven’t resulted in the kids moving back out of the house.

In fact, two studies conducted by the Pew Research Center in 2016 have determined that “living with parents” is now the single most common living arrangement for America’s 18-34 year olds.

That is correct: Instead of living with a spouse, a partner, a roommate or on his or her own, the largest single segment of millennials lives full-time with parents.  The phenomenon is most prevalent in Connecticut, New Jersey and New York, where it’s no coincidence that the cost of living is much higher than the national average.

For marketers, this means that the once-coveted 18-34 year-old cohort is today made up of many people who are consuming other people’s resources (e.g., the resources of their parents) rather than making all of their own purchase decisions and spending their own money.

Furthermore, Pew Research has determined that living with parents isn’t merely about employment (or the lack thereof). Over the past eight years, adults age 18-34 have continued to move back home in greater numbers — even as more of them have been able to find jobs.

The Pew findings suggest yet another surprising trend that appears to be in the making – that this is the first American generation where a large portion of the people won’t ever purchase a home.

It’s easy to figure that trends of this kind are transitory. But Pew cautions that the trends may well be more fundamental than the implications of an economic recession.  Instead, there are broader cultural dynamics at play – as well as the long-term challenges of economic independence for this generation of people.

The implications for marketers are intriguing, too.  For some, it will mean placing more emphasis on marketing initiatives aimed at parents, who are the now ones making purchase decisions within a larger multi-generational household — often one that stretches over three generations rather than just two.

And consider these dynamics as well: How do young adults and their parents work through multi-generational purchase decisions?  What are the most effective ways to target and reach multiple generations living under one roof who are making coordinated purchase decisions?  Maybe the old ideas of targeting each audience separately no longer make as much sense as before.

One thing’s for sure – it’s risky for marketers to wait for a return to normal … because that “normal” likely isn’t coming back.  Better to come up with new tactics and new messaging to reach and influence buyers in the new multi-generational environment.

What Millennials Have in Common with their Grandparents (or Great-Grandparents)

rsmWhen it comes to attitudes about personal finances, millennials appear to have more in common with their Depression-era grandparents or great-grandparents than with anyone else.

That’s a key takeaway finding from research conducted recently by TD Ameritrade and published in its Millennials and Money Research Report.

Headlining the TDA results is this interesting finding: More than three-quarters of the millennials surveyed would place an extra $1,000 in a savings account rather than invest it in the stock market.

Concurrent with that conservative financial worldview, two-thirds of the respondents in the TDA survey consider themselves to be “savers.” Even more have established personal budgets for themselves and their families.

Helping to explain the similarities in characteristics between millennials and the Depression-era generation, Matthew Sadowsky, director of retirement and annuities at TD Ameritrade, put it this way:

“The Silent Generation and Millennials [both] came of age during a major financial crisis, which increases the propensity to save and financial conservativism. Further adding to Millennials’ financial anxiety is the economy, student debt, and escalating peer influence from social media.”

Social media could partially explain one finding in the Ameritrade field research – the notion that the vast majority of the survey respondents don’t feel financially secure now.

Being active on social media is much more likely to cause Millennials to compare themselves to others: Nearly two-thirds of Millennials admitted that fact (64%), whereas with Baby Boomers the percentage is less than half of that (29%).

Despite Millennials’ awareness of their financial limitations, it doesn’t seem to translate into seeking out the counsel of professional financial advisors. Instead, they’re more likely to rely on parents (38%) and/or friends (28%).

As for their financial goals, most Millennials have bought into the idea that home ownership is a good thing – and something most of them aspire to achieving by the age of 30.

They also appear to have pretty realistic attitudes about retirement, too, as about half are concerned about running out of money during retirement, and hence are open to retiring at an older age in order to maintain a decent lifestyle in retirement.

Does this mean that Millennials will be better-prepared to handle the challenges of living and growing old in our society? The TD Ameritrade survey suggests so.  Still, life has a way of playing tricks on people, so the question remains as to whether this generation will actually do any better than the preceding ones.

Time will tell.

Saving for college: Millennial parents seem to have figured it out better.

sfcRecently SLM Corp. (aka Sallie Mae) released the results of a survey of parents that asked about how they’re saving for their children’s college education. The survey, which was conducted for Sallie Mae by research firm Ipsos Public Affairs, uncovered some pretty interesting stats.

Here’s something that surprised me: When it comes to saving for kids’ college tuition, it turns out that Millennial parents – those age 35 and younger – have already saved significantly more than their GenX counterparts.

Millennial parents reported having saved more than $20,000 toward kids’ college, whereas GenX parents – those between the age of 36 and 51 – have saved only around $18,000.

What’s up with that?

The report lists several possible explanations. First, Millennials are more likely to have started saving earlier for their kids’ college education because of their expectation of having paying a higher share of college costs compared to older generations of people

Likely, their remembering their own (more recent) college experiences.

Here’s another contributing factor: Many GenX parents tended to be hit harder financially than Millennials during the recent recession.  They’re the ones who were more likely to have lost a job further into their careers, when it’s can be more difficult to bounce back quite as easily and at the same level of salary.

At the same time, it’s often the GenXers who have higher mortgage and other debts already racked up when compared to Millennials.

Under those circumstances, saving for children’s college is a commitment that’s much easier to place on hold until other, more pressing financial matters are dealt with.

On the other hand, for Millennials the recession caught them at the beginning of their careers when fewer financial commitments (other than student loans) were yet made, and their flexibility more fluid.

It’s easier to roll with the punches when you don’t have a pile of fixed financial obligations already hanging over your head.

Another factor the Sallie Mae/Ipsos report cites is that GenX parents are more likely to have become over-leveraged in their personal finances — a situation exacerbated by income stagnation, declining stock investment values and declining home values (even being underwater on home mortgages in some cases).

It seems that all of these factors have colored GenX attitudes about saving for kids’ college education in ways that go beyond what the raw numbers show. When asked how confident they feel about being able to meet the college financial obligations for their children, 32% of Millennials stated that they felt quite confident.

But among GenXers, it was just 17%.

Overall, this doesn’t paint a very pretty picture for GenX parents.  But it seems that the Millennial generation has figured out the “college cost recipe” a little more successfully.

For more “topline” statistical findings from the survey, click or tap here.

Are young marketers now the “smartest people in the room”?

Deanie Elsner
Deanie Elsner

Recently I read about some interesting remarks made by Deanie Elsner, who is the former executive vice president and chief marketing officer of Kraft Foods.

Ms. Elsner made them as the keynote speaker at the Tapad Unify Tech 2015 cross-screen technology conference held in mid-June.  The gist of her argument was that senior-level marketers and heads of companies are most often the ones who are the “ball and chain” in a company when it comes to following effective marketing practices.

The way Elsner sees it, too few of these officials understand digital marketing as an integrated program that commingles data with a coordinated brand strategy:

“When you ask marketers to define digital strategy, they will give you ‘random acts of digital’ rather than an holistic strategy informed by data, with KPSs and data points that prove success.”

It doesn’t help that most upper-level managers are part of the Baby Boomer generation or just slightly younger, whereas most of the big developments in marketing technology and the communications landscape are being driven by Millennials.

[An aside:  recently we learned that Millennials, at 87 million strong, are now this country’s largest age cohort — ~14% larger than Baby Boomers.  And they’ll only grow more important in the coming decade or two as the Boomer generation passes into retirement and then into history.]

Millennials-vs-Boomers

In Elsner’s view, Millennial employees understand something that their older counterparts generally don’t see, which is that the “one-way communications” perspective on advertising and promotion is no longer so important — or even relevant.

I can see her point.  Consumers today are the ones determining the conversation and the agenda.  It’s up to marketers to figure out the best ways to follow that agenda and to use the best tools to make it happen.

But then Elsner makes this bold statement that I’m not sure is totally accurate:

“Your smartest person is your most junior talent.  The most dangerous, potentially, is the current CEO, because what they know doesn’t exist anymore.”

I don’t disagree that junior talent “gets” the modern communications environment more inherently than older employees.  However … younger talent is prone to the opposite extreme:  making assumptions based the latest trends for the youngest audiences.

When that happens, people can misread how industry changes affect consumers of all age levels, other demographics and psychographics.

In fact, in my work with numerous corporate clients, often the “smartest person in the room” is the one who’s over the age of 65.  And why not?  The reality is that irrespective of the seismic changes in marketing, there’s a lot to be said for 20 or 30 years of life experience to truly understand what makes human beings “tick” … why people are often so different … and what makes them choose to do the things that they do.

So the bottom line is actually this:  Both younger and older marketers are important and can bring a lot to the table, and there’s more than enough respect to go around.

Boomers and Millennials: Destined always to be different … or on the same trajectory?

NeuroWhen it comes to advertising, it turns out that the Baby Boomer generation sees things quite a bit differently than the Millennial generation.

In fact, based on neuromarketing research conducted last year by Nielsen NeuroFocus, generational differences account for some interesting neurological contrasts between Boomer and Millennial brains.

The research results also point to how companies might find it wise to tweak the design and presentation of their advertising based on the age levels of their audiences.

Consider these distinct differences found by Nielsen NeuroFocus in its research:

Brain Function: The Boomer Brain likes repetition. Boomers also tend to believe that information that is “familiar” is true. On the other hand, the Millennial brain is more stimulated by dynamic elements such as rich media, animation, and lighting that cuts through their “perception threshold.”

Distractions: Boomer brains are more easily distracted, whereas Millennials are adept at dealing with “bleeding-over” communications such as those found in dynamic banner ads and in contemporary magazine layouts.

Attention Spans: Boomers have a broader attention span and are open to processing more information, whereas Millennials prefer at-the-ready, multi-sensory communications. (And “impatience” is their middle name.)

Colors: In advertising, contrasts gain the attention of Boomers in advertising. With Millennials, it’s more the intensity of the color palette overall rather than contrasts within it that does the trick.

Humor: The Boomer generation prefers lighthearted, clever humor in advertising messages – positive and not mean-spirited. Boomers also like relatable characters that aren’t much younger than themselves. Millennials tend to prefer offbeat, sarcastic or slapstick humor – basically, the kind of humor that many Boomers find offputting or even offensive. Making special effects and other visual hi-jinks part of the shtick attracts the attention and interest of Millennials, too.

It turns out, there’s some real science behind these findings, too. Nielsen NeuroFocus reports that when people are in their mid-50s, distraction suppression mechanisms tend to weaken. Even as early as the mid-40s there are dramatic declines in neurotransmitter levels – particularly serotonin and dopamine.

How does that manifest itself in situations where we see “Boomers behaving badly?” Dopamine declines can lead to thrill-seeking behaviors to compensate. And a drop in serotonin levels can lead to the feeling that “something is missing” – thereby leading to classic midlife crisis behaviors affecting a person’s professional life and personal relationships.

… And as we know, that often doesn’t end up particularly well.

But here’s the more central takeaway from the research: Boomer-Millennial differences don’t turn out to be so much a function of differing world views; it’s more a function of the aging process itself.

So look for the Millennials to begin responding more like Boomers in the coming years.

Boston Consulting Group predicts “the end of consumer marketing as we have long known it.”

Boston Consulting Group recently conducted a survey of American consumers to see how their spending habits and approach to brands differs by age group.

Millennials GenXers Baby BoomersThe results give us a quantifiable measure of the differences in outlook between three major age groups:  Millennials (age 18 to 34), Gen-Xers (age 35 to 49), and Baby Boomers and older consumers (age 50 and up).

The survey findings led BCG researchers to declare that Millennials’ perspectives are characterized by a “reciprocity principle.”  By this, they mean that these younger consumers expect “mutual relationships” with companies and their brands.

This isn’t so very surprising considering the ability of the Internet and social media platforms to provide an easy platform for airing their opinions.

A positive brand experience may prompt consumers to take favorable “public” action on behalf of the brand.

A disappointing experience most assuredly will prompt vocal criticism via product or service reviews, social media, blog posts, and leaving comments.

digital-multitaskingAnd the juicier the commentary, the more likely it is to go viral.

The BCG survey found that younger consumers are far more prone to participate in the world of “reciprocity.”

The differences were pretty dramatic when asking respondents in the different age groups whether they agreed with certain statements:

“Brands identify who I am, and my values.”

  • Millennials:  ~44% agree
  • Gen-Xers:  ~38%
  • Boomers and older:  ~33%

“People seek me for knowledge and brand opinion.”

  • Millennials:  ~51% agree
  • Gen-Xers:  ~42%
  • Boomers and older:  ~34%

“I’m willing to share my brand preferences online or on social media.”

  • Millennials:  ~55% agree
  • Gen-Xers:  ~43%
  • Boomers and older:  ~28%

Evaluating the survey findings, the BCG report posits that Millennials are “the leading indicators of large-scale changes in consumer behavior.”

Rather dramatically, BCG also concludes that this particular generational transition is “ushering in the end of consumer marketing as we have long known it,” and that the linear framework companies have used for decades to manage brand image and engagement is headed out the window.

“… Marketers must embrace the reality that marketing is an ecosystem of multidirectional engagement rather than a process that is controlled and pushed by the company,” the BCG report states.

My personal view is that the Boston Consulting Group’s conclusions are probably on-target … but the question is the degree.

I don’t think many major brands are going to simply cede control of their marketing and messaging to the cyberspace or the social cloud.  They’ve worked too long and too hard on their brand image and identity to give up that easily.

For more on the survey findings and conclusions, here’s BCG’s summary article.