Tough Customers: How To Reach Gen Y

Teenagers and young people may march to a different drum but they are some of our present customers and definitely our future customers. I think it is important to know just what makes them tick.

The article below should shed some light on who they are and what they want.

They’re growing up on the wired alphabet: PC, CD, PDA, DVD and CUL8R. They average $100 a week in disposable income, spending a stunning $150 billion a year. And they influence another $50 billion in family purchases, bumping the total to $200 billion.

Say hello to Generation Y, also known as Echo Boomers or Millennials. For sheer spending power and cultural hegemony, this consumer group is unrivaled in American history.

If you haven’t thought much about how your wares might attract this cohort of big spenders — who are savvy and wary in equal parts — start thinking. It’s where your future lies.
Who they are

Born roughly between 1980 and 2000, Gen Y-ers are the 70 million-plus offspring of Boomer parents, or about a quarter of all Americans. Gen Y’s leading edge has already graduated from college, while the youngest are busy multitasking to a Hilary Duff or Beyonce soundtrack. (Some demographers narrow the birth years to 1977-97.)

Every generation, of course, is shaped by cultural and political events of its time. This group, however, has been weaned on some rather nasty and transforming national traumas, as noted in a recent issue of American Demographics. That list includes the O.J. and Monica scandals, the 1999 Columbine school shootings, and a presidential election that failed to pick a winner. All before Sept. 11.

A host of marketers already nurture brands that target Gen Y’s teen core. Some examples: media such as Teen People magazine and the influential MTV, which celebrated its 20th anniversary in 2001; clothing like Lucky Brand jeans and Pacific Sunwear; entertainment and accessories like MP3 players and Hello Kitty linens; plus dozens of cosmetics, consumables and sports gear.

How you reach them

Attracting a teen customer is like triple dipping: First, you get the youngster. Next, you get the parent. Third, you get the loyal customer that teen grows up to be.

Reaching today’s teens, advises David Cooper, senior manager in consumer product practices at Boston-based Bain & Co. consulting, can be accomplished with three generic strategies:

1. Make your products cool for the kids as well as their parents. “Offer pop clothes at good prices with a brand that will appeal to 30- to 50-year old soccer moms and dads but that Gen Y is not loathe to adopting,” Cooper says.

2. Exploit contests and promotions. “Gen Y is unbelievably enthusiastic about winning free concert tickets or cars or ski weekends,” he says. “Marketers need to generate teen excitement with radio and mall tie-ins, advertising, discounting, promotional kiosks — anything that’s cool and has cachet.”

3. Become “hip.” Yes, I’ll explain. It means a combination of location and concept, Cooper says. “You have to be present where teenagers want to spend time, in skateboard parks, at concerts, in malls. Older marketers are not as comfortable doing that.”

Concludes Cooper: “You need to balance the benefits of attracting the younger market against the difficulties of embracing alternative business principles.”

After that, you need to get a handle on how Gen Y makes buying decisions. Like teens before them, Gen Y relies on peer recommendations, says John Burnett, professor of marketing at the University of Denver’s Daniels College of Business. “But they are far more socially conscious than any generation since World War II,” he adds. “They believe in giving, participation in nonprofits, and in donations of time and resources.”

Cell phones and good causes

In its second annual survey of Gen Y buying habits, which queries online users age 12 to 17, Cone/Roper found in 2000 that:
• 91% of today’s teens value companies and products that support good causes.

• 89% of teens would be likely to switch brands to one associated with a good cause.

That, too, was well before Sept. 11, 2001. In anecdotal follow-ups, Cone/Roper found comments from this 16-year-old in Charlotte, N.C. to be typical: “The idea that an airplane crashed into a 110-story tower and thousands of people were pretty much executed, that makes you set aside all the materialistic things and all the little selfish whatevers.” She said it made her want to “give back.”

For business owners, such sentiments are a wake-up call. “Companies that support causes will win teen loyalty and dollars,” the report says.

Generation Y is also, of course, the most digitally sophisticated yet. About nine out of 10 teens have a home computer while half have Internet access. More than 50% of teens 12 to 17 own a mobile phone, according to research by Boston consultant Frank N. Magid Associates and, a mobile community marketer. That’s more than 12 million, and counting. A quarter of all 18- to 24-year-olds have Internet-enabled phones.

Desire for community

Lots of Gen Y choices come from viral marketing — another name for peer-to-peer recommendations. To tap into that, links its digital prowess with its desire for community.

For instance, Sony Pictures hired to promote its movie, “Ali.” After registering online, the teen receives wireless text messages (such as “When did Ali meet the Beatles?”) to his cell phone or pager. That’s called “interest-certain content,” because the user signs up to receive the messages. In addition to building buzz for “Ali,” Sony gets a database of customers (and teens) who like movies about sports figures.

Gen Y is also remarkably diverse. About one-third minorities, predominantly African-Americans and Hispanics. They are noticeably tolerant. One in four teens lives in a single-parent home; every high school student seems to know someone who’s gay. Neither is a big deal. Even so, traditional values and parental approval are important, more so than for Gen X before them.

Don’t talk down to them

When pitching Gen Y, keep in mind that they’ve grown up on slick ads and commercial messages. “They don’t trust advertising,” says Burnett. To get past that skepticism, Burnett suggests:

• Deliver consistent, excellent service.

• Understand the teen/Gen Y group. Do homework and don’t make assumptions that they’re all one homogeneous group. Acknowledge the differences.

• Don’t talk down to them. “The most common characteristic is that they know a lot of stuff. The awareness level is very high,” Burnett says.

In general when marketing Gen Y, be honest. Any whiff of over-promising or false advertising will send them running. And if you’re looking to learn more, consider assembling a team of teen peers who can reflect the fast-changing tastes for you. Many teen marketers rely on field reps or young trend spotters.

“What’s most important to appeal to teenagers is to be genuine,” says Victor Ornelas, whose Ornelas and Associates advertising agency in Dallas markets to Latinos. “Teenagers are easily disillusioned by events and trends. They walk to their own beat.”

About the Author:
Joanna L. Krotz writes about small-business marketing and management issues. She is the co-author of the “Microsoft Small Business Kit” and runs Muse2Muse Productions, a New York City-based custom publisher.

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