How Small Business Owners Can Segment Their Marketing by Generation Part 1: Centennials and Millennials
Technology has greatly divided marketing preferences between the four major generations. As a result, it’s been incredibly difficult for small business owners to decide which marketing channels to use and which marketing strategies to implement. Before deciding which strategies are best for your business, it’s important to understand these distinctly different generations.
The 4 major generations to look out for include:
- Centennials: Those under the age of 21
- Millennials: Ages 22-37
- Generation X: Ages 38-52
- Baby Boomers: Ages 53-71
In Part 1, we’ll explore the two youngest generations: centennials and millennials.
Small Business Marketing: Centennials Vs. Millennials
Centennials grew up surrounded by ads at every turn. As a result, they’re often turned off by many traditional marketing efforts. Avoid overly sales-y language with this group and instead focus on improving your brand and brand experience to entice this group. They may prefer non-traditional channels of communication, but businesses are still required a certain level of personalization to impress them. If they have good experiences with your brand, they’re more likely to continue to buy – but they’re not as brand loyal as millennials, so keep that in mind.
Millennials are the most brand loyal of any generation. They’ll be the most receptive to your marketing messages, but these relationships still require work. Keep your messages personalized and reward their loyalty in the form of loyalty programs. Loyalty programs are one of the reasons that millennials are so brand loyal – with 22% citing this as the reason for their loyalty. They also find price and the company’s reputation important, so those are some key factors to keep in mind, as well.
Quality or Price?
Over 25% of centennials describe themselves as quality-first shoppers and are only second to millennials. Offering high-quality goods is important to them.
34% of millennials describe themselves as quality-first shoppers. But they are just as equally driven by price – also 34%. As a result, it may be difficult for small business owners to decide between a price-driven strategy or a quality-driven one. If your business is trying to appeal to younger generations, like millennials and centennials, then emphasizing brand quality may be best. However, if you’re looking to market to millennials and the older generations, like Generation X, then consider a price strategy, as Generation X tends to be a bargain hunting generation. It’s difficult to present your brand as both at once, so pick carefully.
What Drives Purchases?
Millennials are incredibly brand loyal – at a cost. Often, their loyalty is based on loyalty programs (22%), but it’s a small price to pay in exchange for frequent shoppers. Additionally, millennials are most likely to say that loyalty points affected their most recent purchase decision (15%). Clearly, small businesses should consider loyalty programs when marketing to millennials.
3 things appeal to centennials more than any other generation: (1) free shipping (59%), (2) brand prestige (11%), and (3) special experiences, like in-store events (4%). So retail marketers should consider free shipping as deals or fixtures on their online experiences, building a good brand, and offering some interactive events to improve the brand-customer relationship.
Which Marketing Channels?
As far as channel preferences, centennials likes mobile apps and display ads best (56%). Also high for them was social media at 42%. They value email least of the generations (46%). This may be more than social media, but it’s showing that while email is a powerful tool for other generations, it doesn’t wow centennials quite as much.
More than any other generation, millennials consider email the most important marketing channel, at 67%. Accordingly, sending remarketing and follow-up emails may be great ways to stay engaged with millennials. Mobile apps (61%) and social media (50%) are also high on the list, proving digital forms of communication are crucial for these generations.
Millennials and Centennials: Similar, But Conflicting Preferences
Millennials and centennials are similar in many ways. They both prefer quality goods more than the older generations. They also primarily care about digital forms of communication. Centennials value email, but far less than millennials. Meanwhile, mobile apps and social media are important channels for both generations. On the other hand, millennials and centennials have diverse purchase drivers. Centennials’ reasons are pretty unique – they like live events, brand prestige, and free shipping. Millennials enjoy loyalty programs. If marketing to both generations, it may be important to carefully segment the two for most effective marketing, as their consumer needs can often conflict with one another, despite their many similarities. In Part 2, we’ll take a look at the older generations: Generation X and Baby Boomers.