Monthly Archives: November 2016

A Millennial Thanksgiving

Out-of-town houseguests change the Thanksgiving holiday dynamic quite a bit.  After the meal is over, the pies have been sliced, the kitchen restored to some sense of normalcy and only the televised highlights of football remain, family & friends who gathered for the big meal typically start to head back home – gradually restoring quiet and calm to our humble abode.  But like the leftover turkey & stuffing, holiday houseguests remain, in this case for many days.  “They’re my family”, I was sternly reminded, so I did my best to put on the rose colored glasses and think of glasses half full.  Then it hit me:  three of our guests were Millennials.

Yes.  Millennials.  The most feared and largest of the generational segments (see Millennials overtake Baby Boomers as America’s largest generation Pew Research 4/25/16).  Much has been published about this group of 19 to 35 year olds, but I’ve personally only witnessed them from a distance – mainly nieces and nephews for a few hours at a time.  So I decided to do a little research on my own.

Here are 3 things I learned about Millennials over the holiday:

1) They are pragmatic

From the way they choose to be entertained, to how they shop, to how they communicate, they are willing to try new ways of doing things – and will change quickly without hesitation if they think there’s a better way.  Take Facebook for example.  My Millennial houseguest sample rarely posts and mostly “creeps” – or checks out what others are posting.  But they do see value in having a legitimate Facebook profile, as a kind of social id card when meeting new people (particularly in a dating scenario).  But for the most part, they’ve moved on to Snapchat – as it seems many have (see While We Weren’t Looking, Snapchat Revolutionized Social Networks, New York Times 11/30/16).

This also plays out in terms of the brands they use…because they use them all.  Google, Amazon, Apple, etc,…They seek out and reward utility.  For example, Apple’s FaceTime is simply impractical to them given that all of the people they want to interact with must own Apple products in order to use the service.  But they also aren’t Google loyalists: they have Gmail accounts but don’t use Google Assistant – instead favoring Amazon’s Alexa.   Spotify at home; Pandora at work.  FitBit instead of Apple Watch.  Brand loyalty gets you into the consideration set, but utility drives the purchase/adoption decision.

2) They are skilled at operating on a budget

Family life is looming for this group.  Housing costs and school loans are a big weight, so they’ve had to prioritize their spending and become resourceful to stretch their dollars.  Their overall interest in food makes cooking less of a chore – saving on restaurant markups – while shopping a handful of grocery stores (i.e. Trader Joes, Kroger, Sprouts, Price Chopper) reduces their overall food cost.  They’re even willing to make regular trips to the outlet mall to reduce what they have to spend on clothing.

Their frugal side can definitely be seen in their entertainment choices.  No cable.  No dish. Netflix is a no brainer, followed by Amazon Prime Video.  They prefer YouTube Red – since it comes with a Google Play Music subscription – effectively getting video & music at 2 for the price of 1.  No room for Hulu as a stand alone subscription.  They’d much rather play Battlefield 1, Ascension or Civilization 6 than turn on a TV and watch whatever happens to be on.  The age-old movie theater remains as a place to meet friends and see blockbusters like the soon-to-be-released Rogue One: A Star Wars Story.

3) They can hunt a deal online…but a physical store still dresses them

Cyber Monday (yes – they were still here on Monday) found our  25 & 27 year old guests side-by-side on the sofa – shopping deals from their iPhones.  To the disappointment of my email marketing friends – the thought of surfing their inboxes never seemed to cross their mind – since, to them, email is just a work & parental thing.  They had previously researched and created a list of things they were interested to buy, so the actual shopping process was very efficient.  This was definitely a social activity, as I heard quite a bit of conferring back & forth on decisions around product specs and color choices.  Much of this was on Amazon, by the way.

Like Netflix, Amazon Prime is also a no brainer – and they outright challenged me to find a Millennial who isn’t a Prime member – so good news for Amazon.  Why walk around a Target store when they can have many of the same items delivered to their door the very next day.  But for clothing – the “try-it-on-before-you-buy” in-store experience still resonates.  Getting clothes via the mail that don’t fit is a hassle to be avoided.

The house is empty.  The bar has been raised.

It’s now been just about a week since Thanksgiving – and our last guest headed back to the east coast this morning (to point #2 above, they took full advantage of our free room & board).  My Millennial guests have left me with an unexpected gift – a unique look into life from their perspective.  I distinctly remember moments like these in the past – when you, the marketer, are suddenly presented with a crystal clear picture of the customer’s perspective.

One December many years ago I helped a young mother, crying baby on her lap, design her family’s first Christmas card over the phone.  She had called Shutterfly customer service just to be sure everything was perfect before clicking to submit her order.  While customer service got some help in answering the phone, it was the marketing team that really came away with a new appreciation for the customer’s needs and challenges.

These small sample, intimate customer moments get ingrained in your memory and energize a marketer’s commitment to do right by the customer.  You can bet I thought of that Shutterfly Mom often in the following months as we crafted the segment messaging strategy.  My Thanksgiving close-up view of a Millennial perspective has had a similar effect, making me once again contemplate what needs to change in order to better deliver impactful experiences that resonate with this unique audience.

Millennials are forcing marketers to up their game.  Following them to the next, yet-to-be-determined social network won’t be enough.  Marketing to “Generation Me” as they establish their place in the world, plant their roots and begin building families will require a tailored approach that probably looks very different than what has worked in the past.

 

Anonymous @ Starbucks

Coffee is an important part of my day.  I love a good cup of joe – and I’m clearly not alone – as the proliferation of coffee shops in every neighborhood and business district seems to go on unabated (Starbucks now has over 24,000 locations in 70 countries).

I’ve been a  Starbucks customer a long time – from way back when the doubters questioned consumer willingness to pay more than a dollar for a cup of coffee.  Funny that many of those same people now spend $3 and up on a latte.  I’ve enjoyed a Starbucks Venti Americano in San Francisco, LA, Portland, Seattle, Vancouver, Chicago, Dallas, Atlanta, Boston, Pittsburgh, New York, Orlando, @ the Louvre in Paris and the airport in Mexico City.  The Starbucks app is one of my most frequently used.

Imagine the quantity of data Starbucks has on me.  They know if I’m local or traveling.  They know if i’m alone or with my family.  They know that calories now matter, given my switch to a pack of almonds from a (delicious) blueberry scone.  They know if I’m commuting to the city or working from the home office.  I could go on for days – as the insight possibilities seem almost endless.

Our local Starbucks has a Clover machine.  If you’ve never had a cup of coffee from one of these – you really should try it.  (here’s a video  from Wired on the $11,000 coffee maker) The Clover machine presents the Starbucks customer with a completely different customer experience – as they can choose from a selection of premium coffee beans and have a cup specially brewed – instead of settling for whatever’s been brewed in the larger vat.  It’s not cheap: $4 vs. $2.45 for a standard grande size coffee.   Probably safe to assume that customers choosing Clover: a) spend more than an average customer; and b) buy more of the higher priced beans to take home.

So given the wealth of customer data I’ve generated over the years and a clear preference that I’ve signaled for a premium coffee experience, I have one simple question:

Why do I get the same marketing content as any other Starbucks customer?

Compare what I’ve described about myself above against a few recent Starbucks communications:

  • I opened my Starbucks app this morning to “A Splash of Spice – New Spiced Cold Brew” and a “Merry Mondays” offer to get 40 bonus stars if I spend $20 or more after 2pm”.
  • Found a similar Starbucks email in my inbox this morning alerting me to “Merry Monday”.

Pretty sure these are national promotions.  Going back through the almost daily email communications I receive from Starbucks & Starbucks Rewards shows a constant focus on “buy this…get x number of reward stars” promotions.  They certainly have nothing to do with the Sumatra I’ve been loving the last few months.

So what?  Why does it matter?  I’ll tell you why:  Starbucks is selling a Reserve Roastery subscription on starbucks.com.  For $19 a month you get “rare, small-lot coffees hand-selected exclusively for subscribers”.  What customer profile is most likely to sign-up for a subscription?  My bet: the Clover customer.  I’m a Clover customer.  Have I heard about the Reserve Roastery subscription from Starbucks?  No.

To Starbucks, I’m just like any other “star hungry” loyalty member.  Do X, get Y stars.  Admittedly, if you ask anyone in the loyalty marketing space,  they won’t be able to contain their enthusiasm for the success of the Starbucks Rewards program.  But in ignoring my data and the preferences it signals, a coffee enthusiast like myself can easily be swayed to try, for instance, the unique experience offered at Philz – or other local third wave coffee providers.

Marketers are forever searching for a silver bullet – and from a distance it might look like the Starbucks Rewards is just that (and I’m sure many loyalty marketing vendors adamantly agree).  But to ignore a wealth of customer data in favor of executing a one-size-fits-all national marketing calendar leaves the door open to competitors willing and able to focus on unique customer niches.

Instead of choosing loyalty marketing over a CRM strategy – a better alternative is to have them both compliment each other.  Fine to acknowledge that I’m a Starbucks Rewards member, but then feed me the coffee enthusiast experience that is clearly available and integral to the Starbucks brand.  Go ahead and give me 20 stars for a Reserve Roastery subscription – but learn from my data and understand that, for the coffee enthusiast segment, the experience may be a higher priority than star accumulation.  You don’t have to make a choice between CRM or loyalty.  You get to have them both.