For years, companies competed with rivals using a simple argument: Our product is better.
These days, that’s not enough.
As the consumer landscape becomes increasingly dominated by millennials, how a product is made, and whether it was sourced ethically and sustainably, is becoming a concern in a way that it wasn’t for their parents’ generation.
That’s not the only way that brands need to relate to millennials differently than other consumers, said Ludovica Cesareo, a Wharton post-doctoral marketing research fellow who moderated a panel on the topic at the recent Wharton Marketing Conference. According to Cesareo, studies show that this demographic’s behaviors and attitudes can be attributed to “coming of age during a time of technological advances, globalization and economic disruption.” Millennials want access and not ownership, she added. Moreover, they’re very price-sensitive; they “live and purchase online” and they care about authenticity.
While some of those points may be arguable, no one can claim that millennials aren’t a force to be reckoned with. Cesareo said that millennials are now one of the largest generations in U.S. history at 92 million people. Plus, they are reaching their prime working and spending years, “so their impact on the economy is huge.”
Promoting Your Brand Ethos
Catherine Chao, an associate brand manager at Unilever who leads operations for Breyers ice cream, noted that the underlying responsibility for brands to “do the right thing” is something that younger consumers are interested in. Millennials, Chao said, “aspire to live intentionally,” which includes supporting brands whose ethos they agree with.
If that’s the case, Cesareo asked the panelists, how do brands gain the trust of these consumers on social, cultural or environmental issues?
According to Kerry Cavanaugh, senior brand director at Mars Chocolate North America, “proof points are big…. It’s one thing to say it, but it’s another to actually be trustworthy.” He described how Mars’s Dove brand this year began disseminating the fact that it sources and roasts its own beans from Africa, and that the brand has helped raise education levels in African communities. “What we realized is that if we put that in a press release, it doesn’t land with anybody. But if you put that in a film and you have your own website that posts it, suddenly people begin to believe you.”
“As much as we have a responsibility … consumers still aren’t really necessarily willing to pay more for [sustainability].”–Catherine Chao
He expressed admiration for the outdoor clothing company Patagonia in terms of how it has established an “authentic” brand. Patagonia started communicating “from day one” what they were about, Cavanaugh said. “They have an incredible amount of content if you’ve ever checked it out … not just about how great their products are, but about what their ethos is, what their beliefs are.”
Chao noted that at Unilever, while “fortunately, it’s our mission to make sustainability commonplace,” this is not without challenges. “As much as we have a responsibility … at least on our end, consumers still aren’t really necessarily willing to pay more for it.” She said that her company is “in the early phase of moving that conversation in the right direction,” adding, “How we translate that into actual buying power is still something I think we’re all trying to work out.”
Letting the Customer In
One element of successful marketing to millennials, the panelists agreed, is to recognize that the very concept of a brand has changed. Companies have to yield some control and allow and incorporate customers’ input.
Michelle Aleti, founder of Thinkwell Marketing, a Philadelphia-based brand strategy and marketing consultancy, noted, “It’s no longer 100% what the companies tell you about the brand — that has stain-fighting power or what have you — but it’s really about word of mouth, ratings and reviews. So that storytelling piece is becoming not just brand-led but consumer-led.”
Unilever’s Chao said that this phenomenon ties in with the critical element of credibility. Rather than “brands pushing,” we have “consumers pulling. That sense of discovery and referral is a lot of what’s going on to build that credibility.”
“Now, [branding is] much more of a two-way conversation,” agreed Cavanaugh.
Jeff Bedard, executive director for Chase Sapphire at JPMorgan Chase, said, “A brand used to be what you said it was, and you were able to communicate that very efficiently. Today, brands are the sum total of what others say that you are.” He said that being mindful of this was especially important in his industry. “The way millennials are making decisions about brands, particularly in the financial services world, is, ‘Do my friends also use these services? What will my family think about me putting money into this service?’”
“The way millennials are making decisions about brands, particularly in the financial services world, is, ‘Do my friends also use these services?’”–Jeff Bedard
Cavanaugh talked about letting consumers co-create a brand, citing Frito-Lay’s annual “Do Us a Flavor” contest. The company invites people to invent new potato chip flavors and vote on the winners. “It’s crowdsourcing to the extreme,” said Cavanaugh. “I think they do the best job of trying to allow brands to be co-created. Which is what millennials love, because they’re a very creative group.”
Another technique the panelists discussed was using influencers, which they agreed was a powerful marketing tool with millennials. “Influencers are incredibly effective,” said Cavanaugh. While on the one hand “you sort of have to turn over your brand to them,” he said, “the reality is that unlike our ads, which nobody really wants to see in their life, influencers actually have people coming to them for information, which is astounding.”
He characterized Mars’s work with influencers as yielding “significantly more eyeballs and a lot less of a spend.”
Chao said that influencers help brands “drive a different sort of base than you would potentially naturally be able to speak to.” She said Breyers has used influencers including TV actress Lindsay Price and Australian celebrity chef Curtis Stone.
Of Stone, she noted that his recipes help bring moms to the brand. “Moms have this pressure of trying to create new recipes and keeping things interest-appropriate for their family, but how to have that healthy balance? So creating use education while also giving a platform to tell a story for Breyers I think is incredibly powerful.”
Millennials Don’t Want to Own Stuff
According to Cesareo, many studies reveal that millennials as a group have little interest in owning a house, a car or other big-ticket items. They gravitate toward the sharing economy in which items are rented or borrowed. Chase’s Bedard described how the recently-launched Chase Sapphire Reserve credit card product has successfully tied into that preference.
“Unlike our ads — which nobody really wants to see in their life — influencers actually have people coming to them for information, which is astounding.”–Kerry Cavanaugh
“I’ll be honest with you, we did not design this product [specifically] for millennials,” he told the audience. “But we have had an overwhelming response from millennials.” He explained that research into the original Chase Sapphire product revealed that customers in general didn’t like to be locked in: “[They said,] ‘I don’t have a particular airline that I want to fly; I don’t want to have status at a particular hotel chain.’ So we built the brand really around understanding that flexibility.”
He noted that Chase Sapphire Reserve hinges on a unique feature: “We define travel exactly as our customers define travel.” The card offers reward points on sharing-economy-type businesses such as Airbnb and Uber, whereas its competitors limit it to certain airlines and hotels, he said. “That really small insight has made a big difference.”
What’s Not Different About Millennials
The panel agreed that to some extent, marketing to millennials isn’t that different from marketing to anyone else. Certain textbook principles still apply. “The fundamentals of marketing — essentially the consumer insights, mining that insight, understanding what makes consumers tick, understanding their pain points — I believe that is universal across categories,” Aleti said. “We’re just pivoting in the way of tactics and co-creation.”
Aleti gave an example from her Procter & Gamble days when she was a global brand franchise leader for Gillette. She said that Dollar Shave Club, started in 2011 and recently acquired by Unilever, based itself on traditional insight into customers’ pain points. “Consumers are sick and tired of the blade-and-razor model … of paying $20 for a four-pack of blades. Dollar Shave Club capitalized on that.”
And the very notion of a brand — another time-honored concept — is still alive and well, according to the panel. They disagreed with a quote that Cesareo presented from distinguished marketing expert Jonathan Salem Baskin: “Brands are simply irrelevant in a world wherein people know that one airplane seat looks like another, different clothes and PCs are made in the same factories overseas and most companies expect customers to help themselves.”
Chao responded, “Brands continue to be relevant in the way that there is an expectation of consistency and outcome.” Aleti said that brands play the role of helping consumers efficiently make decisions.
“For sure, brands are [still] relevant,” agreed Cavanaugh. “But I think it’s how you connect with the brand these days that’s evolved so much.”
Article by Knowledge@Wharton