Empathize With Gen Y's Money Struggles
Members of Gen Y tend to spend their money much differently than previous generations did, and if you plan on marketing to them, you better understand their idiosyncrasies. Below you will find the five questions marketers should ask prior to crafting their next Gen Y campaign.
1. Can I offer my product or service for free for a trial period without "giving away the farm?" Gen Y is the generation that thirsts for free samples. They taste test software, ice cream, coffee, cars, and even online dating services. They will not spend their money unless they are guaranteed even a small degree of satisfaction. This "free sample" approach can help satisfy the basic needs of your Gen Y audience, and they will be more likely to place their business with you.
2. Does your pricing make sense for Gen Y? There are some distinct trends in Gen Y spending. For instance, Gen Y tends to make a small amount of large purchases versus a large amount of small purchases. In addition, spending patterns indicate that Gen Y would rather get a lesser quality product for less money. They are interested in getting the best price, not necessarily the best quality.
3. Can Gen Y research and read reviews about your product online? Make sure they can. Gen Y members trusts their peers' judgment, and they are willing to spend more on items that they or their peers have researched. Look no further than Amazon to see evidence of this. Amazon.com continues to beat other online retailers based on their customer reviews section.
4. Are you sensitive to your audiences' financial struggles? This tough economy is devastating the finances of all generations, but Gen Y is being hit the hardest. Credit is incredibly tight for them, and asking or suggesting that your customers go into debt to buy your service is no longer a valid marketing tool. For years, companies were able to ignore their customers' overall financial pictures, but doing so now is corporate irresponsibility at its worst. Ford, Hyundai, and Ryland Homes are examples of companies that have been innovative with their purchase processes in this tough economy.
5. Does your product or service fall into the top Gen Y spending categories: clothes, food, and technology? This demographic doesn't spend a lot of money on home furnishings, financial products, insurance, or healthcare. Some companies have gone so far as to create Gen Y-specific products within these lagging categories, only to see them fail. You can brilliantly market mutual funds for 25 year olds, but the buying habits of Gen Y suggest that sales would still be low.
The bottom line is this: Respect Gen Y's current financial struggles. The companies that show compassion and sensitivity will be the companies that Gen Y turns to for years to come.