The salesman approached me, and I asked him how much the car cost.
He asked me how much I was looking to spend.
I told him $8,000.
And as you may have guessed he told me that was exactly the price of the Mustang.
Now, what is the lesson for you?
As a marketer, you are in a position to manipulate your customer if you so choose to. But that doesn't mean you should. And when dealing with Gen Y you can either use their characteristics to work with them, or you can use their characteristics to take advantage of them. As you can imagine, in the spirit of the greater good, you should use your market research to work with them.
So, now that we have covered your obligation to Gen Y, let's take some time to learn about them financially.
1. Gen Y is wracked with debt, and they don't realize the ramifications of this. The average person graduates college with over $20,000 in student loan debt. This is actually a good example of selling something (loans) to a group of people that aren't in the best position to make a good financial decision.
I'm not discrediting the importance of a college education, but I'm simply pointing out that 18 year olds are committing themselves to levels of debt that they can't possibly comprehend. Understand that it's quite possible that your product or service could contribute to this train wreck of debt.
2. Gen Y either doesn't care about planned obsolescence or doesn't know what it is. Either way, planned obsolescence will continue to break (financially) Gen Y until it's no longer an industrial trend. Planned obsolescence, simply put, is a manufacturing strategy that encourages customers to always buy the latest greatest thing.
This is generally accomplished through a slight tweaking of product features, and then marketing the hell out of the feature changes. The customer ends up buying the features, and ignores the fact that the previous product they own is still a very workable solution.
Gen Y always wants the latest greatest thing because they haven't caught on to the game of planned obsolescence. Are you going to perpetuate the practice of planned obsolescence? Or are you going to build a product or service solution that is a long-term solution?
3. Gen Y has created a group of expenses that I call The New Necessities. This is a category of spending that didn't exist 15 years ago. The category includes Internet access, mobile phone charges, cable, designer coffee, and lease payments. Young people don't think twice about paying big money for cell phones and coffee.
I guess that's why there are so many highly caffeinated broke people face down into their cell phone texting their highly caffeinated broke friends. Gen Y doesn't see anything wrong with spending money on these items, and if your product or service can find it's way on to this new sacred list, then you are golden.
4. Gen Y has more bailout plans than the federal government. And as is the case with the newsworthy bailout, Gen Y bailouts are also ill conceived. Gen Y will not hesitate for a second to solve their financial problems in two very distinct ways. They will use their credit cards in a heartbeat, and they will pick up the phone and call their parents in an instant.
Ask a group of Gen Yers their backup plan, and these two solutions will come up time and time again. As a marketer, this is a very important thing to know. Gen Y never says die; they will find a way to afford the things that they want.
You may be thinking that Gen Y is a generation that is guilty of the "keeping up with the Joneses mentality," but they aren't. Their desire to have the things that they want is personal. They don't particularly care what their friends have or don't have. That is more a characteristic of Gen X.
This nugget of truth paired with the financial characteristics outlined above will certainly help you understand this generation from a financial perspective. And this understanding should help you market to this elusive yet important part of your customer base.