For Reaching Gen Y, Your Product Is Your Marketing
Gen Y consumers are in a fundamentally different economy with a vastly different future than many of those who are marketing to them.
According to the Knight Frank Research and Citi Private Bank’s 2012 Wealth Report, not only will the U.S. not be the world's largest economy by 2020 -- overtaken by China -- it won't even be second by 2050, when India moves past both, and Gen Y consumers are in their 50s.
It's going to take quite a bit to convince a generation that has become more comfortable living at home to save money and entered a largely risk-averse job market to part with their money.
The fix to this situation for businesses -- other than a dramatic economic turnaround that even the most bullish economist wouldn't predict -- isn't marketing. The fix is creating better products built on value, clarity and bringing happiness.
Gen Y is a generation that values value. Apple and H&M, two of their favorite brands, illustrate this perfectly. Apple provides value by offering an easy to use, durable, well-functioning product in a personal computing market where that isn't the norm. It can charge a premium and still appeal to cash-strapped Gen Y consumers.
H&M offers low-cost, fashion-forward, disposable clothing that lasts for one season. Its value is in being trendy without having to overspend each fashion season. It is value in an entirely different way than Apple, but it still resonates with Gen Y consumers.
What does your service or product actually do and why do I need it? When you're strapped for cash or even just trying to be a bit more frugal, you're going to ask yourself if you really need the product you're thinking about buying.
It's important to not confuse necessity with clarity. No research has concluded that Gen Y consumers aren't buying things they don't need. However, we've seen huge companies go into decline recently that don't provide clarity.
For example, look at Amazon and Best Buy.
Amazon's proposition to consumers is clear -- get almost anything you want cheaper here than anywhere else. Best Buy's proposition is muddled. It's not really saving me any cash or time by having the option to buy a dishwasher and a DVD at the same time. I rarely -- if ever -- would need that type of convenience.
When you don't have a lot of extra cash to spend, companies need to make sure their offering -- or at least the experience of using it -- can potentially bring happiness.
Look at the Sync programs American Express has set up with Foursquare, Twitter and Facebook. American Express cardholders get discounts for liking a page, tweeting a specific hashtag or checking in at a store. It's a lot more enjoyable way to save money than clipping coupons and trying to make sure you have them when you need them and ensures that people use their American Express card.
This is a huge opportunity for banks, insurance companies and every other service industry that people usually complain about. Gen Y consumers have been taught to not expect that much from you guys, so it would be pretty easy to win their business with a few customer-experience-improving changes.
For marketers trying to reach Gen Y, it isn't necessarily a catchy tag line or "viral video," it's about showing these core elements or value, clarity and happiness to consumers in the right channels.