Millennials, The People You Should Boldly Focus On
By Linda Heuer
I’m not starting this article with a quirky antidote, a catchy tagline or a humorous story because Millennials buying power of over $3 Trillion dollars, is no laughing matter.
The fact is, if you are not paying attention on how to market to Millennials or how to hire them, you are likely to fail at whatever business you are in. If you are not keeping up, you will be left behind.
Millennials are among the most educated generations in the history of the world as we know it.
The U.S. Census Bureau expects in 2019, the Millennial population of 74 million will have overtaken the Boomers generation by more than 2 million. In just ten short years from now, Millennial’s will out shadow Boomers by 10 million. That’s a big number if i may say so myself.
So, paying attention and knowing your audience is crucial when it comes to Millennial’s. How they interact, how they connect and how they make purchasing decisions differs from previous generations.
Let’s take Millennials and their pets for instance.
Currently, Millennials are 25% of the U.S, population. 82% of Millennials say buying a home is a priority. Millennials are now the largest demographic of pet owners owning 35% of the current pet population.
Take into consideration that seven in 10, or if you’re a percentage person, 73% of Millennials own a pet—more than half (56 percent) are dog parents while 36 percent are cat parents.
I say parents because most Millennials refer to them as their, fur baby, starter children, and so on.
Most Millennials (67 percent) see their pet as part of the family and one-third of Millennials surveyed actually choose restaurants based on if they will allow them to bring their pets.
One of the most interesting highlights from the survey was that Millennials expect to spend more money on their dogs over the course of the pet’s lifetime than they do on their own lifetime health care costs. And seven in 10 Millennials (68%) would choose an employer who offers time off for a sick pet if it was offered as a perk.
According to Realtor.com, 89 percent of Millennials who bought a home so far this year own a pet. Now, if you’re a real estate agent, you need to pay particular attention to this statistic…79 percent of pet-owning home-buyers who closed on a property this year said they would pass up an otherwise perfect home if it didn’t meet the needs of their pet.
Having a place at home, or close, to wash their pet is a huge deal. Some will even purchase a new home just so they have separate shower for their dog. Dog park location, easy access to pet supplies, yard size, sliding patio door vs. one with a handle, screen vs. no screen, too many steps off the porch because of icy winters, 24-hour vet care location, all huge considerations.
That’s why it so important to know your audience! Imagine the time and money a real estate agent or business owner could lose by not understanding what is driving purchasing decisions.
What do Millennials like?
50% of Millennials prefer to purchase from a company who supports a cause. 37% of Millennials will even pay more if it means supporting a cause they believe in. Overall, Millennials feel obligated to do their part to make the world a better place, and we believe that they can.
So, doesn’t it make sense to pay particular attention to this demographic? 74 Million people with over 3 Trillion dollars to spend.
Everyone who is trying to increase their revenue knows you must pay particular attention to “Star Ratings and Reviews” on sites like Yelp, Google and Facebook. Why? That’s easy, because 70% of Millennials feel compelled to share feedback both positive and negative whenever they interact with, well – Just about everything…
Not keeping up with the needs and wants of 25% of the current population is just not smart business.
If your company isn’t utilizing social media properly, Millennials either won’t find your business, or they will think you are irrelevant. Millennials want transparency. An open and honest relationship whether it be with their manager, co-worker or the places they do business with.
Help yourself and your business by understanding that Millennials don’t just want to buy things, they are going for the experience. Being frugal and living a minimalistic lifestyle is the new cool, except of course, when it comes to their pets or an experience.
Why? How did we get here?
Here’s the condensed explanation…When I was a kid, I remember my mother ordering my fathers new, heavy duty, work coat from a paper catalog. I remember looking at that Fall catalog and dog-earing specific pages in hopes that my mother would get the hint that something on that page was “the something” I wanted for Christmas.
Why was I looking at the Fall catalog? Because back then, it would take 6-10 weeks after you had actually filled out the form, placed a check in an envelope, went to the post office to mail the envelope, the postal service would deliver the envelope and a person at a warehouse would open the envelope…you get the idea. It just took time to get what you actually ordered…and we expected that.
Gone is the experience of waiting. Millennials have no such memories of waiting for anything. In a nutshell, Next Day Shipping & Download Now happened.
Don’t get me wrong. I Love the fact that I no longer have to go to the store and buy a 45 Lb. bag of dog food, load it up into the car, drive it home and hoist it from the car into the house. Every month now, as if by magic, that 45 Lb. bag of dog food automatically shows up on my doorstep and all I have to do is pay my credit card bill every month and it just keeps happening! Month after month after month….aaah, the joys of life.
Millennials, on the other hand, have historically not been such fans of credit cards. The majority are extremely afraid of debt and are still working themselves out of their student load debt. They have been tagged as “credit shy.”
The good news is that’s changing, they are getting over that fear.
Millennials are understanding that they have to build their credit scores to purchase the house they want, to move into a more accommodating upscale apartment, to replace their college car, etc. All of these things require a good credit rating and without a credit history, they cannot achieve those dreams.
The question is, what type of credit cards are they applying for?
Obviously, with all of the commercials and online pop-ups, Millennials are aware of rewards cards. Amazon for instance, offers a rewards card that allows you to easily spend the rewards you made from your last purchase on your next purchase. It’s right there on the screen when you check out, already calculated and there is no thinking required on your part, which is nice since most people love to take the path of least resistance.
Last year 29 percent, or 1 in 3 people applied specifically for rewards cards. Millennials, however, that percentage increased to 78 percent. What that means is, the higher the rewards card, the higher the interchange rate the credit card companies charge the merchant, which can negatively impact your business.
Why do Credit Card companies do this? Because, they are in the business of making money, not giving it away and this is an effortless way for them to automatically recoup a substantial portion of their expenses, while still looking like a nice guy and remaining competitive with the other brands out there.
This could also mean paying higher fees to your Merchant Services provider. Some providers charge higher processing rates for businesses processing Non-Qualified card transactions. You might see this in a Tiered pricing structure for example. You might be asking yourself, why is that? That’s what we were asking ourselves when we got into the consulting business and what we found was that many Merchants are completely unaware of what they are paying because the billing can be so confusing.
As an example, you may see an EIRF fee on your statement, thinking it’s just one of those ordinary charges. Although the EIRF can be an avoidable charge, more merchants than you think are paying this commonly misunderstood fee.
Most business owners just give up trying to understand their processing rates and pay them assuming the rates are just a cost of doing business. Kind of like the way people just pay their cell phone and cable bill even though we don’t fully understand them, we do it because we believe it’s something we need for an enhanced quality of life. This creates an environment where you could be paying unnecessary fee’s or higher rates than are necessitated.
98 percent of Millennials use a smartphone. 26 percent of them currently use apps to pay for those purchases. These P2P payment apps are extremely convenient, and this generation is hooked on convenience. If you do not have an up to date machine, you are going to lose those transactions. Especially impulse buys and larger ticket items since Millennials tend to carry low amounts of cash and detest paying ATM fees in order to get their own money.
When companies we consult for are shopping for a Merchant Services Processing company, we recommend choosing the plan that is best for their business. Just because a product such as Square is good for your friend’s business, doesn’t mean it’s the right product for your business. In fact, choosing the wrong type of plan can have a devastating impact to your company’s profitability.
Some companies, especially those who process a high number of Non-Qualified/Loyalty cards benefit by being on a “Cost Plus” pricing structure combined with up to date equipment that allows the merchant to accept mobile payments. You get the picture, the equipment allows you to meet the needs of your customers at a lower cost of doing business.
To break it down, the “Cost Plus” structure means you are paying a flat fee on top of interchange, regardless of the type of card a consumer presents. This also benefits you as a merchant because if Visa or Mastercard lowers their rate, as a merchant, you receive the discount.
Companies that are averse to accepting Credit Cards or who don’t process much, may benefit by participating in a Cash Discount program.
Each merchant processing program is different…..some allow you to be more flexible with your customer base than others. Some allow you to add loyalty programs to your offerings and some don’t, so choose your plan wisely.
In short, as the Millennial demographic increases, so will mobile payments, growing your business for the future is dependent on paying attention and doing your homework. You’ll need to know how to target your advertisements to reach your future audience and how to recruit them and how to manage them, etc. In short, know your audience.
We work with merchants across the United States helping them understand how to increase the profit margins, how to invigorate their workforce, you name it. If you’d like a little help with this subject, please feel free to reach out, we’d love to help…..that’s our passion.
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