News: Consolidator Report
Millennials are taking over. It’s up to you to make this transition smooth and potentially more profitable. Are you up to the challenge?
Interested in tapping into the annual buying power that $600 billion brings? How about having access to the damaged vehicles that 80 million people in America could potentially bring you?
Let me introduce you to the Millennial Generation, also known as Generation Y, or those born after 1980. Not that any introduction is necessary; those of us from the Silent Generation (born 1928-1945), the Baby Boom Generation (born 1946-1964) and Generation X (born 1965-1980) are well aware of them. Boomers and Gen Xers are responsible for bringing this generation into the world and they, like our generations and all generations before us, will eventually be taking over. Scary? Maybe for some. It depends on what stereotypes and myths about Millennials you’ve bought into.
Stereotypes usually come from somewhere but can be embellished over time and overapplied as blanket statements. Consider the following ones that are often bandied about:
- Millennials are narcissistic
- Millennials are lazy
- Millennials were coddled
- Millennials are a bit delusional
Before you Millennials set out to kill the messenger here, know that these statements came from an article in the May 2013 issue of Time Magazine titled, “The Me Me Me Generation.” Time said, “Those aren’t just unfounded negative stereotypes about 80 million Americans. They’re backed up by a decade of sociological research.” As Millennials mature and start their own families, they’re getting tired of hearing these things over and over. They want to be given a chance to be treated fairly without being pre-judged. That being said, not all that Time reported was negative. They also had some good things to say, including:
- Millennials are open-minded
- Millennials exude confidence
- Millennials express themselves well (often online)
- Millennials are upbeat
- Millennials are open to new ideas and new ways of living
Whatever your personal experience has been with Gen Y, the fact is that each of these 80 million people are individuals who are your potential customers and job candidates. As business owners and managers, it’s our job to know our customers. We also have to know our employees because no two are the same. However, after interviewing more than a dozen industry leaders at the shop level, I found that the common approach to knowing your customers and employees is one-size-fits-all. One leader said, “We’re really old school in our approach, treating most everyone pretty much the same. We have never considered doing anything really any different.”
Millennials are the first generation that have always had computers. They’ve known nothing else. They were “participants” with a team, often didn’t keep score and got trophies for showing up. Their parents were deeply involved in their lives and often still are. September 11th had a significant impact on their lives. These young people saw their parents work hard, often long hours and weekends, and then saw the economy tank in 2008. Some families lost everything, filed for bankruptcy and were foreclosed on. If Millennials weren’t directly affected by these events, they almost certainly witnessed them. “Work” is not “life” for them because they’ve seen people lose everything in spite of the fact that those people worked hard and remained loyal to companies that faltered or took “cost-saving” measures. Why would Millennials want to follow in those footsteps?
Sociologists make a living studying society. They interview, poll, observe and experiment and then report their findings. Shouldn’t we, as business owners and managers, consider the extensive data that’s out there? It’s more than possible that doing so could make us more productive and more profitable. What follows is a report on the research that’s out there related to Millennials as customers and Millennials as employees.
Millennials As Customers
By the year 2020, it’s projected that Millennials will spend $1.4 trillion annually. Understanding these individuals and how they’re different is a must for business owners and managers.
In an article published on Forbes.com in January 2015, author Dan Schawbel, a Millennial himself, stated that businesses have been having a hard time connecting with Millennials. Why? Because their approach has been the traditional method of advertising and marketing and this simply isn’t working with Millennials. Schawbel partnered with Elite Daily on an in-depth study of 1,300 Gen Yers, and the research showed:
- Traditional advertising has no influence. Approximately 99 percent of Millennials said advertising had no compelling influence on trusting a brand. They don’t trust it because it comes from the business and therefore, in their minds, is not authentic.
- Cars “yes,” Homes “no.” Approximately 71 percent of Gen Y want to own a car rather than lease one, compared to 59 percent who would rather rent a place to live than own one. Sixty-one percent say they couldn’t afford a house even if they wanted one, mostly due to the recession of 2008 and the historically slow recovery since. Many Millennials still live with their parents, have extensive student loan debt (averaging $28,000) and are considered underemployed. They prefer to pay for things in cash than use plastic (which is a good thing). What previous generations used to do earlier in life, such as getting married, having kids and getting right into their chosen careers, Millennials are putting off till much later. But they still need to be able to get around town, so they do typically own cars.
- Peer recommendations are king. Millennials depend on peer reviews on sites like Google, Yahoo, Yelp, etc., more than anything else when making a purchase decision. They almost see leaving reviews as a requirement for their fellow Gen Yers and trust these reviews as being more authentic.
- Authenticity is more important than content. You must earn Millennials’ trust, so gaining that trust is important. Just saying who you are and what you do so well won’t cut it; they have to either experience it themselves or read about others who have. Humanize your brand and you’ll stand a better chance of coming across as authentic.
- Engagement with brands on social media is expected. If you engage a Millennial on your social media accounts, it’s more likely they’ll become loyal to your business, according to what 62 percent of respondents said in this survey. Just being there isn’t enough. Millennials are masters of social media and check their mobile devices an average of 43 times per day! You’ll have to seek to engage them, or get them to “Like” what you post, comment on what you post or, best of all, share what you post. So you need to know what kinds of things will pique their interest. Given what has been reported so far, you know it isn’t marketing or advertising messages. Better to be entertaining and enlightening.
- They view the world through a digital lens. Nearly all Millennials own seven to nine digital devices and actively use two or three every day. Their attention is fragmented between their phones, tablets and wearable devices (like Android watches and the Apple Watch). Be in tune with these devices, use them yourself and communicate with Millennials using them. They expect that you will. Be sure your website is “mobile friendly,” i.e. easy to see on a mobile device. And don’t produce coupons that have to be printed and brought in to be redeemed. Make sure these can be shown from their phones.
- They can become brand loyal. Build a strong relationship with Millennials, take good care of them and engage with them on social media and you’ll have a great chance of having a loyal customer who’ll share their experience with their peers. If they like your brand, they’ll like you.
- Be involved in your community. Perceived corporate greed or being in business just for profit doesn’t fly with Millennials. Three quarters of them feel it’s either fairly important or very important that a business give back to their community in some way, so get involved with your community and highlight it on your social media accounts. Personalize it with photos of you and your employees being involved. Your Millennial employees will love it, too.
Millennials typically don’t like to make or take phone calls, so if you’re calling them to give them updates on the status of their repair, you should consider taking a different approach. Messaging them on Facebook and Twitter or text messaging them works best. Ask your customers how they would prefer to be communicated with and be prepared to honor their request. Texting updates from your email account is really easy and effective, plus you’ll have a record of the communications. All you need to know is their cellphone carrier and mobile number. To email a text to them, put in their 10-digit number followed by the “@” symbol and the cellphone carrier’s extension shown below:
- AT&T: [email protected]
- T-Mobile: [email protected]
- Verizon: [email protected]
- Sprint: [email protected] or [email protected]
- Virgin Mobile: [email protected]
- Tracfone: [email protected]
- Metro PCS: [email protected]
- Boost Mobile: [email protected]
- Cricket: [email protected]
- Nextel: [email protected]
- Alltel: [email protected]
- Ptel: [email protected]
- Suncom: [email protected]
- Qwest: [email protected]
- U.S. Cellular: [email protected]
Millennials As Employees
As you might expect and have almost certainly experienced, engaging Millennials as employees is different than Boomers and Gen Xers. This may have caused you some frustration if you’ve approached things the same way you always have. This may have led you to believe that Millennials are lazy, uncoachable, inflexible, entitled, self-centered and devoid of loyalty. They don’t view business the same way you likely do. Work is just that to Millennials: a place to go, put in some time, get paid for that time and leave. They won’t be too keen on staying extra hours. They might even try to dictate the hours and days they want to work.
A shop owner in Northern Wisconsin told a story about a Millennial apprentice he had hired who worked for two weeks, then didn’t show up the following Monday. When called, this new hire said he had already made enough money to pay his bills that December and would be back the first of the next December! He actually said that. Perhaps if this shop owner could find another apprentice with the same mindset, he could hire that person, put the two on alternating weeks and have a whole employee! Ridiculous! But it illustrates the challenge that many are facing.
Facing the facts, as Boomers retire, Gen Xers and Millennials are the only ones left to get the job done. In 10 short years, Millennials will represent 75 percent of the workforce. Millennials stay at their jobs less than three years. New ways to engage employees will have to be taken. Millennials prefer to work in teams and like to be challenged. They prefer to have a balance between work and their personal lives. Demand too much (in their minds) and you’ll likely lose them. If they don’t like what they’re doing, they’ll be out of there so fast it will make your head spin.
Here’s a list of things you can do that will enhance your chance of success with Millennials:
- Provide frequent feedback, with specifics on what they’re doing well. The semi-annual or annual review process isn’t enough anymore – they need more engagement than that. Informal praise, given as close to the exact time when it’s earned, will serve an employer well. Millennials, who have played thousands of hours of video games, always know their health status during the game. Keep that in mind. Be personal and sincere.
- If providing criticism, use the “sandwich method,” starting with a positive at the beginning and end, with the critique in the middle. Be sure to explain how to do things correctly next time.
- Give them checklists of things that need to be done, then empower them to do it.
- Pair them with mentors who can effectively train them on the job. Pairing more than one with a mentor as part of a team works best.
- Tell the “why.” Millennials like to understand why you do what you do on any given task.
- Share a career path with them. Again, as in video games, they like to move up from one level to the next. Give them opportunities to take leadership roles where possible, while at the same time helping them continue to learn and develop new skills.
- Have high ethics and values. Those Millennials who are proud of where they work are more likely to stay and excel. Share your mission with them and how the service you provide enhances the lives of others. A full 90 percent want to use their talents and skills for good.
- Employee safety and health factors must be front and center.
- Offer flexible work hour opportunities, with an agreed-upon total hours to be worked each week.
- Provide in-house gym equipment, a video game-supplied breakroom, ping pong table or other such things for break and lunch time. More frequent breaks will make for more productive Millennials.
- Have an ongoing, company-wide community outreach campaign for Millennials to participate in. Have them help identify the cause and plan the activities, including the social media coverage of it. Consider paid volunteer days to reward them for their dedication to giving back to the community. They’ll eat it up!
Effectively training Millennials into entry-level positions requires a new approach, too, something we’ll write about in much greater detail in a future issue of BodyShop Business.
It’s important to note that Millennials are actually having an impact on their parents when it comes to choosing a product or service. Parents are mimicking the digital prowess of their children and are now looking for reviews and engaging in social media more than ever before. Who knew? As a result, advertising and traditional marketing is starting to fall flat on Gen X and Boomers, too.
Millennials are gaining more and more buying power every day and are the most optimistic generation about the future and their place in it. Understand them. Adjusting your “one-size-fits-all” approach to customers should serve you well.
Employee turnover comes at a cost of up to 150 percent of the employee’s annual wages, so following the suggestions in this article should help you retain more Millennials for longer periods of time. But the days of employees staying loyal and serving one employer for 10 to 20 years are nearly unrealistic with Millennials, so smart businesses should have an ongoing employee recruiting and development program in place.
Millennials are taking over. It’s up to you to make this transition smooth and potentially more profitable. You have to ask yourself if you’re up to the challenge. If not, someone else will be. Good luck!