“I need to focus my marketing budget on more lucrative market segments.”
“Teenagers, college students and young adults in entry-level positions do not have any money to spend.”
“I’m not in the electronics or music business, so I’ve got nothing to sell to today’s young people.”
“I don’t understand customers under the age of 30.”
These are hypothetical reasons many owners of small businesses have given for ignoring “Generation Y” – the market segment of consumers born between approximately the mid-1980s and 2000. However, these assumptions miss a fundamental reality. While some members of Generation Y are still too young to have their own disposable income, this segment represents a tremendous amount of current and future buying power. For example, 42 percent of teenagers have a debit card and 33 percent have their own checking account, according to the recent Schwab surveyon “Teens and Money.” College students are in the formative years of developing spending habits and preferences.
Small businesses in particular are well positioned to capitalize on this growing market for the following reasons:
Small businesses are approachable. Research shows that people under the age of 25 prefer the personal service and homespun feel of most small businesses. They are attracted to quirky, unique products and services that express their individuality. If those products are green or organic, even better. Generation Y is not interested in what their peers and neighbors have. In other words, their mindset is the opposite of the “keeping-up-with-the-Joneses” attitude prevalent among their parents. It’s all about individuality.
Small businesses are social. Small businesses may be especially well equipped to communicate with young consumers through modes they prefer – social networking, mobile marketing and local events – for a variety of reasons: Small companies can speak to young people in their own “language,” using a less polished, more up-to-the-minute tone in comparison to how most large enterprises typically do. They can create immediacy by marketing a sale or special event that young customers can respond to in real time. And they can have more intimate and meaningful two-way conversations with customers via Facebook fan pages and Twitter. Small business will find that if you offer an experience or product worth discussion, Generation Y customers will do some of your marketing through word-of-mouth.
Small businesses listen. Young people do not respond well to most traditional marketing but tend to engage better in conversations with companies that demonstrate they understand their needs. They are apt to develop loyal relationships with companies and brands that express the desire to hear them and are able to customize their offerings accordingly.
If you decide to engage with Generation Y, here are some tips to keep in mind when talking to a segment that accounts for $43 billion of U.S. spending power.