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Generational Marketing is a Way for Brands to Better Target Customers
Marketers have always needed a way to segment current and potential customers in order to target them most effectively. For years, standard demographic age cohorts were the norm to quantify the number of people marketing and advertising reached in the 18-34, 25-45, or 45-54 demos.
More recently, businesses have looked to generational marketing approaches to better define these cohorts. Rather than simply grouping people by age range, generational cohorts label populations according to birth year. Identifying the many cultural, political, technological, economic, and social events and developments that occurred at the time someone is born can shape the way that individual thinks, behaves, and spends as they age.
Generational naming began at the start of the 20th century. Gertrude Stein coined the term, “Lost Generation” for those who came of age during World War I, and it was later popularized by Ernest Hemingway in his novel, The Sun Also Rises.
The group of Americans who would serve in World War II were initially called the G.I. Generation but later nicknamed the Greatest Generation. The generations that followed are classified as follows, according to Pew Research:
- The Silent Generation – people born between 1928 and 1945
- Baby Boomers – people born between 1946 and 1964. Baby Boomers are the only generation officially designated by the U.S. Census Bureau. The reason the Census Bureau included definitive dates on the Boomer generation is due to the significant uptick in the birth rate following World War II.
- Generation X – people born between 1965 and 1980
- Millennials (at first named Generation Y) – people born between 1981 and 1996. President of the Pew Research Center Michael Dimock was the person responsible for capping the end of the Millennial generation in 1996
- Generation Z – people born between 1997 and 2013
- Generation Alpha – people born beginning in 2013. As of yet, there’s no set birth year cutoff for Generation Alphas
Why Are Marketers So Interested in Targeting Millennials and Gen Z?
The main reason why brands are attracted to Millennials and Gen Z as customers is because both generations represent tremendous spending power – now and in the future.
Spending for Millennials and Gen Z is now 125% of what it was before the COVID-19 pandemic, and businesses see them as significant contributors to the economic recovery.
Even during 2020, Millennials were the highest-spending generation and are projected to have $68 trillion in income in 2030. Although Gen Z doesn’t currently have as much purchasing power because this generation is just entering the workforce, it’s expected to hit $33 trillion in income by 2030 and surpass Millennials’ income the following year.
Companies are also preparing to better target newer cohorts as Baby Boomers and the ageing populations of previous generations are decreasing in numbers. Members of the Silent Generation now represent only twenty-two percent of the U.S. population, Baby Boomers represent seventy-one percent, and the Gen Xer cohort accounts for sixty-five percent.
Seventy-two percent of Americans are Millennials – slightly edging out Boomers – and Gen Zs represent sixty-seven percent. Combined, the population of Millennials and Gen Zs is 140 million people.
Although the two generations are similar in some ways, they differ in how they view brands, the ways in which they shop, and how they spend money. Businesses must learn how each generation thinks and behaves before they can market effectively to them.
What Defines the Millennial Generation?
The events that significantly shaped the Millennial generation include the expansion of the internet and social media – and the Great Recession of 2008.
Plagued with student debt, many in this generation have put off major expenses like purchasing a home, and seem to prefer access over ownership. That’s likely why they are fans of streaming services like Netflix rather than cable TV subscriptions. But even though they may face money problems, the Brookings Institution found they’d rather make less money at a job they love than a much larger salary at a job they thought was boring.
Millennials trust brands less than earlier generations, but that doesn’t mean a brand can’t win them over. They tend to be less suspicious of brands than Gen Z, but demand superior customer service in exchange for brand loyalty.
How Should Brands Market to Millennials?
Millennials’ insistence on superior brand quality makes brand reputation and positive reviews essential when considering a purchase. Positive experiences with a brand can encourage brand loyalty.
They prefer brands that are familiar, trusted, and have a consistent brand identity – like Amazon, Apple, and Nike. Brand marketers should strive to maintain consistency in all of their online and offline messaging.
Considering that eighty-four percent of Millennials distrust advertising, it’s vital that brands connect with these consumers in other ways. Authentic and engaging influencer marketing is the key to making them feel more comfortable about a purchase, along with content marketing that provides the information this generation needs to feel that they can rely on a brand to provide the experience they desire.
If brands want to target Millennials on social media, the best social networking platforms to reach them are Facebook, Instagram, and YouTube.
What Defines Gen Z?
According to the Pew Research Center, Gen Z is the most racially and ethnically diverse generation. They also tend to be progressive when it comes to social and political values, as are most Millennials. Both of these generations are also concerned about climate change and value products that are ethical and sustainable.
But Gen Z is much less idealistic than Millennials. This post-Millennial generation has witnessed the financial struggles of their parents and are more likely to have been impacted first-hand by the economic downturn during the COVID-19 pandemic. More than half of the oldest members of Gen Z said that someone in their household lost a job or had to take a pay cut during the past year. That’s significantly higher than members of earlier generations.
Another shaping force for Gen Z is technology. Digital natives, they’ve had access to smartphones and tablets from a very early age, and their time spent on mobile devices now averages three hours per day.
Along with being more pragmatic than Millennials, Gen Zers are also less likely to trust brands. They’d rather be authentically themselves than defined by any brand.
How Should Brands Market to Gen Z?
Probably the biggest obstacle for luring Gen Z is its distrust of brands. Just like Millennials, they don’t like advertising and find it disruptive.
Businesses can try to overcome distrust by communicating in ways that demonstrate authenticity. Influencer marketing can be especially effective for this generation, but the influencers must align with this audience’s ideals and values. They’re most likely to be swayed by influencers who resonate with them and seem like regular people – not celebrities or polished brand advocates.
Because Gen Zers prioritize saving money, they’re going to be more interested in offers that include deals or long-term investment potential. Additionally, any way that brands can help this generation learn to avoid debt and secure their financial future will go far in developing trust.
Gen Z loves social media and spends almost an hour more on their favorite channels than Millennials. Brands can reach them on Instagram, YouTube, and TikTok. But along with social media, Gen Z also likes email marketing because they have the freedom to opt-in or opt-out of content.
To Get Through to Millennials and Gen Z, Brands Must Understand How the Generations Differ From Each Other
Ageing populations are causing marketers to turn their eyes toward the youthful population represented by Millennials and Gen Z.
It may be tempting to view Millennials and Gen Z through the same lens because they share a lot of similarities. But the brands who can identify how each generation is unique – and then speak to those differences – will have the most success in earning their business.