Why Local Brands and Small Businesses Are Losing Opportunity in the Age of Millennials

  • Posted on: 11 May 2014
  • By: LMP

I have been in the media and publishing business for at least a decade. I have taken a lot of time to pay attention to trends and analysis of customer behavior and attitudes and have poured over mountains of data pertaining to the subject. I have written for some of the top companies and organizations in the world including IBM, Hearst, Fortis, Western Digital and the United Way Worldwide. I also spent a year in the market research field. I have also been working with local companies and brands over the last four to five years as well, attempting to break them from the bondage of uneducated risk aversion. My experience thus far paints a very grim picture for local markets and for two very important reasons:

1. Local businesses do not understand how to adapt to changing customer expectations (and rarely make an effort to)
2. Local businesses are not developing enough meaningful customer relationships (failure to think long-term)

It is my opinion that part of the problem comes from simple prejudice. Let me give you two examples, as well as some alternative advice on how to improve relationships with customers.

Avoid Being Exclusive
I recently went to an art show that featured a wonderful exhibit from a photographer at a local gallery. My wife and I, both 29 years old, attended the event and both of us felt very awkward, even though we enjoyed the art and the food. It was the people in the room that were the problem. We both knew we were the youngest people in the entire gallery so we felt out of place immediately. Keep in mind that I am, in fact, an artist myself and have been to the Walker Art Center, Minnesota Museum of Art and Natural History and a number of other high profile, world renowned art centers on numerous occasions. Those art galleries were always full of young, hip and interesting people between the ages of 20 and 40 years old (Millennials) in addition to a variety of other ages of people. As I looked around the local art gallery, I noticed there were several older people at the event, which is great, but none of them seemed particularly enthused that a young couple was there at the event. In fact, it seemed as if those same people made a point to avoid us. Because I know the folks at that particular art center, I couldn't hold it against them, but if I were a visitor I can tell you with certainty that I would never come back because I wasn't made to feel comfortable at all. This is not an isolated event, either. I have noticed the same pattern of exclusiveness at all of the local art centers in Southern Minnesota. I don't know what their intentions are, but to many people, including poor people, minorities and young people, it feels as though the art centers are only for rich white middle-aged/elderly people. This does not bode well for organizations who claim that they are interested in enhancing their communities with art.

Lose Your Comfort Zone
In a marketing visit, I also recently spoke to a business owner who went on to tell me that they do not see the value in advertising to Millennials because they don't generate enough business. I was curious, so I asked him why he thought that was. His belief was that people of my generation want something for nothing. I asked, "Who doesn't and how did they get that way?". He didn't have an immediate reply. Perhaps this seemed persnickety, but I then asked him how he thought they felt about his business. Unsurprisingly, he didn't have a clue. I asked him if he'd ever taken the time to conduct a demographic survey that might indicate why Millennials didn't want to spend their money there. He had not. I then asked him if he treated them the same way he might treat a customer closer to his own age. After thinking about the question, he finally conceded, "Well, I guess I just have more in common with someone my own age, so it is a bit easier to talk to them about things other than just strictly business." I suggested that he hire someone that does feel comfortable striking up a general conversation with younger folks. I'm sure you've heard people say, or maybe you've said yourself, that people used to talk to each other more. Now people just stare at a phone or a computer. I have good news. Young people like to have conversations with people too! Their conversations are just different, and rightly so. Millennials have a much different outlook on the world and that impacts how they make decisions. Blaming the consumer for not behaving the way YOU expect them to is the best way to cut off future years of business to the people that are buying their first home, their first car, their insurance, their fitness membership or even a fancy dinner with their fiance. So how do young people want to feel? In one word: IMPORTANT. They want to know that you give a crap. If you don't, then they'll turn to someone who at least has the appearance of caring. Unfortunately, if enough young people feel discarded by people who appear to think they are more important than they are, then they will have no incentive to support their own community either. Is it surprising that MTV and McDonalds have more influence on young people than the local businesses in their own communities? I have been paid to influence them on a large scale, so I already know the answer to that question. You must build trust. Remember, in a world with seemingly unlimited choices, why should they choose you?

Like it or not, these people are the people who consume your goods. But they want more than just an artificial business relationship between product and consumer. They want their purchases to reflect who they are as a person. The most sophisticated brand marketers in the world understand this and it is their job to keep Millennials buying their products over yours. How? They offer them an experience and the promise of a better image. The only problem is, they can't actually make good on those promises. But you can. So do it. Find the youngest employees you have (and if none of them are under 35 years old, you have you have real problems) and ask them what the best strategies for marketing are and follow that advice. Companies like Jack Links, State Farm Insurance, GEICO, McDonalds, Coca-Cola, Pepsi, Esurance, Apple and many others are already growing their businesses with unbelievable gains by implementing these strategies. Why aren't you?

Organizations and businesses have a comfort zone problem. This problem became extremely apparent to me as a newspaperman. As a former reporter and editor, I became incredibly disheartened by the efforts of those in charge to preserve the old ways and complain constantly about change. Let's just take a look at how some of the large industries have fell into this trap and what we have learned from it:

1. Major American automobile manufacturing industry ignored consumer demands for more fuel-efficient vehicles, which led to an opening in the marketplace for cheaper, more reliable Japanese imports

2. Newspapers continue to print and package a product that is literally antiquated and has been done the same way since the 1800s. Furthermore, they ignore media trends that continuously suggest that there is no longer a consumer price model for basic content (newsstand price). Successful independent publishers continue to thrive publishing free content that is advertiser supported because they reach more people with rich content that is actually relevant to their lifestyles (Consider that Google is now the largest advertiser service worldwide with their targeted ads). The Internet has enabled publishing to become more streamlined, independent and user friendly, and to cultivate communities more easily.

3. The music industry has lost billions of dollars trying to preserve an outdated business model that rewards those at the top for producing practically nothing. This led to mass piracy and a loss of empathy for the artist (especially commercial artists) as well as an opportunity to enable companies like Apple, Amazon, Rhapsody, eMusic, Spotify, Pandora, Grooveshark and TuneCore to create sustainable digital models of business. Unfortunately, the artists, who actually produce the goods, have yet to really benefit from this model significantly. The film and television industry, on the other hand, made very smart decisions about digital streaming and delivery and are reaping the rewards through Hulu, Netflix, Red Box and others.

Consumers Are People
Being in business locally means that your business should offer something that a multinational corporation can't: community appreciation. If your customers don't feel appreciated locally, then your business is no different than Wal Mart or McDonalds and you have lost your competitive advantage already because those national Fortune 500s WILL do it cheaper, faster and friendlier than you because they know how. Most of them dedicate up to 30 percent or more of their operating budget on marketing alone. Most of the consumer marketing is targeted at 20 to 40-year-olds. Much of it involves long-term marketing up to five years or more. They generally hire contracted professionals such as myself to handle the workload on a mass scale. Local businesses (mostly operated by young professionals) are now taking advantage of content marketing, community building and brand advocacy, as well as social entrepreneurship.

So remember, the next time a 20-something man or woman approaches your business, treat them with respect, an open and friendly attitude and listen to them. Pretty simple, huh? They might not buy today, but they may never buy from you if they remember how belittled they felt the first time they came in. Always consider the future and never settle on what's comfortable just because that's always the way its been done. Also, think about why you started the business in the first place. Was it because you wanted to do something better than your competitors or because you wanted to do it the same?

Tags: 

Lawson Media Blog - LMP Southern Minnesota Media Blog