May 23, 2016
Take 3, Scene 7: Understanding Millennials, Part 2
On the second part of Scene 7, 3Pillar's Arty Rivera and Don Hiles join us again in the studio to continue their conversation on millennials. Millennials, sometimes known as Generation Y, are a subset of the population that are currently directly impacting the workforce.
- Arty and Don continue their discussion of their research methods, and give an in-depth explanation of the results yielded by their practices
- The two of them provide advice for businesses potentially worried about Millennials entering into the workforce
About the Guests
Arty Rivera is a Senior User Experience Designer at 3Pillar, where he applies the principles of design thinking to conceptualize engaging and valuable user experiences.
Don Hiles is a Senior User Experience Designer at 3Pillar and he has a strong background in end-user communication and needs.
Read the Transcription
Julia Slattery: You both were talking about your research and the research methods that you used. What patterns did you discover through using these methods?
Arty Rivera: Let’s start with the basic facts. These aren't ones that we found, these are ones that are available. The facts are that millennials are early adopters of technology, they subscribe to the idea that useful is the new cool, and they make up 21% of consumer discretionary purposes. These were the demographic data points that are non-life-stage-specific, but nonetheless very relevant and the reason that businesses are interested in millennials.
Moving beyond the more monolithic aspect of this, some more specific things include that trust came up as a very big issue. It's very difficult in general to get millennials to trust a brand, or at least it takes more time or more effort or more targeting than was necessarily the case with previous generations.
The other patterns, which we started mentioning before, were the life stage groupings – so Precollege, Continuing Education, Work-Life Integrators, and the Moving On Up. Those were the segments that we found that had some kind of behavioral element to them where we could – it's always tricky to say predict behavior, but where we could make educated guesses about their choices, whether it's consumption choices or media consumption choices or product consumption choices.
Don Hiles: We also talked about the formative events that shaped how we came up with these life stages and why we went with this concept. We can actually talk a little bit about the defining events as we had basically three major groupings. The first was the adverse events in the world or at least the big ones: we have 9/11, Hurricane Katrina, and the Iraq war, which leaves the millennials segment to be very risk-averse, self-reliant, and environment-minded. Our second grouping is really around the globalization, and particularly the globalization of finance, which is driven a lot by the globalization itself and the Enron disruption; this leads millennials to be very success-driven, entrepreneurial, and to demand transparency. Then the third one is a really the biggest bucket, which is the massive technology changes that have happened in this generation; this leads to tendencies or behaviors of instant gratification, extreme tech savviness, and the demand for flexibility and personalization. So when we are talking about those and we mention the motivations, fears, anxieties, and relationships, all of those statements come back to being based around these formative events that have occurred that lead to a particular behavior.
Arty Rivera: I'm going to add a detail to this – looking especially at those millennials whose lives were defined by some of the adverse events that we talked about, especially the ones that took risk aversion from that as an example of how that can apply directly to a business. From the sources that we had that addressed the financial industry specifically, millennials actually save more and invest more conservatively relative to earlier generations. This indicates that the way they see trust is different in that previously, understanding that you were becoming part of a large institutional brand indicated safety or indicated some kind of confidence in the institution, whereas for millennials, to use a very broad generalization, to gain trust means to be more personalized. It actually helps to be a little bit informal, to use the expression “real,” it builds more trust with a millennial consumer, especially in the financial space where there have been some prominent examples of large institutions not in fact being trustworthy at all. And for many millennials, that was actually one of the first pieces of financial news that they would remember as news consumers in general. So that's going to affect the pattern for how they consume services in that space, and that's very much a behavioral pattern.
Julia Slattery: So throughout all of this research - you two being millennials yourselves - how did you manage to remain objective when you were discovering all of these things?
Don Hiles: That was probably one of the first things we had to focus on. It actually came in handy in the beginning when we could look at the picture out there and be able to ascertain what should we seek out, and it helped us identify some sources that we were going to go deeper into and other ones that we were not going to focus on. Then as we were doing the research to specifically address bias, we had already came up with a good way to handle that during the workshop. Arty, if you want to go back and talk a little bit about what we did to address making sure we were staying objective in the workshop?
Arty Rivera: Sure absolutely. So one of the exercises that we did, not just between us but with the participants in the workshop that we had mentioned, is this concept of mind mapping. Mind mapping in principle is just a large piece of paper on which you write down a concept that you are mind mapping about in the center and you randomly associate different words and concepts as quickly as you can. You're potentially building a visual concept tree, like it's a spoken branch thing where you are branching further and further out. So you are seeing what ideas and concepts are in your mind associated with what you have in the center, and the point of it is to do it as quickly as possible so you actually don't have time to think and filter out your thoughts. Obviously the faster you do it and the better moderated or facilitated it is, the more genuine the expression is. The point is not to think about like “Oh, what are other people going to think of my mind mapping?” The entire point is just to lay it out as quickly as you can.
So we did an exercise like that for ourselves even before the workshop. When we were looking at research, we wanted to figure out what were our biases, what were the things that – of course we'd consumed media that talked about millennials before, so we wanted to see okay, which one of those concepts had stuck, which ones didn't. And generally, just being aware of what those biases were in combination with the high standard that we used to look at the sources that we were looking at helped us.
And so, I think we may have talked about it briefly before, but the idea was we tried to exclude op-eds as much as possible and the posts that talked about angst about millennials in the workplace and different working environments. First off, they didn't seem to have a lot of data backing them up, but second of all, our focus tended to be more around millennials as consumers and customers, not millennials as new employees. That just wasn't part of the focus that we were doing. There are conclusions that you can find in the data because we were looking at them as people as a whole of course, but when we started focusing in more on behavioral patterns, it was around consumption and buying and things like that.
So to tie that back, that helped us be a little more objective because it was a little less personal, it was a little less about “Oh, am I engaging in the behaviors that this study says that I do here in our workplace?” We have tried to avoid naval gazing as much as possible. Obviously, there was some reflection in this. There were great articles about trends – UI and usage trends, for example, and web and how millennials use different tabs. One of the things that we found was that people associate information overload and consuming a lot of information with millennials, but when they say millennials, they just mean younger people, and that's not necessarily a pattern. It wasn't about younger people, it was about Internet power users, and millennials are not the only Internet power users that exist. So generally trying to stick to the data and trying to steer clear of opinions about workplace culture and that kind of thing was how we did our best, as our main objective.
Don Hiles: And I think another key here was it wasn't a single researcher running off and trying to plow through as much research as possible. There was a lot of collaboration, a lot of discussion back and forth on “Is this a good source for us to use; this is what I thought about it, what did you think about it?” We had a lot of discussions around our lines of thinking on certain articles, making sure we were being objective and if we had subjective feelings on a viewpoint or article, analyzing them to see if they were useful to the research or not. And if not, then it was time to move onto a different piece.
Julia Slattery: All of your research is obviously culminating into something, so how should businesses prepare for millennials? Or should they start moving on and worrying about Generation Z?
Don Hiles: I think that businesses do need to prepare for millennials, as Arty and I have been talking about. A lot of it comes back to some of the things that we've mentioned already, primarily the purchasing power and I think moreso going forward, is you are going to see millennials moving into positions that include business-to-business buying as well. But I think really what it boils down to is moving back to our framework and really understanding the motivations, anxieties, fears, and relationship goals of millennials. And then, Arty can probably expand on this, making sure you have clear defined business goals and objectives and then mapping those to different life stages or what you would like to accomplish with your own brand.
Arty Rivera: So I’ll speak to businesses that are looking to prepare for millennials or adapt their product strategy to millennials. Obviously I'm kind of building a strawman, because it depends on the business. But if a client were to use that language and say I've mentioned millennials, we want to figure out what we're going to do to get them interested. One of the first things that would pop into mind, especially after this research, is which millennials are the client talking about and why do they want to focus on them. The obvious answers of course are the percentage of discretionary purchases that they make up and all the rest – I mean they represent or at least the artificially segmented ages represent a lot of spending power, sure. So it makes sense from a 30,000 foot level to focus on people that have money to make money. But if you are trying to put out a product - whether it's in finance or in media, whatever it is - the way that your product touches or affects your customer is a lot more than just the amount of money that they have. So understanding why, like how the focus on particular sets of customers relates back to their business goals, is kind of the first thing that they need to do before they even say “Hey, we want to focus on millennials.” Okay, move it back a step: why, how does it relate to your goals, and based on your goals, which segment of millennials makes the most sense to focus on, whether it's because of early adoption or because of certain life circumstances that make a user or a customer more open to the particular product or service that that company is offering or looking to move into.
Don Hiles: To piggyback on that and to pry a little bit about a concrete example, a key thing of why we say to focus on a life stage is that you really want to take - particularly if you are marketing to millennials - a holistic view because their needs change in the different life stages, but they are still going to remain the same person. So if you are a brand and you have certain goals, it’s helpful to know about these different life stages. Let's take, for example, Continuing Education and Work-Life Integrators. In Continuing Education, the majority of these millennials have just finished schooling and have a high amount of education debt, but they are still very passionate about their causes. So engaging millennials at that stage and really linking them into your product or your service, would really help you when they cross their own personal threshold into the next stage where their income and purchasing power jumps at almost triple or sometimes even increases by tenfold. So now you have a millennial who may be very invested in your brand emotionally but not financially. Once they move into their next life stage where they have dealt with their educational debt and suddenly have freed up a large amount of this discretionary purchasing power, now you have the opportunity to also get them to invest financially in your brand.
Arty Rivera: Let’s look at a specific example, which Don was already starting on. Let's say that a client already looked at their business goals and said “Okay, we know that we are looking at Work-Life Integrators (so people who are already employed and have some sort of income coming in); what can we do to make our product or service more interesting to that segment?” Once we've gotten over that framing issue, what can we do?
When we are looking at the Work-Life Integrators, the pithy phrase that we used to sum up their motivation was “I want to be connected to the world.” So a question that a company looking to encourage Work-Life Integrators to buy their products might ask is “Do you connect your audience with the causes that they care about? What are the different ways that you can do so?” Obviously, the way you can do so are different if you are a media company than if you are, I don't know, a toilet paper brand or something like that.
Let's use those examples though. If you are a media brand, a way to connect your audience to the causes they care about ss through your content strategy or specific ad placements that you have; there are a couple of different channels that you can use to work that out. If you are – to use the oblique example – a toilet paper company, one of the things that you can do (which has been done before) is set up campaigns to say for every unit that we sell, we are donating to X cause or were going to be donating to the cause of your choice and setting up some kind of web portal or Facebook group or something like that to do that. This is pulling some stuff out of a hat, obviously, since I don't have a client in front of me. But those are solid examples of what it means to ask the question: “How do we connect our work life integrators to the causes that they care about?” and then develop product concepts from that.
Don Hiles: That's really why we want this life stage approach because we can create these actionable segments where you can look at not just the portrait that we set up, but also have those phrases and be able to create those discovery questions. This lets clients learn not only about millennials, but also about their business and their needs and their objectives and what they have to do in order to capitalize on these new opportunities that may exist.
Arty Rivera: So moving back from the segmented framework that we are looking at, we also started to identify some mega patterns - which again, use with caution because it’s always going to depend on who exactly you are trying to attract. But across the data that we saw on this generation, the trust issue that existed here was really big - understanding what trust means for the group that you are trying to get to trust you. Obviously it's going to be important to figure out how do they build the trust, how is trust built for them. One of the examples of identifying that pattern, we found that word-of-mouth is really important to a lot of millennials. That, for example, millennials are very interested – you know what, I will actually talk about the exact source.
This was from a source that was talking about the wine industry; a palpable, established pattern in the wine industry is that millennial consumers are much more interested in the story behind the product than they are necessarily in the pseudo-objective ratings that were attributed to it. So an example there was the wine rating - the 100 point scale was actually seen as disingenuous or manipulative to a millennial consumer trying to figure out what wine should they buy. And it called upon - again, tying back that point to the institution – a distrust of institution. If there is a faceless institution or a named institution that I've never heard of before that is telling me that this is objectively better than other things, my first reaction isn't “Oh look, there's an institution saying that so it must be better.” My first reaction would be “Well, who are they to tell me that and why should I listen to that?” Whereas, if I were told a really cool story about how a wine came to be, that would produce interest in me and that's something where if I'm getting the bottle as a gift or bringing it to a party, I can share that story. So that ties in across multiple things: first of all, the importance of storytelling for millennials. But then also if we are looking at, for example, the Continued Education life stage, which says I want to be seen as unique and I want to establish my identity, part of doing that is telling cool stories when you are engaging socially.
So you are giving a consumer – as a specific example – material that they can use to augment their identity or to tell a cool story and kind of show off who they are by using that story, you are giving them the ability to create their own, in some cases, content, whether that actually means stuff that you can create for a YouTube video or whether that means going to a party and telling a cool story about the wine that you brought. It's a lot more personal than a rating. You don't go to a friend's party and talk about the awesome rating of the wine that you bought. I mean some people do, but so far what we found is that that's not the kind of story that a millennial audience is likely to appreciate, especially those in the Continuing Education and I would say even the Work-Life Integrators probably.
Don Hiles: I think our best concluding thought would be the one that we highlight in red all over our research: you must remember that millennials are not a monolith. And that's why we've created our life stage framework, because it will help you focus in and really get past the common fallacy of just marketing to all millennials at once. It really helps you dive in the past that monolithic viewpoint into who are the actual people we want to reach and we want to target.