By now, we have all heard a great deal about marketing to Millennials. Where do they shop? The internet. What don’t they like? Being pitched to. How do we know what they do like? They tell their friends (and the world) on Instagram, Facebook, Twitter, Pinterest, Vine, and other platforms that many non-Millennials haven’t even heard of. If they don’t like a company’s product, or an experience they had, the whole world will know about it. Fast.
Newer, hipper, more entrepreneurial and web-savvy companies, often founded and run by Millennials, naturally have a strong understanding and connection to younger consumers, who are, after all, their peers. Making this connection can be more challenging for big established companies, whose primary success is built on products and value propositions from an earlier time. But shifting to meet Millennials’ expectations is something big companies just have to do. They already account for a
of the U.S. population; they’re a big part of many companies’ market base, and pretty soon they will be the part that counts most.
Connecting with a new generation of consumers won’t be easy or quick for these established companies. It requires a new set of tools: a more open and flexible mind-set, significant process changes, as well as new technology and infrastructure. The unfortunate truth is that many companies have been reluctant, and slow to make those changes. That’s an enormous mistake. As innovation consultant Pete Maulik told me, “It’s time to switch from here they come to this is how we’re going to win.”
Here are three big companies using innovative approaches to make this crucial connection.
MassMutual Walks the Talk by Talking
Big financial services companies are challenged when it comes to connecting with younger consumers, particularly about personal finance. Survey after survey shows that Millennials do not trust financial services companies, and the bigger they are the less they like them. Indeed, in a three-year survey of Millennials conducted by Scratch/Viacom, 71% said they’d rather go to the dentist than listen to anything a banker had to say. And they want to be rewarded for saving, or for looking ahead far enough to buy life insurance.
Many of the classes have been sold-out. Nondini Naqui, President and CEO of Society of Grownups told me, “We have been successful in starting to understand this generation and their needs, but we have the humility to realize we have a lot more to do.” Next up: using the storefronts as a laboratory for expanding the Society of Grownups experience online, both scaling the initiative and meeting the Millennials on their true home ground.
Starwood Gets Technical
By 2020, half of all travelers will be Millennials. And they’re not all that interested in the consistency and reliability offered by the name-brand hotels their parents patronized. Previous generations of travelers liked the idea of knowing that, wherever they went, their hotel would be the same. Millennials, on the other hand, believe the place they stay should reflect the new place they’ve just landed in, and that desired element of discovery is now being offered by smaller hotels and, to some extent, Airbnb.
But more than anything else, younger consumers like their technology. In a 2015 report on the Millennial traveler, “free Internet access” was the top-ranked desired amenity. So, to keep up with these expectations for the latest and greatest in high tech services, Starwood Hotels and Resorts Worldwide has launched two new services in certain hotels: smartphone-enabled room entry and a robotic butler. “SPG Keyless” allows one to bypass the front desk by placing a digital key on one’s smartphone. The robotic butler delivers guest requests via the ubiquitous smartphone for items they may have forgotten, such as a toothbrush or cell phone charger.
Starwood CIO Martha Poulter told me that Starwood’s strategy is to try to amaze their guests so they will share their experiences through their social channels. SPG Keyless and the Botlr were both developed using cross-functional teams including collocated members from Technology, Brands, Security, Procurement, Marketing, and IT. Starwood also partnered with hardware and software vendors to supplement its capabilities. The goal was to move fast to get the most important features into the hands of guests or hotel staff early enough to get feedback. For example, in the initial design for SPG Keyless, the locks lit up in amber, which guests found confusing, so the team redesigned the locks to light green and added vibration to the mobile phone as a physical confirmation that the digital key was working.
SPG Keyless has scaled rapidly and is now available worldwide at Aloft, Element, and W hotels (a few of Starwood’s 10 brands designed specifically to appeal to Millennials). Now Starwood is talking with its other brands to see where they want to deploy it.
What’s the next Millennial-focused offering? Poulter told me that it may be wearables, exploring ways to leverage the new Apple watch.
Marriott Breaks the Chain
Marriott is addressing the challenge of attracting a younger generation of consumers in part by attempting to individuate its restaurants and bars by turning them into local hotspots. Millennials are a big part of the locavore movement, and so Marriott is turning to local entrepreneurs to help lead the transformation.
Food and beverages are relatively easy to change, but buildings and atmosphere are a bigger challenge. Marriott took underutilized hotel spaces and instead of standardizing a concept across their whole chain, created a food and beverage incubator (“CANVAS”) that identified local food and beverage stars, gave them those spaces to do their thing, and even provided expertise to back their new ventures.
Going even further, Marriott identified a range of spaces around the world, from rooftops to – in one interesting case – a cargo container. Then it asked local entrepreneurs to apply for them. For example, in Shenzhen, China, a woman proposed to create a Tofu Boutique. She was not a chef, but a musician who grew up in a traditional family and wanted to bring her family’s cooking to the market. As part of her application, she recorded herself playing a traditional Chinese instrument. She got the location.
Each of these living experiments will provide Marriott with learnings on what works. Success will be measured by new types of metrics, such as how the spaces are tracking on social media, rather than the traditional metric on the margin the venues produce.
To steer these innovations through the established, tried-and-true approaches and natural conservatism of a successful organization like Marriott, food and beverage leaders Wolfgang Lindlbauer, Chief Discipline Leader, Global Operations, and Jillian Katcher, Global Operations Director, Design & Development, told me they socialized the concepts using workshops and “safaris” to take hotel executives to see for themselves the types of experiences Millennials prefer, ranging from bars to workout facilities. They are also reinventing Marriott’s product development process. Instead of launching an initiative in 12 months or two years, Marriott took four to six months for roll-out. Instead of providing giant budgets to test ideas, the company is reserving budget to scale formulas that already have proven their worth.
All three of these organizations dramatically improved their level of connection with younger customers, but each achieved it using a different approach. The range of these approaches testifies to how broadly companies attempting to connect with Millennials must think, and how willing they need to be to overturn their standard business thinking and practice.