Best friends, gurus and one-night stands
Editor's note: Jo-Ann Osipow is executive vice president of research firm GfK’s brand and customer experience team. Kathy Sheehan is executive vice president and general manager of GfK’s consumer trends team. Both are based in New York.
Just like siblings who define themselves through comparison to the models set by their elders, generations do not emerge in a vacuum or a solitary petri dish. Looking sideways, often with a mix of horror and grudging admiration, the emerging generation says to itself, “I’m not going there!”
It has been said that today’s younger generations have not rebelled against their parents’ tastes and values like the Boomers did in the heady 1960s and ’70s but this does not mean that Generations X and Y are followers by nature. Generation Y (covering roughly ages 20 to 33) in particular – often referred to as Millennials – possesses a mixture of confidence, savvy and latent narcissism that seems almost out of left field, like a sculptor born into a family of accountants.
And there is perhaps no better way to know and appreciate the stark difference of Gen Y than through comparisons to their timeline neighbors, Gen X (roughly ages 34 to 48). Where Boomers are idealists at heart, Gen X are street-smart, skeptical and pragmatic and Gen Y “I can” optimists. Again and again, we see these generational archetypes resurface – in Gen Y’s view of their futures, the economy and what constitutes “the good life.”
These patterns of thinking and acting can also give marketers a clear sense of how to create and nurture brands that Gen Y will embrace as trusted “best friends” – not just “acquaintances,” “one-night stands” or “complete strangers.” After all, earning the Gen Y’s love can be the key to billions – some say trillions – of dollars in buying power.
Clues to their tastes
Information from GfK’s Roper Reports research sketches a portrait of the values that define Gens X and Y and, at the same time, offers clues to their tastes in brands. Gen Y ranks “enjoying life” and “having fun” significantly higher among its core values than the general population, while scoring “close friends” and “tradition” lower than the U.S. average. Even when today’s Gen Xers were 12 years younger, they did not prize fun and life enjoyment the way Gen Yers do.
Not surprisingly, Gen Y’s idea of the good life is highly focused on experiences rather than possessions. While “a home you own” remains the top goal for Gen Y (as it did for Gen X at a similar age), “a job that pays more than average” ranks only No. 6 for today’s Gen Y (compared to No. 3 for young Gen X), and “a lot of money” barely made the top 10 (versus No. 4 for young Gen X).
Gen Y is also much more likely to exude confidence – so much confidence that they are OK with putting fun before work. That would never fly with pragmatic, “no-drama” Gen X, which is big into planning and considers hard work just part of being human.
Gen Y wants to “do it all” but never loses sight of “what’s in it for me?” Over half (53 percent) think multitasking is unavoidable – much higher than the national average (38 percent); and less than one-quarter of Gen Y/Millennials say they “dislike” the multitasking experience. But to them, doing two things at once is a part of every aspect of life – not just something you do to get ahead and be productive. In fact, their No. 1 indulgence is “taking time for yourself” – more than buying clothes (No. 6), going to a concert (No. 2) or sleeping late (No. 5).
Vastly different expectations
Not surprisingly, Millennials and Gen X have vastly different expectations of products and brands. The desire for self-expression is strong in Gen Y – so products are, to them, tokens of identity and even prestige (see Table 1). A bit of buzz around a brand is hugely attractive to Gen Y; hearing about it from friends, social media connections and even media personalities makes a brand seem like something Millennials “need to have.”
Of course, customization is also big deal for Gen Y; they grew up at a time when it could actually be expected in many circumstances – and customizing makes any product “all about me.” (You might say that every Gen Yer is his or her own favorite brand.)
But Millennials’ tastes and purchasing power have been tempered by tough times. The exuberance of the 1990s – Gen Y’s formative years – was shattered by 9/11, the tech and real estate meltdowns and the financial collapse. The percentages of Gen Yers who have taken on major life events – marriage, having kids and homeownership – are vastly lower than those for Gen X or the total population. To some degree, their lives as consumers are on hold but their purchasing power and influence continue to grow and will likely accelerate in the near future.
So how can brands earn the precious dollars of this fickle, super-savvy, tech-infused generation? The task is even harder than it sounds, because Gen Y is highly attuned to cynical ploys and overt marketing. Though they are more focused on style and design than Gen X, Millennials also prize authenticity; after all, if their purchases are stand-ins for themselves, then those brands should not be phony.
Model of relationships
One way that we approach the task of analyzing consumers and their brands is through the model of relationships (Figure 1). As humans, everything we understand inevitably has a human quality to it; that is the lens through which we see the world. It stands to reason, then, that how we spend our money is driven in part by the ways we respond to brands in almost-human relationships. Based on their actions, statements and ideals (or lack thereof), brands tell us “who” they are – and we use this information to categorize them. It is essentially the same shorthand we apply to celebrities, coworkers, family members – even pets.
GfK recently conducted an in-depth study of how today’s consumers relate to brands, using a menu of 27 relationship archetypes and an analytical approach refined over many similar studies. The types range from Complete Strangers to Dealer-Addict to A Secret Affair, with each telling us a great deal about both the brand and the consumer. We interviewed over 17,000 people, covering 48 product categories in nine sectors; and our results for both Gens X and Y provide useful guidance for brands seeking to win over the “Me”-est Generation.
One striking thing we learned is that Gen Y have much more complex and activated relationships with brands than Gen X or the general population. They overindexed for an incredible 24 out of 27 categories of relationship and scored 120+ for fully half (14). In stark contrast, practical and skeptical Gen X never scored above 107 or below 94; and Boomers – perhaps displaying traces of their ’60s-era distrust of corporations – underindexed in 22 of 27 categories.
One of the most desirable relationships for any brand, with Gen X or Y, is Best Friends. Here, trust is natural and deeply earned, having been proven over a long series of interactions. Gen Y indexed extraordinarily high for Best Friend relationships (139), while Gen X was slightly below average (95). One brand that has achieved this status with Gen Y (and Gen X) is Nissan, which Gen Y considers a familiar stand-by. “I just feel like it’s been around as long as I can remember,” one of our respondents said of Nissan. But Boomers, who may remember a day when Nissans were not sold in the U.S., consider it more of an Acquaintance – and even a Fling.
Gen Y is also highly predisposed to Guru/Disciple brand relationships. Although voluntary and harmonious, these connections put the brand in a position of authority – as a tastemaker, teacher or focus of aspiration. In some ways, it is a more powerful relationship than even Best Friend; but the potential for disillusionment (as with a flesh-and-blood guru) is always in the background. For Gen Y, a Guru brand would be Old Spice – its tongue-in-cheek “the man your man could smell like” ad campaign created a huge social media presence that made a 75-year-old brand relevant to today’s buzz-hungry Gen Y. For Gen X, Monster energy drink is a Guru; our respondents cited Monster’s “high quality,” appealing taste and youthful look as reasons for loving it.
Why do brand relationships matter? Because they can lead directly to sales growth or decline. We have found that brands considered Best Friends by 20 percent of category users have an average of five times the share-of-wallet of brands with less than 10 percent Best Friends. And high-ranking Best Friend brands have three times more positive word of mouth and 2.5 times the recommendations, compared to those with low Best Friend rankings.
Brands that are seen as Gurus by at least 3 percent of category users achieve almost twice the share-of-wallet of other brands. They also receive 70 percent more recommendations from customers and have three times as many consumers calling them “favorite brands.”
Intense brand connections
It is essential to understand and manage your brand’s relationship with Gen Y because, as we said earlier, they are more likely to have intense, potentially volatile brand connections. In our study, only four brands rose to the status of Guru with 6 percent or more of Gen X – as compared to a remarkable 30 brands for Gen Y. Interestingly, both Gen X and Gen Y were inclined to label brands as Villains, with 21 brands earning that unhappy title from 6 percent or more of Gen X, and 29 brands for Gen Y.(This may reflect the often-skeptical attitude Gen X consumers have toward brands and advertising.)
In addition, Gen Y is much more likely than Gen X or Boomers to share their feelings (good or bad) about your brand with others – in social media and offline. For example, 60 percent more Gen Y consumers share their positive opinions about “Best Friend” brands and negative opinions of “Enemy” brands, compared to older consumers.
An important influence on Gen Y brand preferences is their Boomer parents, whom they consider friends as well as mentors. Our study shows a strong alignment between Boomers and Gen Y on brand relationships, in categories ranging from credit cards to big-box retailers to toothpaste. Brands can develop new ways to influence Gen Y by marketing to their Boomer parents – and the other way around – and by using the Gen Y-Boomer relationship as an emotionally compelling context in which to embed the brand.
Understand the categories
To be sure your brand is making the most of its relationship with Millennials, it is essential to first understand the categories (there may be more than one) into which your brand primarily falls. Then assess if this is the best status for your brand’s goals and anticipated evolution; even a relationship like Star/Fan, for example, may need to be reengineered if you are hoping to stick with Gen Y as they have kids and grow into new life stages.
Being talked about is essential for Gen Y saliency; while Gen Y may like to discover your brand for themselves, it is more likely that they will gravitate to you if they sense others are doing the same. But as you try to generate buzz, do not forget the authenticity factor; transparently phony marketing could turn you into a Villain instead of a Best Friend with Gen Y – and they will be quick to let their distaste be known to friends and strangers alike.
Finally, be sure to leverage the Boomer/Gen Y synchronicity, as a way of appealing to and winning over both groups. By respecting the power of brand relationships and the intensity of those connections for Gen Y more than others, you can go beyond today’s sales to create a bond that will result in strong growth and word of mouth for years to come.