I’m fascinated by younger generations and just how different they are from generations prior. You should be too. Generations Y and Z (Millennials and Centennials) represent a dramatic “C” change where a new genre of “Connected” consumerism is forcing business as usual to cater to an always-on, accidentally narcissistic, empowered, informed, demanding, and counterintuitive generation.
Yet, as their behaviors and belief systems evolve, executives still don’t get it. It’s almost as if the more they ignore the fundamental shifts in how technology has forever affected human norms, values, and aspirations, the more things will return to normal. But, they won’t.
Instead of understanding behavior change, executives tend to judge younger generations on the premise that they’re different and therefore cannot be right or valuable as is. This creates the opposite of genuine customer engagement and instead fosters an “us vs. them” perspective and culture. As such, executives blind themselves from seeing how the future is actually playing out and how to thrive in times of great change.
It’s not uncommon to hear how decision-makers discredit connective consumers because of their so-called “everyone got a trophy” entitlement and obsessive relationship with technology, messaging, selfies, FaceTime, and doing anything and everything rather than being in the moment. This legacy-based perspective unfortunately prevents empathy and the emotional drivers that would compel any normal person to arrive at either an “aha” or “uh-oh” moment: “We better do something because what’s happening right now is so fundamentally different than what we’re investing in that we are on a path to the ‘too-big-to-fail’ dead pool.”
In A World Of Disruption, Humanity Is The Killer App For Survival
By taking a few steps back, however, we can see digital Darwinism in full effect across all industries. Technology and society evolve, and in some cases, beyond a point of no return. But, executive perspectives, methodologies, and processes are simply not keeping pace. Regardless of your industry, take a look around. Retail, music, beauty, automotive, banking and finance, travel, work, healthcare, insurance, you name it; every industry in its own way is affected by the relationship between technology and its impact on culture, society, and human beings. How today’s connected consumers psychologically and emotionally relate to and identify with products and brands is no longer hierarchical; it’s becoming something more orbital and additive.
Compare and contrast the differences in perception and value of your older and younger customers as a homework assignment. One way to do so is to create an X-Y spreadsheet with one axis labeled, “Boomers,” “Millennials,” and “Centennials.” Here, you will document the expectations, preferences, values, and aspirations of each demographic. Consider it a light persona development project. On the other axis, you’ll list out common consumer services.
You can use this list as a starter:
- Beauty Products
The goal is to understand how the generations think differently about each service, how they play in their life today, and what value propositions/benefits/purpose they align with.
Using Google and readily available third-party data and insights, you can fill in the blanks between how previous generations value, relate to, and identify with brands and products versus how younger generations do. You’ll quickly realize that the brand pillars, messages and value proposition, existing customer experiences, and journeys and associated metrics are all designed for those born before 1990. In fact, I’d bet that many of the human resources and work systems your company has in place today were also designed and implemented before the Internet was commercially accessible.
Your brand, product, and overall experience must deliver value to people who appreciate different value sets. There is no universal approach now. Your brand, its purpose, the experience, the emotional connections, and its overall value must be re-imagined to deliver new value now and over time.
Some key questions to ask will help us build meaningful and empathetic ties to customers we don’t really know or understand:
- What brands and artists do Millennials and Centennials love and why?
- What devices, apps, and technologies do they use, and how does it affect their world?
- What is important to them and why?
- How do they see themselves in society today and tomorrow?
- What are their aspirations and goals?
- What are the things holding them back today?
- How do they relate to older brands/products?
A Magazine Is An iPad That Doesn’t Work
Younger consumers represent the present and future of basically everything. They control tomorrow’s spending and influence. And, they do not and will not see things your way if you don’t first appreciate their point of view. Organizations that insist on engaging these digital natives through dated perspectives, processes, and systems will not demonstrate irrelevance; they will become yet another statistic in the companies that faced digital Darwinism and lost. It’s a matter of #AdaptorDie. It’s a choice.
We essentially force analog procedures upon a digital generation that naturally seems counterintuitive… because it is. Yet, process-makers and managers today are too busy or too stubborn to realize that change benefits everyone.
|Generation X||=||Analog first/Digitalprogressive|
|Generation Y||=||Digital first/Progressively analog intolerant|
|Generation Z||=||Digital only|
Generation Y largely represents the first generation where the experiences of living the analog-to-digital life are something that’s learned rather than intuitive. Generation Z right behind them, are exponentially analog intolerant. It’s literally something they have to learn.
Think about the workplace for a moment.
Ignorance + Arrogance = Irrelevance
Millennials are forced to learn how to work and collaborate using technology and adhering to processes that are at best counterintuitive and, at best, tolerable in exchange for a paycheck. But, in the end, old ways of working affect productivity, and that’s counterproductive by design. Most likely, the existing paths, guidelines, and guardrails that Millennials are exposed to are pointless in their eyes.
In a separate study conducted by Millennial Branding, it is expected that by 2025, Generation Y will represent 75% of the workforce. That’s right around the corner. Think about that for a moment. Not only will Millennials dominate the workforce, they too will command your markets, with the even more connected and narcissistic Generation Z following right behind them. As you and I know well, change is not an overnight occurrence. The old guard isn’t releasing control. At the same time, younger employees are coming up fast. Older managers are working longer before they retire, and this only perpetuates the problem until we start to work toward solving it.
What’s playing out in work is the same thing that’s occurring in markets and vice versa.
Rather than debate or whine about the need to change, I study it. The reality is that change either happens to you, in spite of you, or because of you. It’s more productive to learn and also unlearn as a means to discover or create solutions than to fight. One way to do so is through social science. In my work, I approach it much in the same way an anthropologist approaches a field study. By observing behavior, we can learn how to adapt processes and products, develop more relevant products and services, and learn to communicate and engage in more meaningful ways.
It’s not just digital DNA that’s conjuring an alternative future; there are also very real shifts in expectations, values, and aspirations we must consider. We can only grow, become more relevant, and deliver greater value with learning and unlearning. We can visualize new solutions that are not solely based on the world we know, but instead a world we can build together.
Organizations can only earn relevance among an emergent group of consumers who would otherwise remain elusive to the existing myriad of (traditional) business decision-makers today. We just have to empathetically see the world through the digital lens of a more connected, focused, and discerning group of young adults.
So, what does change look like?
What’s the future?
That’s for each of us to discover. As we do, our paths will become visible. One of the ways that help me understand change is to look at other industries. I particularly study the music industry and the evolving relationship between artists and fans and the resulting impact on commerce and markets. What’s happened/happening to the music industry is a strong predictor for every industry.
Baby, I Was Born This Way
When you study the relationships Millennials have with brands they love, we start to surface distinct nuances that weave together the fabric of bonding and how it changes the game for affinity and advocacy.
Generation Y is the group that the music industry initially labeled as thieves, accusing them of stealing the music they consumed. But they didn’t know any better. Technology was enabling them to associate a different kind of value with music. Do I agree with it? No. But my opinion doesn’t change an entire generation of consumers. My point of view either prevents or inspires me to get closer to understanding how they will impact economies and, more importantly, what we can do to have a positive and beneficial impact on the future.
For five years, I hosted the Pivot Conference, an annual event that explored brand, technology, and societal evolution. In late 2012, one of the presentations delivered an unforgettable aha moment that I’d like to share with you.
MTV’s Alison Hillhouse opened the door to how younger generations think differently about artists and the value of music that connected the dots for much of my work in digital transformation and anthropology. Entitled “Music(m) – Music to the Mpower,” the discussion shed light on what the world of music looks like when we focus on how Millennials think and act.
To say that Gen Y has significantly wrought the music industry might well be a great understatement. They are forcing, albeit slowly and painfully, an entire industry to rethink its business model, product, and overall value. Because of technology and access, Millennials forced the emergence of a decentralized, non-hierarchical marketplace. In doing so, they also impelled artists into an era of digital transparency.
MTV’s study challenged me to think about how this behavior, paired with evolving expectations, preferences, and demands, could play out in other industries. I’d like to challenge you to join me with an open mind.
Brands As A Form Of Self-Expression
With traditional branding in mind, the first takeaway from MTV’s research is that relationships are forged through self-expression. I think about Harley-Davidson, Apple, and Nike, just to name a few shining examples of brands that loyal customers adore, in some cases, religiously.
But with Millennials, something contrastive this way comes.
Music is now democratized. Napster was just the beginning. Apple iTunes built a centralized platform for the sale and distribution of digital music. Then, streaming services, such as Spotify, offered consumers music for free in exchange for paid advertisements. Even though subscriptions were also offered for higher-quality bit rates and more exclusive access, the baseline for consumer minimum expectations equated the value of music to “free.” As a result, expectations and, ultimately, behaviors changed. Music became, in large part, a series of cultural accessories rather than generation-defining movements.
This change is not unlike the impact of digital on the photography industry. Kodak is to this day widely regarded as a cautionary tale of a brand that chose to invest in legacy over innovation or, more explicitly, film over its digital patents. While digital became the standard for everyday photography, and Kodak did indeed miss the boat, disruption was more tied to how the culture of photography changed as a result of the shift from film to digital.
Digital picture-taking was somewhat free compared to the cost per picture on film. This eventually shifted the role and value of pictures in our society from that of preserved memories to the capturing and eventual sharing of real-time experiences. The once nostalgic and precious “Kodak moment” had now turned into an abundance of moments.
You could make similar comparisons to the impact of Netflix on Blockbuster or Amazon on Borders. New technologies and services changed how people behave, consume, and align with brands.
Music Makes The World Go Round… As Long As I’m At The Center Of Everything.
When the perception of music becomes free, the dynamics and economics that define artist-fan relationships are by default disrupted. In March 2017, Fleetwood Mac’s Stevie Nicks explained to Rolling Stone the extent to which the economics of music has changed:
“I don’t think there’s any reason to spend a year and an amazing amount of money on a record that, even if it has great things, isn’t going to sell. I don’t think we’ll do another record. If the music business were different, I might feel different. What we do is go on the road, do a ton of shows, and make lots of money. We have a lot of fun. Making a record isn’t all that much fun.”
What’s the return on an album investment if streaming royalties quickly evaporate?
This is why understanding the dynamics of how younger consumers consume music and also align with their favorite artists reveal the future of branding and commerce.
Artists Are Satellites In The “Egosystem”
Younger generations see their favorite artists – and one can further deduce favorite brands as an analogy – as their own personal avatars. They don’t hold them up on an aspirational, self-projected pedestal the same way as older generations.
When it comes to brand, this new behavior could be a predictor of things to come for brands and customer loyalty. For example, some Millennials are loyal advocates for their favorite artists. MTV refers to these consumers as superfans. But, being a superfan is a little different today than it used to be. It’s a lot more about the Millennial’s personal brand than the artist. Millennials are puppeteers, choosing which artists are part of their show and which take the stage, when, and how to best represent who they are in the moment and who they want to be.
They are in control.
For those born before 1990, many consumers worshipped their favorite artists and wanted to become just like them. Somewhere along the way, technology empowered people to become their own brands. Today, people are brands and brands are people. The artists and songs of the moment now become temporary satellites in a consumer’s “egosystem.” It shifts the traditional power of the relationship from artist to fan to that of a peer-to-peer model (or as MTV refers to it, “Artist as a Friend”) that changes with the trends. An artist or song is just one of the many rotating satellites in their egosystem.
In This Digital World, There Are No Strangers To The Open-Minded, Only Friends They’ve Not Yet Met
According to MTV, Millennial music fans demand not just a VIP pass, but complete access to their favorite celebrities, artists, and entertainment experiences. They are, after all, the center of their digital universe. In its research, MTV set out to examine expectations of younger consumers and better understand their relationship with artists.
MTV’s findings revealed the ways social media has dismantled barriers between artist and fans and uncovered a “zero-distancing” effect, or the collapsing distance between artist and audience. The same can be true for brands. As such, the research was divided into three stages: 1) Discovery, 2) Affinity, and 3) Advocacy.
Early on in the report, MTV introduces us to Jennie, a 22-year-old consumer who gives readers a taste of how Gen Y learns about and values music:
“I was 10 when Napster hit,” she shared with interviewers.
Jennie doesn’t really know of the cultural importance of once music-industry staples, such as Tower Records or Wherehouse, either. She has no idea of what it means when people refer to the days when pencils would fix tangled cassette tapes. Yet the gap that exists between how she sees the world and how older decision-makers see the world is on absolute contrasting sides of the universe.
There’s the way executives see the world, and then there’s the way that the world is actually progressing. To help, MTV introduced three compelling thought starters to consider as you go on your way. I’ve added to each of the questions to make them also applicable to brands.
- How will you recognize and reward consumers as-PR-machine? Think of consumers as not only their own egosystems, but as digital tastemakers and influencers.
- How will you offer unprecedented intimacy? How will consumers always feel like the VIPs that they believe they are?
- How will you collapse the existing hierarchy and give consumers control? How will you democratize the brand so that it represents the experiences and shared experiences of customers and stakeholders?
To help get to the answers, let’s explore those three stages set out by MTV; Discovery, Affinity, and Advocacy.
It’s no surprise that peers are among the greatest influencers in our society. What people say, think, experience, and share has direct and indirect effects on our impressions and actions. In the discovery stage, it should also come as no surprise that friends impact the decisions of others. It is in the “how,” though, that opens windows to new opportunities.
As friends share videos, links, and pictures, and color each with personal perspective, opinions, and reactions in social networks, each play a part in branding and marketing. Meet the new “friendorsers” – aka influencers.
Experiences are more important than ever before. It’s not so much what you say about your brand that counts; it’s what consumers experience and, in turn, share with others that defines the Ultimate Moment Of Truth (UMOT) for your business. In a social web, with a web that has a long, collective, and searchable memory, it is the experiences and words of others that often out-markets your best marketing efforts. Those experiences must be designed to be personal, relatable, aspirational, and, more so, shareable.
If you look at the traditional customer journey, advocacy is often among the last phases of a desired lifecycle. But with the Millennial, advocacy is not a given stop in their organic journey. Advocacy, and better yet, affinity, is earned not just because they like the product. Relationships are formed because brands are also accessible, relatable, and supportive. They share the same values. They’re BFFs.
In a video made to accompany the research, one twenty-something told the story of how an artist shared a screenshot of one of his tweets. His reaction was both honest and revealing: “Holy sh#t. He’s listening to me.” He’s now a fan for life. But it takes more than recognition, which shouldn’t go without saying. Fans want their idols (or brands) to be open. They don’t just want to be included in their world; they expect it.
Technology changes the way people learn about music and how they interact with other fans. It takes more than a “fan page” to grab their attention of course; it takes understanding, appreciation, and genuine engagement. The Millennial needs to feel like they’re connected to the person behind the brand or what it is that the brand stands for. In fact, 76% say that they feel a stronger connection to musicians who are open about who they are, and another 91% say it’s OK if they have flaws – it makes them human.
This is so important.
Brands feel like they always have to be on message and persistently in front of consumers. And, executives are conditioned to speak to the public through an entangled process of PR spin and legal approvals. There’s a reason why every year Edelman’s Trust Barometer shows deflating trust in executives and rising trust in employee representatives. It’s because people want to be engaged by people or brands that act like they get “them.”
To support this, MTV found that 53% of Millennials believe that the more “an artist” (also think humanized brand) shares online about who they really are and what they truly represent, the closer they’re drawn to them or feel about them. It opens the door to more personal, relatable engagement, which is what today’s connected consumers expect. As a result, this ushers in a new era where the artist or brand assumes a position of “friend” or BFF.
I know what you’re thinking. Relationships are nice, but at the end of the day, the “R” in ROI isnt relationships; it stands for return.
Millennials, however, aren’t willing to buy just anything, so approaching them transactionally is short term at best. This is, after all, a generation that is, fortunately or unfortunately, well versed in getting what they want either for free or at a notable discount. They are willing to pay more for something if they can trust it, align with it, or if it carries social impact. More so, they are willing to pay more if they know the experience is worth it.
When it comes to music, paying for it is a big deal. They grew up with Napster, Kazaa, Pandora, and now Spotify. They use YouTube as their personal radio. But, it’s when they feel more connected to the artist or the brand that they are more than willing support them financially and socially. It shifts from an engagement of transactions to one of patronage, where people become supporters of the things that provide value. It shifts the balance of power toward the consumer.
In an interview with MTV, Devin shared an honest and telling perspective to explain the role of the empowered consumer: “When I want to support an artist that I respect and connect with, I buy their music.”
In the report, MTV noted, “Buying is symbolic patronage.” It’s a reflection of the physical connection between fan and artist and also the symbol of the importance of earning relationships.
Engage people on their terms and define new value that they also value. Get to know your customers. Earn their support by “getting” them, befriending them, and creating incredible experiences that align with their values and aspirations.
The ROI is reflected in a transaction, but the real benefit is in the long term when the “R” shifts to relationship. As MTV found, 81% of Millennial consumers express support with their money. As one consumer expressed, “The closer I feel to an artist, the more likely I am to support that artist by purchasing music.”
Revisiting the traditional sales funnel of yore, a great assumption was made that customers would naturally fall into the advocacy camp if products and services met or exceeded needs. But, we all know that a happy customer may tell some people about their experience, but an unhappy customer will tell everyone.
Millennials, on the other hand, subscribe to the Latin philosophy of quid pro quo – you give me something; I’ll give you something. Remember, everyone believes they boast a personal brand. This new generation of digital consumers is incredibly savvy, connected, and expect something in return for their precious networks and the word-of-mouth influence they may wield. Advocacy now almost resembles that of mercenary. They are not standing by to be part of your branding machine. They are a branding machine.
The shift from fan to superfan occurs when people are recognized, empowered, and also rewarded. Brands can’t control experiences if they just react to them. But they can shape and steer them if they understand how to be relatable and, more so, how to become shareable. As MTV learned, Millennials become advocates when artists provide a framework to explore their identity.
Even though there’s not an “I” in Team, there’s a “me” in both team and social media. This new generation of empowered, and by default entitled, consumers realize that when they share with their friends, they are playing the equivalent role of the celebrity spokesperson within their own egosystem. They also understand that they earn leverage in their social graphs. Brands that take this social capital for granted miss that customers who share experiences create new touchpoints in the brand journey. Essentially, shared experiences help strangers make decisions.
This is why social science is so incredibly important today. The psychology of sharing reveals that rewarding fans or superfans is just the beginning. Your brand, products, and overall mission / purpose must also be something people are willing to stand beside. Community is much more than belonging to something; it’s about doing something together that makes belonging matter. It must be important or beneficial enough to where ROI is worth expending social capital toward helping you while helping themselves shine within their network.
Brands must invest in a social construct that empowers consumers to share and strengthen their position in their community while also reinforcing the relationship they have with the brand. In the case of music, MTV found that 58% of Millennials (76% of Music Enthusiasts) are: “… motivated to post and share music when I get feedback (e.g., likes or comments).” Another 64% expressed: “I like to be the source for new music among my friends.”
When brands matter, and when brands engage people to create communities that matter, branding becomes human and social.
Chamillionaire is a good friend of mine. Over the years, we’ve spent a lot of time exploring how emerging tech can help him build stronger relationships with fans and rethink traditional approaches to the music business. In the spirit of quid pro quo, Cham took a gamification approach that rewards fans with tangible goods for engagement.
This is very similar to the community strategy that adventure retailer Giant Nerd takes to foster and recompense engagement, loyalty, and advocacy. For every authentic product review on the Giant Nerd website by actual customers and users of said product, points are received toward future purchases.
People want to feel like they’re part of something where they are valued and where they can have an impact. Build an engaging social marketplace, and they will come. Reward them for their engagement and their social capital, and they will come back and shape the future of the community. Underestimate or underappreciate them, and they will move on.
What was once a fandom with a hierarchical structure is now a community with expectations of peer-to-peer engagement, including the artist (and brand). It comes down to identity. People aren’t willing to let artists represent who they are; they want the artist to symbolize aspects of their life. The same is true for brands.
To shed light on this finding, MTV asked participants to rank themselves on a spectrum between semi-fan, fan, and ultimate fan for their favorite artists. Surprisingly, not one claimed to be an ultimate fan of any artist regardless of how much they love or respect an artist. Why? An ultimate fan is seen as someone who has given up their own identity. No artist or brand is immune.
The key is to define a branded domain – a world – to create an experience that gives fans a domain where they can emulate ideas, lifestyles, and objectives for fans to make their own.
MTV refers to this notion as a self-expression toolkit. For brands, think about this as a brand style guide 2.0 or, better yet, an experience style guide. Experience design shifts consumer engagement from perceptions and impressions expressions, experiences, and conversational commerce. If people believe that sharing your work, your story, and your mission helps them increase their social capital, then help them help you.
Create a brand narrative, product experiences, and a relevant purpose that are equally meaningful and shareable to a new and evolving generation of customers. You have to connect on an emotional level, not a promotional one. Understand what they value and how you can boost their social capital and the experience for everyone in their egosystem. Doing so requires you study customer behavior, as well as their interests, norms, values, and aspirations. Experiences will be shared, so define them and the benefits up front and provide customers with a natural and easy-to-understand “how to engage”… right out of the box!
This is very much about building something bigger than the product or the music. It’s about building an immersive universe, a complete experience, where people are free to explore new territories while aligning with a greater purpose to shape the impressions, expressions, and aspirations of human networks online and in the real world.
Encore: Who Wants Honey?
While on stage at SXSW 2012, I had the opportunity to interview Billy Corgan, Founder, Vocalist, and Lead Guitarist of The Smashing Pumpkins. In front of a few thousand people, he shared his advice for artists and fans and was direct and honest in the process of doing so. He believes the future of artist and brand engagement starts by designing relevant experiences that matter to people who are not you or me.
According to Billy, artists must first create their world, beyond “viral” music videos and hit singles. But both artists and fans must assume responsibility for the future of music. Corgan believes the future of sustained relevance is about meaningful engagement… again, beyond the music. Brands, that also means that you have to think beyond the product, packaging, and marketing.
What’s happened, and is still happening, to the music industry represents the collapse in hierarchy between fan and artist. This is playing out in every industry between brand and customer, employer and employee, and organization and key constituents.
The question is no longer, “Are you experienced?” The question is now, “What is the experience, and what should it be in ways that are relevant, relatable, and aspirational to a new generation of connected consumers?”
Answering that question represents the future of your business. And, we’re not done yet. The Centennials, right behind Millennials, continue the trend of evolving behaviors, preferences, values, and aspirations.
We are the product of our collective experiences. You and I come to this moment right now based on the experiences that define us. We are who we are because of the life we’ve lived. And we bring those experiences to our work and, ultimately, the decisions we make. If we take anything away from this research, it’s that we might actually be working against ourselves. Our experiences, the way we see the world, and our place in it are suited when designing strategies for people like us.
But here, the Millennial and the Centennials that follow are something so different, unique, and important that our next steps are practically counterintuitive. To reach them takes a dedicated approach if we are to truly earn attention and sustained relevance.
This isn’t just a music revolution; this is a full-scale market revolution.
Brands that understand this important twist in customer engagement will unlock something so profound, something so potent, that the future of the brand drives your work in digital transformation, customer experience, and brand innovation.
Welcome to the jungle.