Millennials and brand loyalty: My thoughts
When Gallup says Millennials are “the least-engaged generation of customers,” with “the lowest level of customer engagement” of any group of consumers in the country, a couple thoughts come to mind.
Those conclusions come from Gallup’s recent study, “How Millennials Want to Work and Live.” Full disclosure: I read this article, which is from Gallup, about the study, and not the long study itself.
The study’s supposition, it seems to me, is that it’s important for companies to earn the loyalty (committed engagement) of customers, who then go on to become “advocates and brand ambassadors” for the companies’ products and services. I certainly “get” that concept: when I was a young rock-and-roller, groups like the Beatles, Stones, Grateful Dead and Led Zeppelin became superstars through the advocacy of people (like me) who heard them very early and told all our friends to check them out. (I never thought of myself as a Beatles “brand ambassador” but in retrospect, I guess that’s what I was.)
These days, the Gallup study warns, instead of creating such “brand ambassadors,” many companies run the risk of “creating brand destroyers who have a host of digital soapboxes from which to air their grievances.” Lord knows that’s true! I myself have been known to go to Yelp to air grievances about restaurants—although not too often, since I’d rather praise than pan. And with Millennials living on their mobile devices, they’re bound to stumble across “brand destroyers.”
Of course, the news isn’t all bad for all companies: Gallup found that “95% of fully engaged millennial customers say they plan to stay with their wireless provider,” a degree of customer loyalty that bodes well for the wireless providers, since “These fully engaged customers are substantially more likely than other customers to say they would recommend their provider to others…”. That’s what every company wants to hear about its customers.
Thing is, most of us ordinary customers have little choice of wireless provider. I suppose that instead of AT&T, which I’ve had for years, I could have Verizon, Sprint or T-Mobile. But in my mind, they’re Tweedledum and Tweedledee: The new boss is the same as the old boss. Do I love AT&T and would I recommend it to my friends? No. It simply means that AT&T does a decent enough job, and it’s not really worth my time and energy to look into other providers; changing wireless providers can be a real hassle. This is especially true of cable T.V. providers in America, a business that I think is monopolistic. I’ve had Comcast for a long time, but that doesn’t mean I love them. In fact, I don’t particularly like Comcast, but I feel rather like they have me over a barrel. So the mere fact that I’m “fully engaged” with Comcast means nothing.
There’s another factor when it comes to those low levels of engagement by Millennials: The younger people are, I think, the less engaged they are with almost any company. Isn’t that true? Millennials may be highly engaged with, say, Instagram, but Instagram is the outlier. When it comes to soaps, or cereals, or pants, or sneakers or toothpastes or bicycles or toilet paper or rock bands or video games or, yes, wine, I should think Millennials are a lot more experimental (or maybe fickle is a better word) than us more-conservative older consumers; we are admittedly less adventurous, but we do tend to be brand-loyal. Naturally impatient, Millennials are reluctant to commit; they want to keep their options open. And who can blame them? They’re young, figuring the world out. They may be in love with Nike today, only to switch to Asics tomorrow. It doesn’t mean they hate Nike, and it doesn’t mean they have any interest in being a “brand destroyer” for anyone.
The implication of all this is that it’s hopeless for a wine company to pin their strategy on earning the undying loyalty of Millennials. And yet, we know that millions of Millennials will eventually end up liking specific wines and wineries, once they get the experimentation thing out of their heads. Wineries know that, which is why they’ll continue to try to appeal to Millennials as “brand ambassadors.” The trick is to actually get it done. My own two cents is that Millennials, not having a lot of money, are looking for bargains and values. Beyond that, I believe they’re “get-attable” (FDR’s word) with the right combination of flavors, packaging and story-telling. And to understand what that means, you should look at the most popular wines in America, not just among Millennials but everybody, and analyze how they got to that exalted status.
Rob McMillan at Silicon Valley Bank has written extensively on Millennials on his wine blog.
Three recent posts:
http://svbwine.blogspot.com/2016/05/selling-millennials-through-myths-lies.html#more
http://svbwine.blogspot.com/2016/06/selling-millennials-through-myths-lies-2.html#more
http://svbwine.blogspot.com/2016/06/selling-millennials-through-myths-lies-3.html#more
You’re spot on with your post. The whole thing hinges on a pair of words that really isn’t relevant to wine…brand loyalty. No matter how great a given wine is, I (a Boomer) as well as Millennials might have a really great Pinot Noir from producer X with story Y. But the next time they go to the store they’ll be looking for something LIKE what they just had. Weird but real. I don’t think it’s a matter of fickleness, I think it’s all about discovery. We live in a world where “news” (meaning fresh information about things that are extremely relevant in someone’s life and group) is the engine that’s driving everything. So the concept of brand loyalty isn’t anything we aspire to or value. What matters is being the first to discover what’s new
It is not a coincidence that switching your wireless or cable TV provider is such a pain.
It is a willful strategy known as “switching cost” or “switching barrier.”
https://en.wikipedia.org/wiki/Switching_barriers
A corollary to Steve Raye’s comment.
Certain wine collectors are “trained” to “roam” among brands due to scarcity.
The oft-heard lament from Burghounds is that, once they have discovered a wine in a particular vintage they love, it is next in impossible to go back to the same store and find more inventory. Other Burghounds have sniffed out that “outlier” and have snapped up all the remaining bottles.
So these Burghounds move on to another producer . . . and the buying cycle starts all over again.