Reaching New Prospective CustomersByRaymond D. Matkowsky
Recently, USA Today® did a short report on a Staples® Office Supply survey of 503 small business owners. 50% of the owners reported that they do not know how to reach new prospective customers. 63% of those that responded said they used social media advertising, 59% used online advertising and 46% also used print advertising. The survey did not state the success rate of the various strategies. I would guess that it was 1.0 or 2.0% for each. Clearly, people use more than one channel of advertising. But, are they directing their advertisements at the right people?
The various generations do not have the same priorities. They do not have the same likes and dislikes. Some are directly opposite of one or both of the others. You must address your advertisements to each generation separately. Therefore, you need to use various channels to reach all groups.
Millennial
All indications are that millennials like to shop with small businesses. It only stands to reason to have small businesses direct some of their advertising toward the millennial population. This, however, must be directed specifically to them. In my mind this goes beyond social media.
So what do millennial like and what do they hate? Millennials are unusual in the respect that what they like is very often the opposite of other age groups. If you want them you must gear your advertising solely to them and not to other age groups. They like gourmet pizza in a very big way. To reach them advertise at places such as Pieolgy®, Blaze Pizza®, Chipotle® Pizza Restaurants and many other casual restaurants.
They love stores that have whole sections devoted to just them. They like exclusiveness. It is well known that millennials like to take plenty of pictures. They become obsessed with places that have walls that can serve as backgrounds for selfies. They also love businesses that show some sort of social consciences. They demand customer service.
Contrary to opinions, they don’t like mobile apps. Save your money if you are thinking of going in that direction. They don’t like coupons either. Offer discounts without the use of coupons. Most of all, they do not like to be called “Millennials.”
Generation X
This generation was born between 1965 and 1981. They are the smallest generation, but 45 million strong in the United States. They are conservative and have strong ethics. They do feel squeezed by the millennial and baby boomer populations. Their children are very important to them and they will put their welfare ahead of their own.
Unlike millennials they make many purchases online but they also like to shop at brick and mortar stores. Both locations are probably a good place to advertise to this group. They like coupons. What do they typically buy? They spend a great deal on books, clothing and accessories, and event tickets. 62% of them read newspapers. Newspapers, therefore, are another good place to advertise. 72% research products online before they buy. Advertise your product or service online. Emphasize your main benefit when doing so! Their brand loyalty is very high and you must be able to show more value in your product or service than the competition.
Although savings and college funds for their children are high on their “to-do” list, they do not consider themselves knowledgeable about investment and financial matters. They seek out investment managers. 50% have little to no credit card debt. 57% feel that they are still recovering from the last recession and financial safety is a big concern. So is student debt.
41% consider themselves as entrepreneurs. Show them how your product or service could help them. Join organizations that cater to entrepreneurs. Offer to make interesting presentations at their meetings. This highlights your business. Advertise in magazines and journals that they read.
Generation X takes very poorly to the hard sell or perceived manipulation. Stay away from these two techniques as it will stop a potential sale immediately. They prefer straight talk and a product or service that will ease their lives. This generation also trusts the media least. They like email, but frown on impersonal communications. Personalization, they believe, is more than just printing their name on a letter.
A Baby Boomers
As a member of this group, I believe that this is the hardest group to sell to. However this group has more disposable income than the other two groups combined. They control about 70% of disposable income. They have a different mindset than the other two groups. They say to themselves “I have saved all my life. Now it’s time to spend it while I am still here.”
Also remember, this group has been accumulating all their needs for more than thirty years. When it comes to necessities, it will probably be replacement items and they have a keener idea of what they need. Keep in mind the three things that this group cherishes – VALUE, VALUE, and VALUE. They will spend the money if they see the value of your product or service.
So where are Boomers spending their extra money? One answer is travel. AARP estimates Baby Boomers spend more than $120 billion annually on leisure travel. Once in a lifetime destinations and warm locations are extremely popular with this group. Another area of spending is healthcare. This is not only out of necessity, but also to stay fit enough to enjoy their retirement years. People in this group like to pamper themselves with cosmetics, clothes, expensive cars and hobbies they could not afford in earlier days (think exclusiveness). Boomers need companionship. Boomers spent nearly $30 billion on pets in 2014, accounting for 45 percent of all pet spending in the U.S. Home remodeling is another major expenditure. Those that have difficulty getting out use the internet extensively. Those that can get out will use both the internet and their local mall.
Alternative Approaches
There are two alternative approaches that you may want to consider. One may allow you to build customer loyalty and possibly upsell to your present base and the other may help in attracting new customers.
The first approach is to simply ask your present customers what they want. People very often become thrilled that someone wanted their opinion and they’re anxious to give it. This can be done by simply enclosing a questionnaire and a return envelope with their existing order. You may find out that there is something they want that you can deliver and profit on.
The second approach is to ask for references. You can offer an incentive such as a percentage off on their next order if they do. You can also offer an incentive to the people they refer in order to get them to buy from you.
Both methods allow you to build your customer base and loyalty. Remember, millennials like to have their opinions recognized, it is part of their exclusiveness, and generation x remains extremely loyal once that loyalty is gained.
World of Consumers
In the past your competition was the person down the street or across town. That isn’t the case anymore. With the advent of the internet your competition could be located in Brazil, Australia, or somewhere in Europe. I know of an Australian company that has major sales in the United States. I know a management consultant from New Zealand who has clients from New York to San Francisco. I am aware of a health supplement supplier that takes orders by the internet and mails their products throughout world.
The point is though that if you have competition throughout the world, you also have potential consumers throughout the world. There certainly are differences in likes and dislikes from one area to another, but there are also a great number of similarities among generations from different areas of the world. There are 330 million people in the United States and 741 million people in Europe. That is a large number of potential customers.
You may have an advantage in some areas. For example, your product or a similar one may not be available in that location. Raw materials used in local manufacturing may have to be imported. This factor may give you a price advantage. There are many factors that can come into play. To gain more customers, you need to take advantage of all these possibilities.
Summary
You must treat consumers from each generation separately. You will probably need three separate channels of advertising. Relying on one form of advertising will not suffice. For example, many Baby Boomers are on Facebook® but very few Millennials are. The millennial population prefers video demonstrations. To reach them you need a separate form of advertising.
Don’t overlook the fact that there is friction between the three generations stemming from the different priorities of each generation. This friction can put a serious dent in your sales. For example, look at the story of Cadillac®. This example illustrates how one form of advertising may be detrimental to your goals.
Up until the 1980s Cadillac® sold every car manufactured. There were no left-overs when they advertise exclusively to the older generations. Since then Cadillac® has been attempting to sell its cars to a younger generation while holding on to their Baby Boomer and older base. It is a good thought, but one that does not work out in practice. The older generation looked at Cadillac® as a reward for years of hard work and some were not happy with the emphasis now “on new upstarts”. Internationally, Cadillac® sales have increased. However, unit sales in the United States have lagged although price increases mask this. Model year end left-overs are now common.
The story of Cadillac® is one where exclusiveness is missing and how the divide between generations can affect sales. Many in the generations, Millennial, Generation X, or Baby Boomer members are not happy with the approach.
You can multiply your customer base many times by not restricting yourself to your immediate surroundings. Consumers are present throughout the world and the actual divide between generations may or may not be as wide as in the United States. This, in itself can go a long way in expanding your sales.
If you have any further suggestions, do not keep it to yourself. Help your fellow readers!
If you have any questions, comments or suggestions drop me a line at rdm@datastats.com.
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