Insights

Check the Data Before Your Company Starts Chasing Those Elusive Millennials

A colleague of mine recently asked me a question.  She read an article regarding one of the largest hotel chains in the world and their desire to enhance their properties to cater more to millennials.  The question was, “is this a good idea?”

When approached with a question like this I always like to give my opinion, but in reflection I believe I am totally incapable of answering.  So my answer?  It depends.  It’s not that I don’t have the capability to answer the question, I just don’t have sufficient information.

For years I have preached to be wary of your competition and their decisions.  So many times, executives want to jump on the bandwagon when the competition does something new.  What they don’t realize is that the competitors’ strategies may be bad or may only work in their circumstances because their businesses are slightly different.  The proper approach is to understand what your competition is doing, but then make decisions for your business based on your data.

Because of this reason, I cannot answer if this hotel chain should pursue the strategy of catering to millennials.  However, I do know how I would approach the scenario if I was inside this organization and it was presented to me:

Understand My Core Customer

Millennials get a lot of headlines these days.  So many companies are becoming experts in defining certain behavioral traits of the next generation.  However, are these the core customers of the organization?  In the case of this hotel brand, I would first determine whether there are any repercussions for pursuing this strategy in regards to my core customer.  If my core customer is an older demographic, I might hesitate to make changes.

Be Cautious of Lumping All Millennials Together

The millennial generation is a huge group of individuals.  Changing the entire culture of the company to better serve the “general millennial” may not be the best course of action.  I would seek to understand how millennials currently interact with the brand.  So much is being made about how marketing to millennials is very different than any other generation before.  They are generally very tech savvy, live in a mobile world and desire experiences when traveling.  This is very different from their grandparents’ behaviors.

But is this the case inside this particular organization?  I would seek to understand if millennials are already interacting and spending money with the brand.  Are they increasing in numbers?  Which brands within the portfolio have more penetration with millennials if any?  Do I really have a millennial problem?

Creating surveys for millennial customers that go beyond the typical, “How was your stay?” or “Would you recommend us?” would be a first step.  I would also compare past data with this current generation.  Twenty years ago did 25 year olds have the same transactional behavior as the current 25 year olds?  If the answer is, “Yes, they are very similar”, I might be leery of changing the strategy.

Age Related Spending and Frequency Data

A data-driven organization has years of transactional data at their fingertips.  Age is a huge dimension I always believe in analyzing.  So when looking at the past, are there trends which are disturbing when compared to this new generation?  Do millennials come in with the same frequency as Gen Xers did when they were at the same age?  Do they spend the same amount per trip?  Do they have the same return rate?

Identifying a problem, if there is any, is a key component to this question.  It could be that the brand is fine in the eyes of millennials, but there needs to be a minor tweak in the offerings.  Maybe offering better in-room technology or not charging for Wi-Fi would make the difference.

Cluster the Group

There are great 3rd party consumer segmentation systems (clusters) already available.  For instance, Experian Mosaic Clusters already place millennials into many segments.  I would understand where my millennial customers fall within these clusters.  Once identified, I would understand all of their transactional behaviors by cluster and determine if there are groups which identify more with my brand.  I would target only those individuals, instead of putting my core customers at risk trying to chase customers who do not identify with my brand at all.

Use your data.  Just because everyone is saying that millennials act differently and organizations need to adjust, doesn’t necessarily mean your organization must.  Only if there is a problem with this group of customers should the organization readjust.  If there is not a problem, maybe making small adjustments to stay in front of the next generation is the proper course.

Another way to handle different groups is through messaging and the channels in which the organization communicates.  It could be the customer experience is perfectly acceptable to millennials, but maybe the way in which the brand communicates is a turnoff.  Test channels and messaging for the group to see if there is a problem with the brand at all.

All the answers are in the data.  Dig deep to find them.  Don’t follow, lead with your data.  Only you know your business and no one can tell you what’s right.

Article written by Brian Gress
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