Millennials, born between 1980 and 1999, are now the largest living generation—but if you're trying to target the millennial persona, you're making a mistake. Take another look at that first sentence to see why: we're talking about a broad range of people between the ages of 18 and 37 with very different banking needs.
The idea of targeting “millennials” comes from a demographic perspective that is not valuable when trying to understand consumers and build relationships with them—and it's frustrating for both the customer and the business. Banks trying to sift through demographic data on millennials often end up puzzling over contradictory results. Do millennials hate banks or love them? Do they want access to detailed financial information or do they want to relate to a brand through its Instragram account?
Let's take another look at what we think we know about millennials. Because many of them grew up with access to personal computers, home internet, and smart phones, we often generalize and say that millennials want robust online and mobile banking. But the traits and banking preferences attributed to millennials can actually be attributed to any generation. In fact, most people today access their checking accounts online and use mobile banking. Furthermore, this approach is focused on product priorities rather than putting market segments first.
When we focus on demographic data, we are trying to guess who our target audience is rather than thinking about the what they are trying to accomplish. When we try to assign lifestyle goals to certain demographics, we end up targeting those vague demographics instead of actual customer needs.
Even trying to segment this group based on demographics is a trap. While older millennials might be more likely to be focused on savings and retirement and younger millennials might be more likely to be relying on their parents, these age-based assumptions are still flawed. Instead, companies should be defining their segment audiences based on needs, or Jobs-to-Be-Done.
Jobs-to-be-Done: A Better Approach
Mortgage brokers shouldn't be targeting older millennials or younger millennials; their target audience should be first-time homebuyers (or second-time homebuyers, or people shopping for income properties). Anyone, regardless of age, could potentially be a first-time homebuyer or a retirement account shopper. Defining situational and lifestyle factors around a specific job-to-be-done is a much more effective way to define a market. Once you define the segment you want to target based on needs—not demographics—you can define the value of your offer and how to communicate that.
It makes more sense to use lifestyle segmentation than a broad generational label. Are you creating products for savers or borrowers? Are you helping someone accomplish the job of buying their first home? Or are you helping someone find an alternative to traditional banking?
If you can't clearly identify your target market based on their needs, you can't create a successful communication strategy. Instead of targeting a broad category like millennials, that is in turn made up of multiple demographics, banks need to think about segments and identify the behaviors and needs associated with a specific outcome. Successful products and services are those that appeal to a range of people with a targeted need.
In my next post: How to identify your target segments.