One in three Americans will be millennials by 2020.
At more than 73 million strong, millennials are the largest generation. Their sheer size and buying power has a major impact on all areas of our economy—and home ownership is no different.
We think of millennials as young kids, finishing up college and starting their careers—this is no longer the case. Most millennials are in their 30s, with the oldest turning 40 in less than two short years. Yes, you read that right, the oldest millennials are almost 40 years old. The members of this generation are buying their first homes. They make up nearly 70% of first-time homebuyers and is the largest group of homebuyers overall at more than a third (34%) of all homes purchased.
So, what does all this mean? You’re about to have a lot of new prospective customers! This is great news but what do you need to know about this cohort? And more importantly, how do you target and engage with this coveted generation to capture their business and make them your customer?
In many ways, millennials are like any other consumer, but there are some vital key differences that you need to know. These characteristics are critical to successfully selling to millennials. We’ve all know basic facts about them such as they have a ton of student load debt and are addicted to technology. But, what else do you need to know?
Take a look at these 10 takeaways to help you learn the best way to make this generation your next best customer:
1. Spending Power – $24 Trillion
Right now, millennials make up the majority of people in the workplace at 35%. Most are well into their careers, which means this generation is in control of massive amounts of money. It’s estimated that as a whole they will be worth more than $24 trillion by 2020.
Millennials have massive spending power and are in charge of the economy. You’ve probably heard in the news about the brands and industries that millennials have had a massive impact on from diamonds and beer to motorcycles and Applebee’s. Many of these brands and industries have not learned to evolve and adapt with millennials, and are now seeing a decline in sales.
How can you learn from others mistakes:
Don’t assume millennials will buy from you simply because you offer a service and product they need. You must learn what makes them tick and find the best way to connect. More importantly, this is not a generation you can dismiss. They’re large and have a lot of spending power. They are no longer children or young adults but are viable customers with money to spend.
2. Value vs Price
Millennials came to age during the Great Recession. They make less money than their parents at the same stage in their life. They are careful with their money and thoughtful with their purchases, especially larger ones. But this doesn’t mean they won’t spend money on something they value. In fact, millennials value luxury and high-end features in their home—especially high-tech items.
How can you leverage this knowledge?
Even though millennials are frugal spenders, they are value shoppers, not prices shoppers. Don’t automatically assume that you need to offer the lowest price to millennials. Give them a few options and use the “good, better, best” approach. Furthermore, consider products that have multiple functions such as a lighting transformer with dimming, scheduling, and color changing or products that connect to their smart-home systems. Products like these ooze value and will pique their interest.
3. Research. Research. Research.
Millennials are informed consumers. Eight out of ten millennials read reviews before they make a purchase. And, 54% research an item or service online before buying. Millennials want to make sure they are making the best educated decision when making a purchase, especially with large ticket items and services.
How do you use this valuable insight?
First and foremost, with 80% of millennials reading online reviews before making a purchase, it’s absolutely critical to make sure that you are managing your online reputation. See our recommendations for making sure your reviews stand out from the competition.
Second, it’s important that the products you sell and their manufacturers have a positive online reputation. If you wouldn’t put a product in your own home, then it’s probably best not to offer it as an option.
Finally, make sure you have easy access to information about your products because millennials will ask. Build those partnerships with industry experts like Central to participate in training courses and vendor demonstrations, and leverage their product marketing tools.
4. Comfortable Trusting Experts
Millennials are 44% more likely to trust experts, who happen to be strangers, than other generations. This is great news for you because you are an expert!
How do you leverage this information?
With millennials, you can’t just be an expert. You also need to SHOW millennials that you are an expert. How do you do that? Millennials are 247% more likely to be influenced by blogs or social networking sites. They’re going to look at websites and do research before they purchase a product. So, it’s important to make sure your company keeps its website and social channels up-to-date. Take before and after photos of projects, share insightful articles about the industry, and give your recommendations on the products you love. For your website, make sure it’s current, easy to navigate, visual and concise.
5. Care About the Environment & Worry About Climate Change
It’s no secret that millennials worry about climate change and the future of the environment. Climate change is the biggest concern for nearly half of all millennials, and 78 percent are willing and actively changing their lifestyle to protect the environment. Furthermore, 70 percent of them said that a company’s environmental focus impacts their purchasing decisions.
Why is this important for your business?
These stats, more than any other on this list, are eye opening. As millennials and the younger generations grow older, businesses need to show that they are good stewards of the environment. Millennials are willing to do their part and they expect businesses to do the same. It is no longer an option to ignore sustainable or low environmental impact products. It is critical that you add these products to your business and that you offer them as an option on every job. Whether it’s all-natural fertilizers, organic pesticides, water-saving controllers, or LED lighting options—millennials want an environmentally friendly choice.
6. Obsessed with Technology & Innovation
Millennials are the first generation to be digital natives, meaning they were the first to grow up alongside communications technology. They are obsessed with technology and crave innovation. They are more than 2.5 times as likely to be early adopters to new technology and the vast majority, 92 percent, own a smartphone.
How can this information help your business?
We all know that today’s homes are getting smarter and manufacturers are releasing new products every year (sometimes even faster). Millennials are the perfect consumer for these products because they expect their homes to be “smart.” Millennials want to connect to their home from their smartphones and access their home from anywhere in the world. Even better, 86% of millennials are willing to pay more for this smart home technology. When working with millennials make sure you offer these devices, it makes for an easy upsell.
7. Dog Lovers
Everyone loves their dogs but millennials REALLY love their dogs. More than a third of millennials purchased a home because they wanted to have space for their dog. And, nearly half of the millennials that do not have a home, desire one because of their dog. This is one of the most sited reasons for purchasing or wanting to purchase a home for millennials, above marriage and children.
What does this mean for your business?
Nearly 70% of millennials see their dog as family and as a group spend $67 billion annually. If millennials are willing to buy a house for their dog, imagine how important it is for them to have a safe environment for their pets. Pet safe and family safe products are vital to this group of homeowners. Make sure that you are offering pet safe fertilizers and chemicals.
8. Borrow Money for Renovation Projects
Nearly 70% of millennials are willing to borrow money to afford a home renovation project. These homeowners plan to borrow an average of $19,000, with popular renovation projects focusing on kitchens, bathrooms, landscaping, and creating decks or other outdoor spaces.
How can this information help your business grow?
Millennials are not afraid to borrow money for their home projects. Make sure your business offers a consumer financing option, so that these homeowners choose you and not your competitor.
Offering a consumer financing option will add value to your service. Remember, millennials are value shoppers, not price shoppers. This means you have the opportunity to help millennials customize their home, while upselling the project with high-end and efficient products. And price objections will be minimal. By adding value to their home, you help your business grow.
9. Outsource Home Management to Enjoy Experiences
The average American spends 44 hours a week at work and commutes another five hours a week. Couple that with networking events, errands, making dinner, etc., and people do not get too much downtime. Because of this, millennials are outsourcing their home management from dog walkers and laundry to house cleaning and landscaping. Millennials would rather spend their time doing other things, and 74% prioritize experiences in their downtime.
What does this mean?
Unlike other generations, millennials are not into doing it themselves. They are outsourcing services such as lawn maintenance and landscaping—and they’re OK paying for it. Lock these homeowners into an ongoing service plan to keep them happy and your business growing.
10. Authenticity Matters
90% of millennials say that authenticity is important to them when deciding on a company to hire. Millennials want to work with a company that has a story, a company they feel they can trust, and a company they can have an ongoing long-term relationship with.
Why is this important for your business?
These homeowners prefer working with real, no bullshit businesses. This information is great to know for your marketing and customer service efforts. Be honest, be straightforward, tell your amazing story, share your projects and insights, and you’ll be able to connect with this coveted group.