Relationship Marketing: The Key to the Gen Y Conundrum

Marketing, as a discipline, has evolved dramatically over time to match each new stage of product innovation and technological advancement. In years past, marketers relied heavily on the “mass marketing” approach designed to hit as many people with as few messages as possible. For a while, that worked. Modern consumers, however, have evolved to appreciate a more diverse view that lends itself more to customization than mass appeal. Thus pull marketing, an approach designed to stimulate grassroots demand, was born, and with it, came a focus on building relationships between consumers and brands. Relationship marketing, with its focus on consumer engagement, improves products and brand loyalty, while allowing increasingly savvy consumers to leverage brand image, leading to a more complex, but also more symbiotic relationship between market and marketer than ever before.

A key impetus to this shift toward relationship-based marketing strategy emerged as “Gen Y,” or the “Millennium Generation” began to reach buying age. This segment is both a dream and nightmare for marketers, who have coined their own descriptive phrase for the 10-25 year old demographic. “The unreachables,” according to USA Today’s Bruce Horovitz, are computer savvy, ethnically diverse, empowered young people who spend roughly $200 billion annually and don’t read or watch TV as much as previous generations. They have grown up competently navigating through cyberspace, finding answers to their own questions and curiosities and being encouraged to contribute to adult discussions. They have friends and family with different ethnicities and backgrounds. And they were born into an environment completely saturated with marketing ploys. Luckily for marketers, this has not spawned a Gen X-like cynicism, but instead, a strategic consumption and absorption of media and advertising. In fact, many Gen Y-ers are now putting marketing/branding efforts to their own personal use as a means of self-expression. They live in a fast-paced environment that demands constant multi-tasking in thought as well as action. Identifying with and displaying brands with distinct meaning can serve as an easy cue to others about who they are and what they believe and also help them identify like-minded people among the multitude with whom they interact on a daily basis.

A study conducted by Saatchi & Saatchi designed to delve a bit deeper into this growing trend found that, “the defining value of this generation is "connexity": the importance of staying connected in order to grow… As a result, for brands to succeed tomorrow, they must forge connections with consumers that go beyond simple product function.” This means that marketers must show a genuine investment in their potential consumers: their likes, dislikes, and, most importantly, personality, in order to appeal to them. As companies try to evolve to better reach their target market, they create products and brand image that better suit consumers’ needs and desires because consumers are often actively involved in the development process. Consequently, companies build brand equity as consumers respond to the ownership they take in the brand. Perhaps the largest shot-in-the-arm for relationship marketing came in the form of networking sites such as myspace and facebook. Originally used for networking among individuals, these sites have opened up a whole new opportunity for marketers seeking to build relationships with their consumers. Companies have created profiles on myspace in order to “friend” loyal customers giving them access to discounts or other perks. In return, they are prominently displayed on the “friend’s” page where the brand is sure to get exposure to like-minded individuals, thus increasing brand permeation in the target population. Marketers utilize facebook “groups,” an application that allows users to create and search for pages devoted to their interests, in much the same way.

Marketing has become a dynamic enterprise. Young, modern consumers demand more from the brands that court their discretionary income, but once they have proven themselves, consumers also give back to the brand. Marketers’ main concern at present is reaching out to their target market in ways that show their sincere interest in each and every consumer and everything about which they care deeply. Bottom line: the more a brand can behave like a friend or facilitate social interaction or self-image, the more successful that brand will be at capturing the elusive Millennium Generation.