Author: Paul Aguraiuja
A video uploaded on 9 April 2017 showed how a passenger was dragged from an overbooked United Airlines airplane after he refused to be transferred to a later flight based on random selection. This is not the way to earn the trust and confidence of consumers. The video made by one person had such an impact on the respectable brand, established in 1931, that United’s shares were 13% down even one year after the incident, while their S&P index was up 12%. This outcome cannot be attributed solely to the video in question, because United Airlines made other missteps in that year, but the video and its widespread distribution was certainly a starting point.
The value of a brand depends on its trustworthiness, impact and, increasingly, personalisation. The latter is growing gradually more important and, with the arrival of the new Generation Z among active consumers, the use of personalisation as a marketing tool is likely to become a matter of course.
Currently, the greatest share of consumption capacity in monetary terms is held by Generation X, i.e., people born from the mid-1960s to the early 1980s. The generation of Millennials, i.e., those born from the mid-1980s to the turn of the century, is taking an increasing role in the employment landscape. However, by the year 2028, which is only 10 years from now, the people of Generation Z who were born in the new millennium will constitute the greatest share of the world’s population. The first of them are currently finishing secondary school, while the last are still going to kindergarten. An average representative of Generation Z is at present in Grade 6 but, in 10 years, this generation will make up 30% of the global population and will start setting trends in consumer behaviour.
Previous generations have mostly grown up in conditions bound to a particular location – some had better access to education, some experienced war, some had problems with drinking water, etc. People had different environments of growth. However, members of Generation Z, be they from Uganda or from Latvia, have all grown up using the same services in their smartphones. A Generation Z kid from Merivälja, Tallinn, is likely to have more in common with a representative of the same generation from Nepal than his own grandmother from the same city.
Marketers need to be prepared for communication with people who may have never seen a road atlas, who do not have photo albums on their shelves and who have never sent a letter on paper. No matter where they are in the world, Generation Z has not experienced life before Google.
It will not take long before content sharing in small, and often closed, groups becomes a commonplace occurrence. This will be different from the behaviour of Millennials whose communication in Facebook is much more open. Tolerance is an integral part of life for the new generation, with young people adopting a post-race and post-gender worldview as something self-evident. Being different is the new cool and discrimination in any form will be something left to the previous generation.
Generation Z will also have a significantly changed idea of employment. Many employers have complained that Millennials do not care for work and prefer working arrangements that accommodate other aspects of their lives. However, the subsequent generation has seen and experienced the global recession and crises through the eyes of their parents, making them realise the importance of employment and, unlike Millennials, quite willing to work.
I also believe that world-changing entrepreneurs, who value and preach social entrepreneurship and civic empowerment, will gain the status of idols, alongside hip hop artists.
Furthermore, the arrival of Generation Z will result in greater hyper-connectivity, i.e., people being constantly connected through multiple means of communication. While I feel overwhelmed when I hear simultaneous alerts from Skype, WhatsApp, Messenger and Slack on my phone, this is apparently not a problem for the new generation. Being constantly connected to everyone can provide incredible amplification to the voice of a single individual, as is illustrated by the aforementioned United Airlines case.
Influence and trust
Hyper-connectivity enables consumers to deliver their opinions to millions of people in a few seconds, which highlights the crucial importance of earning and maintaining trust. Studies show that trust in major corporations has dropped drastically over the past five years in large countries. While 30% of people, on average, did not trust major corporations five years ago, this share is now at 55%.
The change is associated with the influx of different values of the new generation. Their values include social responsibility and environmentalism and, as time progresses, they are increasingly prepared to pay for them. Trust can only be earned by actually cutting the rubbish. Very soon, it will be simply impossible to offer substandard products or services, because everyone will find out at once.
Like today, some future consumers and their messages will have more influence than others. The current major influencers include popstars, athletes and models who have tens or hundreds of thousands of followers in social media and who are actively used in marketing. However, the future trend is towards an increasing number of micro-influencers, i.e., people with around 1,000 followers. Such groups are characterised by a more authentic and personal influence. Executed well, it can be more believable and generate stronger trust. Particularly for Generation Z, using micro-influencers to deliver their message to consumers becomes an increasingly strategic endeavour.
As advertising creators, we are used to targeting the classic demographic aspects, such as age, gender, place of residence, occupation, income, etc. However, using micro-influencers opens the door to micro-targeting, based on data and analytics, with the addition of criteria such as opinion, mood, lifestyle and values.
Data as commodity
The amount of data collected about any individual at any given moment of time can be huge. It can include location data, browsing history, buying behaviour, travel patterns and social media activity. The use of this data is now extensively regulated, thanks to the GDPR, and data have become a kind of currency that we can exchange for some type of gain. A recent study by A.T. Kearney indicates that a third of the people in Germany and France would agree to exchange their data for something useful. In the USA and China, the share of people willing to do so is even higher, with 41% and 45%, respectively. The primary exchange goods that people would like to receive for their data can be described as personally relevant recommendations, such as restaurants catering to our dietary preferences, clothing that matches our lifestyle, or concerts corresponding to our musical tastes. Organisations can use data to learn much more about their clients, which enables them to offer consumers personally meaningful experiences.
What should we do?
It is worthwhile to remember three forward-looking implications:
- Trust can only be earned by actually cutting the rubbish, because everyone will learn the truth anyway – the risk is too high.
- Positive messages can be boosted by identifying micro-influencers of very narrow target groups.
- Data-based personalisation helps organisations develop and learn more about consumers.
In practical terms, it would be wise to stay ahead of the curve by starting to introduce new marketing activities, which will soon become highly relevant. I would suggest the following practical measures:
- Invest in Direct 2 Consumer solutions: develop a set of closely related D2C groups/communities where consumers can receive relevant content and service by communicating amongst themselves and directly with the organisation. This process can be facilitated by automation of marketing.
- Review the segmentation of your clients: buyer persona templates should be more specific and narrowly defined, based on internal values of consumers instead of external characteristics. The analysis required for segmentation can, to a large extent, be performed by AI, with inputs provided by consumers themselves as they share their data.
- Adjust your marketing budgets to reflect the situation of hyper-connectivity: greater attention on digital channels and addition of new indicators to marketing analytics. In addition, some funds should be reserved for quick response capacity to remain in sync with current trends.
- Identify appropriate micro-influencers for your target groups and turn them into your ambassadors: communities can be grown around influencers.
- Formulate your values to reflect the ethical beliefs of your target groups: communicate them to your clients and let them see, on a regular basis, how you uphold your values.
If you’re ready to deal with this topic in your organization, please write to me . I’m happy to help!