Business and Operations
Marketing to millennials
By Tony Palermo
It all comes down to knowing your ideal customer
By Tony Palermo
According to 2011 Statistics Canada census data, 9.1 million people, or approximately 27 per cent of the total population, belong to the millennial generation.
According to 2011 Statistics Canada census data, 9.1 million people, or approximately 27 per cent of the total population, belong to the millennial generation. Also known as gen Y, StatsCan identifies this group as people who, in 2011, were aged between 19 and 39 (born between 1982 and 1992). The definitions vary, with other sources identifying millennials as those who were born between 1980 and 2000.
Representing over a quarter of the population, gen Y is an important market pizzeria owners can’t ignore. So, how best to appeal to them?
|Although gen Ys generally value community, convenience, technology and a higher-end product, grouping them together is a mistake.|
Know your ideal customer
Noah Fleming is a marketing and customer retention expert who has worked with companies of all sizes, including those in the food and beverage industry. He says that every company’s customers are different and his most successful clients clearly understand who makes up their current client base and who their ideal customer is.
In his book Evergreen: Cultivate the enduring customer loyalty that keeps your business thriving, Fleming says great companies spend time continually cultivating and nurturing relationships with their customers, from even before they become customers. It’s an investment, he says, that creates strong customer relationships, with customer loyalty becoming a key factor of the relationship. Like the roots of an 800-year-old tree, this loyalty eventually becomes capable of supporting tremendous growth. This, explains Fleming, is the kind of company that becomes “evergreen” and lasting.
Fleming says companies that are trying to do what he calls “Sriracha Marketing” to appeal to gen Y– basically trying to appeal to them with fads in the belief that “cool attracts cool” – are examples of the wrong approach. Sriracha hot sauce, ginger and craft beers are in vogue right now, but Fleming says when companies try to jump on the “cool attracts cool” bandwagon with no clear direction, it becomes more of a gimmick than an effective marketing strategy that connects, engages and attracts your ideal customer.
Likewise, Fleming says grouping all gen Ys together is a mistake, and that even though this group generally values community, convenience, technology and a higher-end product, there is no one catch-all way to connect with them all.
“For example, I have friends that wouldn’t touch Domino’s Pizza, regardless of convenience, but these same friends would easily spend $30 for a high-end pie,” says Fleming. “But Domino’s Pizza is doing extremely well marketing to a certain segment of millennials, specifically by keeping in mind their budget and making it easy and convenient for millennials to order their pizza using a mobile app.”
As he says, Domino’s provides an emotionally engaging experience by making it extremely easy to order their food.
“Domino’s has taken the headache out of it,” says Fleming. “The convenience factor is about talking to the customer the way that they want to be talked to. And gen Ys are on sites like Facebook, Yelp, and Twitter, and the majority of them have mobile phones.”
Gen Y an important demographic
“Millennials are an extremely important demographic for us,” says Jeff Kacmarek, vice-president, Marketing & New Product Development, with Domino’s Pizza of Canada. “It’s our key demographic but our biggest challenge too.”
A July 10, 2013, eMarketer article says males and females aged 18 to 34 were more likely than their 35- to 64-year-old counterparts to engage in nearly every online shopping activity, with 40 per cent of males and 33 per cent of females in the younger age group reporting that, if they could, they would buy everything online.
Kacmarek says online ordering makes up about 35 per cent of Domino’s business, initiated from either a computer or mobile device. As he says, various studies show gen Y has the highest use of technology applications (apps), like those found on a mobile device, with women accounting for the majority of that use. It makes sense, says Kacmarek, because women are typically the food managers of the house.
Still, Kacmarek views gen Y as a spectrum based on age. On the one end, the youngest gen Ys are busy with school, social life and work. At the other end, they are typically young parents who are busy with work, kids, their kids’ activities and trying to manage a household.
Either way, both ends of the gen Y spectrum that Domino’s targets are busy and value convenience.
When all of this is taken into account, it’s for this reason Domino’s Pizza is going to continue focusing on convenience and service, while pushing the envelope on the technology front. If fact, Domino’s expects to launch an iPad app in Q1 2015 and Domino’s U.S. is currently experimenting with a voice-activated app.
Kacmarek notes that marketing has changed, especially when it comes to gen Y, explaining it’s all about having a conversation now.
“It’s not a push type of relationship like before where you throw information out at people,” says Kacmarek. “Now, it’s all about developing a dialogue with your consumer. It’s about having a conversation.”
Fleming agrees, saying another key is letting the customer tell your story online, for example, on Facebook or restaurant review sites. It’s about engaging them in the conversation and creating a sense of community.
The conversation is happening on social media sites such as Twitter and Facebook, and, with over 10 million people who like the Domino’s Pizza Facebook page, that’s a lot of people to be engaging.
Comes down to good business
While Fleming says restaurants can generally get a decent mobile app for under $3,000, not everyone should be rushing out to implement one.
“Again, it all comes down to knowing who your ideal customer is,” says Fleming. “For example, a small and unique pizza restaurant won’t have much use for an app that sends customers a $9 pizza delivered in 30 minutes.”
Smaller restaurants will more likely want to target the millennials who are willing to spend more money and wait for a higher-quality product.
“These millennials prefer the little ‘hole in the wall’ where, as an example, they can get an authentic Neapolitan pizza, as opposed to getting it from a cheaper, perhaps faster, place that offers a knock-off version,” says Fleming.
To appeal to this group, your product and atmosphere needs to be emotionally engaging.
“Perhaps that’s highlighting the fact that you use a wood oven and fresh, quality ingredients,” explains Fleming. “As for atmosphere, it’s about building that sense of family and community.”
1000 Islands Restaurant and Pizzeria in Brockville, Ontario, is a family-owned business that has been operating for over 45 years. The main page of their website clearly states their view that quality, while always in demand, takes time. Making clear this is a family-run business, the website creates a sense of community by introducing the team and showing pictures of customers enjoying the atmosphere and product.
The website also has a page of customer testimonials, and provides links to all of the major restaurant review websites, encouraging people to read the reviews and share their thoughts online.
Looking at the restaurant’s website, Fleming agrees that 1000 Islands Restaurant and Pizzeria appear to be appealing to many, even if it is inadvertently.
Co-owner George Sabaziotis says he’s eliminated Yellow Pages advertising and considerably reduced his newspaper advertising, recognizing that word-of-mouth has been his best form of promotion. He says that while millennials make up a good part of his business, his largest demographic is between 40 and 60 years old. Still, he’s not intentionally targeting a specific demographic, one way or the other.
“The Brockville market is too small to appeal to only one segment of the population,” explains Sabaziotis. “Really, my marketing is about maintaining the quality and atmosphere my parents, Kanella and Nikita, worked hard to create.”
In addition to using fresh ingredients and making everything to order, the Sabaziotis family has created a familial, inviting atmosphere where pictures of their customers are displayed throughout the restaurant.
“There are no random pictures of things that don’t mean anything,” says Sabaziotis. “We hang pictures of our customers as a thankyou and to show our appreciation to them. It’s nice. People are constantly scanning the pictures to see if they recognize anyone, and everyone always gets a kick out of it when they do.”
He also does things like acknowledge his regulars with Christmas cards, giving out a few gift certificates along the way. Sabaziotis says his definition of a regular isn’t necessarily someone who eats at his restaurant every day or week. As he explains, it could be someone who is only there every six months when they’re in town or someone who drives a considerable distance every so often just to have their product.
“It’s just a small gesture to recognize our customers and say thank you,” says Sabaziotis, who estimates he signs upwards of 600 cards. “They’re spending their hard-earned money at my restaurant. I realize they could go elsewhere.”
At the end of the day, Sabaziotis says, his philosophy on marketing is it just comes down to providing a great product and inviting atmosphere.
“I’m providing the type of experience I would want myself.”