• November 1, 2006
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

X Ways

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Generation X is the undefined generation, the unknown and unpredictable quantity that remains outside the corporate ken (the name comes from a 1991 novel, Douglas Coupland's Generation X: Tales for an Accelerated Culture). At least, many Xers think of themselves this way, disloyal to brands and skeptical of big business. Boldness, youthful rebellion, and benign anarchy remain the hallmarks of the generation, even as it begins to have families and start businesses. However, Gen X is not so inscrutable as it would have us believe. The art and science of demographics is devoted to figuring out the behavior of groups with common factors, regardless of how diverse they may seem at first. Xers have their unique traits, but when you're dealing with about 50 million Americans between the ages of 30 and 41, you're going to find some commonalities as well. Revenge of the Baby-Sat
"Generation X is defined chronologically--they're the group that comes after the Baby Boom--but it's also a psychographic," says Caroline Barry, president and founder of PortiCo Research. "They're more skeptical, more cautious, and very aware of the possibility of being manipulated." Her project manager colleague Michelle Schaefer adds, "Xers are classified by the lives they lead. It's the first generation that was largely a product of divorce. These are the latchkey kids, more cynical, and many came from homes where both parents were working." Consider that Gen X was the group that made the cell phone take off--this untethered form of communication caught the eyes (and ears) of a generation because they could relate to being without a land line, or trying to reach somebody who was in transit. Technology like cell phones and the Internet has changed the way Generation X and later generations think and act. "As a result of the Internet and mobile technology, Generation X has high expectations around receiving easy and personalized service at all times and companies need to deliver on this by talking to them based on their behaviors, needs, and personal interests," says Megan Van Someren, director of strategic planning at marketing and advertising agency Wunderman. "This is a generation that likes to talk and share. Both Generation X and Y will talk about and share good and bad experiences across their networks of friends, colleagues, and families," Van Someren says. "Smart companies are figuring out ways to leverage the idea of community networks." The Parent Trap Mothers (and fathers, of course) are an important part of the equations for Gen X, especially as more of them are becoming parents themselves and seeing the other side of their experience as young people. "Gen X is interesting, in that they were identified sooner as the new, young generation, and were often described as slackers--now they're becoming parents," Schaefer says. "Their direct reactions are to correct the wrongs they perceived in their own parents and families growing up." X women are going through more changes than their male counterparts. "Gen X women are looking for a career where they can work and still be parents," Barry says. Even though women's equality in the workplace was turbocharged by the Boomers, a lot of them didn't take advantage of the possibilities they created, and instead passed the drive to their daughters. This is not to say that Gen Xers with a Y chromosome are still slacking off, however. "Although Generation X shares a common work ethic and drive to succeed with Baby Boomers, they are hard wired to embrace and even expect ongoing technology advancements similar to Generation Y," Van Someren says. However, parental Xers are generally not as tech-savvy as their kids would like them to be. Remember being a teenager? "Marketers have really empowered the younger generations, starting with Gen X. Companies knew they'd eventually be helping their parents with decisions, especially in regard to technology," Barry says. "They've grown up feeling empowered, and also feeling frustrated by their parents because of the knowledge gap." Schaefer adds that Generation Y and the Millennials (the latest generation) grew up with technology and are more powerful consumers because of it, a fact not lost on Mom and Dad. "Their Gen X parents have learned from them to be more comfortable with online channels like email and text messaging." This has led to more discussion about purchases, Schaefer says. "Xers make purchasing decisions with thought for and input from the rest of their family. Previous generations didn't do this very much; the head of household would make a decision on behalf of the family and its members." Members of Generation X have redefined their goals and indicators of success to include more personal satisfaction, even at the cost of financial or social status. "Success is defined by many Xers as family." Winning Hearts and Minds So what does all this mean to the company that is trying to market to Xers? How does the smart business exploit these characteristics and sell to them? The first step is to be very careful with your perspective, Barry says. "Don't treat the relationship with Xers as 'exploiting' or 'selling to' them. Xers are very sensitive about this--they'd rather feel they are part of a dialogue with the company." Van Someren recommends a straightforward approach. "Techniques that don't come across as sales or marketing techniques work the best. Today there is so much noise out there and this generation has learned to ignore the noise that is not interesting or relevant to them," she says. "They buy brands they believe in, services that are tailored to their needs and products that are recommended to them." Thus, mass marketing and selling can fall on deaf ears, and fake personalization can work against you. So knowing what isn't likely to work, what is? Van Someren names three consumer drivers as essential for engaging Generation X: creative appreciation, relevance and convenience, and sense of community. "Companies need to push the boundaries of creativity. [It's] no surprise that Apple is a perfect example; not only do they have beautiful products and a fashionable in-store experience, but they are even creative in the way they provide service." Generation X is an active group of consumers, according to Van Someren. "They are willing to form relationships with brands assuming, one, they are given control to engage in the relationship when they choose, and two, they will get a lot out of the relationship," Van Someren says. "Online services such as eBay, Amazon, and iTunes have excellent relationships with this generation because they are available any time of the day or night; they remember every interaction; they help make recommendations based on past behavior, interest, and other like-minded individuals; and they deliver great service." "Empower people and give them a new way of doing business," Schaefer recommends, but it's important to keep the tone light when possible. "Humorous ads seem to work best--Washington Mutual's 'old school bankers' is a great example of combining [empowerment and humor], showing off the difference between generations." Tactical Yet Tactile Few things have empowered and differentiated generations more emphatically than the Internet. Email, Web sites, and instant messaging have put information and communication literally at our fingertips, and Generation X was the first to take large advantage of them. Despite this, Gen X remains rooted in the idea that buying products is more a matter of bricks and mortar than click-to-order. This is not to say that Xers don't engage in online shopping and buying, but it's not necessarily the first choice. "We picture typical Gen Xers doing product research online but then they go into the store to buy," Barry says. "They still want to touch and feel before they make a decision, whereas the younger generations don't care as much." Van Someren has a slightly different perspective, expanding on the Gen X preference for active engagement. "Generation X definitely has a preference for online interactions, but they do maintain an affinity for certain traditional channels based on individual need. Sometimes people just want to talk to someone on the phone," she says. "The most successful companies connect marketing, sales, and service across all channels" including online, retail shops, and call centers. The Xer consumer is seeking an experience, not merely a product. "Best Buy and the launch of their Geek Squad developed a new and interesting approach to installation and service, Starbucks developed a market for $3 coffee by selling the experience of coffee, Ethel's Chocolate Lounges are sweeping the nation as the place to gossip and nosh on fine chocolates. These demonstrate how companies can be innovative in reaching Generation X in ways that matter to them," Van Someren says. Not every company has a handle on this, and it's costing them. Even popular brands from Gen X's youth are flagging. "Banana Republic and The Gap are losing a little of their shine--Xers used to love them, but now they see them as stereotypical big companies, raking in money," Barry says. Business to Business There's another angle to be addressed. Xers are notoriously entrepreneurial, as any bankrupt Internet millionaire from the 1990s can tell you. Businesses founded or acquired by Xers also have common characteristics that other companies should consider when dealing with them. Xers bring a refreshing intimacy to the way they want to run their own enterprises. "Previous generations were very invested in locations and real estate, stores on every corner," Schaefer says. Instead, the Xer wants the experience to lead the customer's interactions. Bidirectional communication is the rule. If you want to work with a Generation X--run business, you have to work with it. "Xers are more likely to look for alliances, and respond well to them," Barry says. "Gen X--owned businesses say, do what you're good at and make partnerships for the rest. They're best with innovation and R&D." Younger Xers especially aren't as hung up on the details of how to make something work, according to Barry; they want to be creative. Business process outsourcing is a natural means of getting into a partnership with the business of Gen X. A Final Thought In discussing Generation X as consumers and as businesspeople, one topic has been lying just underneath the surface of all the others: loyalty. This is an extremely important factor, especially considering Gen X's reputation of being incredibly disloyal to brands and companies. Baby Boomers and previous generations were loyal because of a variety of reasons--simple habit, product reputation, perceived lack of choices, even the sentimental value of buying the same razor blades your father and grandfather bought. These can sway Generation X as well, but not as far, nor for as long. A growing body of research tells us that Xers are very likely to seek competing options after just one negative experience with a company. Knowing this, the only smart move is to follow the marketing advice presented by experts like those at MIVA, PortiCo, and Wunderman--not just in one instance, but consistently, and across all channels. Failure to execute could leave your business Xed out. Contact Senior Editor Marshall Lager at mlager@destinationCRM.com. TECHSUPPORT {Chrysi Philalithes} Vice President, Global Marketing and Communications, MIVA MIVA is an online marketing agency with a dozen offices worldwide. The company delivers qualified leads to advertisers, helps maximize revenue for partners, facilitates commerce for online merchants, and provides relevant information to customers, with the exclusive goal of helping businesses grow.
  • To reach this audience marketers should use a number of online advertising mediums, in particular, pay-per-click ads and rich media advertising. Pay-per-click ads, also known as search marketing, reach users at a time when they are looking for products and services on search engines and directory sites. Using this medium to capture the Generation X audience is crucial. This generation has been bombarded with adverts all their lives and ad avoidance amongst them can be high. Pay-per-click ads appear when a user actually requests information, as opposed to other ad formats, which try to attract consumers by pushing their information to them. The targeted nature of pay-per-click ads is unique--they are a "pull" rather than a "push" ad format.
  • Generation X is visual. It grew up on MTV and video games. Using rich media advertising that is creative, original, and goes beyond the banner will appeal to this audience. Captivating and imaginative rich media campaigns are a perfect vehicle for marketers to attract this audience.
  • Generation X is used to instant gratification. It wants it now and it gets it now. Once you've developed the creative for your online campaigns, you want to ensure that the click-through from your ad takes the audience directly to the relevant section of your Web site, not to your homepage. This is especially key with pay-per-click ads; make sure you take users directly to a Web-site page related to the keyword they searched for. This approach can help convert clicks to sales. --M.L.
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