Millennials — generally defined as those born between 1980 and 2000 — are an important and large potential consumer base for new business owners. Unfortunately for some, research suggests they tend to be reluctant to purchase big-ticket products that require financing, such as cars, luxury goods, and homes.
If you want to cultivate a millennial consumer base and introduce financing options, here are some concepts and tactics that might help you along the way:
Equity Education and Solicitation
Not every consumer understands the concept of seller financing, which is why part of your job as a seller is to present the option in clear, simple terms.
One of the high selling points of seller financing options is that the right credit accounts fit neatly into a budget. This means the buyer doesn’t need to purge months or years of savings to enjoy a product or service in the near term.
The data suggests that millennials fear credit cards but are enthusiastic about being on a responsible budget, which can be an ideal starting point for building responsible credit within a budgetary framework.
How Millennials Make Purchases Today
It is tricky to generalize and stereotype an entire generation, but data shows that millennial consumers tend to interact with money and purchases differently than other age demographics. The process through which millennials make economic decisions is formed by their unique values and the technology with which they grew up. Millennials also tend to be drawn to specific characteristics in a product or service.
Millennials Track Reviews CarefullyMillennials enjoy being connected to the internet and using it to search for information on the fly. Review sites, such as Yelp!, are staples of millennial purchase patterns.
Proactive businesses make it easy for customers to share their experiences online and with friends. Ask for external reviews on sites with great reputations and, if possible, make it functionally easy for users to provide them.
Millennials Care More About Savings, Less About Building CreditA comprehensive study conducted by BMO Wealth Management indicated that millennials consider “saving more” as their most valued financial goal. Other pertinent findings include that millennials:
- Are more concerned about not having enough money than any other age group
- Consider potential “negative impacts of global economic events” as a serious threat
- Sometimes fear credit because of mistakes made by their parents
These are hurdles for businesses that either rely on or encourage financing options. Take care to be sensitive to their unique generational perspectives about money.
Millennials Care About Business Values and EthicsIn a social media-heavy world, many millennials begin to view every social and economic action as an expression of their own values. This is one of the reasons that more companies project socially and environmentally conscious images than ever before.
Before you can convince millennials to buy from your company or take on credit to make finance their purchases, it makes sense to engage them by expressing a shared value.