Millennial Market Insight: We Desire Experiences More than Things

How many of your prospective customers are millennials? And how should the number of millennials in your target market affect how you interact with them and define the...

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How many of your prospective customers are millennials? And how should the number of millennials in your target market affect how you interact with them and define the kind of products you offer? As millennials continue to come of age and enter the workplace, they are unsurprisingly becoming the early adopters of SaaS. The consumerization of enterprise software continues apace, driven by the generation of digital natives that expect there to be an app for everything and demand great design, and a slick user experience across multiple devices. In short, millennials are and will increasingly be the big buyers of SaaS, and you need to know what they’re looking for. A recent list published on Inc.com entitled “7 Millennial Traits That Baby Boomers Need to Learn” included the following (paraphrased) key characteristics of generation Y:

Passion matters: Millennials are continuously searching for or working on their passion.

Risk-taking: They are not chasing stability in the way previous generations did.

Work-life alignment: Millennials want to make their passion their work.

Think in terms of missions: This is not a generation of “lifers”. They achieve and move on.

Allow a new perspective to change your focus on a dime: If something interests you, chase it.

Spontaneity: FOMO (Fear of Missing Out) is strong – only regret what you haven’t done.

Millennials are world travellers: Travel broadens the mind of the millennial.

Is it really a good idea to segment the market in this way?

110520-N-GS507-791 PENSACOLA, Fla. (May 20, 2011) Staff and students at the Center for Information Dominance (CID) Corry Station participate in morning colors during the command's sixth annual Cultural Diversity Day. CID Corry Station oversees career management and training for officer and enlisted students of the U.S. military and allied forces in the fields of information warfare, information professional, cryptologic and information technology. (U.S. Navy photo by Gary Nichols/Released)

All of these traits combine to form a most intriguing group of individuals of which, if my ill-conceived (seemed like a good idea at the time) Twitter handle at the bottom of this article is anything to go by, I am one. Do I recognise these traits in myself? To a large extent, yes. I nodded in agreement as I read through the list and instantly brought to mind examples from my own life that illustrated why the millennial cap fits – in the same way we tend to do when reading a list on Facebook entitled “10 Things Only A [insert University name here] Graduate Will Understand”. It’s easy to think of reasons to be part of the club, but would I have written the same list if asked to describe my own personality traits? Probably not. The idea that millions of people who share nothing more than being born within a certain period of time somehow share a number fundamental character traits is similar to stereotyping based on nationality, race, gender, or any other somewhat random variable. It’s not an exact science, but it is useful nonetheless. Millennials have been socialized in a particular environment and that has shaped them (us?!) in a particular way.

So, assuming that the above list does hold some water, it might just be possible to boil it down even further to a single, killer insight. Take the passion, the spontaneity, the work-life alignment, the mission mind-set, the openness to new perspectives, the spontaneity, and the desire to travel the world, mix them all together and you get a generation that values experiences above all else. Millennials, like all previous generations, are in the pursuit of happiness. The idea that great experiences contribute more to happiness than material possessions has been gathering pace and, importantly for those of you readers of SaaScribe developing products that you would ideally like to sell for a fee, has led to a shift in how discretionary income is spent. The entrepreneurial amongst you will have read this far and already started thinking about the product you could build to capitalise on this customer insight and make it wildly successful. If what I’ve seen lately is anything to go by, SaaS entrepreneurs have indeed been quick to pick up on this trend and to build products that help millennials find their next experience and put the seller of the experience in touch with their base of millennial experience-seekers.

What has Richard Branson got to do with it?

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Ironically, the millennial spirit of passion, risk-taking, spontaneity, etc. is personified in the 64-year-old (just missed out on the age bracket) founder of Virgin Group, Sir Richard Branson. Branson is a hero to many millennials and someone who’s achievements, lifestyle, and general attitude towards life we often strive to emulate. It probably comes as no surprise then that Branson was one of the main investors in travel experience booking SaaS start-up, Zozi’s, Series C round that saw it raise $30 million to expand its platform. Zozi is essentially a marketplace that acts as a go-to for those interested in (predominantly outdoor) activities and adventures. Tellingly, many of the offerings on the site include GoPro rental along with your surf, dive, jump, hike, or whatever it may be – which leads us to another millennial insight: post the pictures/video or it didn’t happen. Zozi offers value to the vendor in that it provides them with the software many of these kind of SMEs lack for managing reservations while also getting the vendor’s name out there to its potential audience. To the millennial, it offers a single, easy-to-use source to browse and buy (spontaneously, of course) their next experience.

The Business Model

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Zozi charges the vendor a monthly subscription fee and then applies a small transaction fee to customers as part of the online booking process. If this sounds familiar, that’s because it is. The aforementioned business model has become the de facto for B2B2C applications defined by Techopedia as “a business model where online, or e-commerce, businesses and portals reach new markets and customers by partnering with consumer-oriented product and service businesses.” While attending a recent (really great, I might add) event for tech start-ups in Dublin called Dublin Beta, I was struck by the number of start-ups that had adopted this model and referred to themselves as the Hailo/Uber of the particular market they were targeting. Beutifi helps you find a salon and book an appointment, FlipDish helps you figure out what food you’re in the mood for in a clever, Tinder-esque kind of way and order for delivery, Appointz allows you to book an appointment for almost anything and integrates nicely with your Google calendar, and the eventual winner of the event, Gymr, lets you find a sport or fitness class nearby and book a slot.

Each start-up I spoke to offered their software to the business for a small, monthly fee and charged a transaction fee or took a revenue share of each end user purchase – a volume game if ever there were one. Also evident was that each of these SaaS applications was targeted predominantly at millennials and aimed to provide them with a simple way of finding and purchasing their next experience. More notable still was the fact that none of them were aiming to sell any kind of durable product via their application – they don’t need me to tell them. Another start-up in attendance, coming at the millennial experience market from a slightly different angle, was Let’s Get Checked. The company which provides sexual health testing “from the comfort of your own home” is presumably aimed at helping millennials deal with the potential fallout from their latest experience. As evidenced by this one, small start-up showcase in Dublin, the angles to approach this market are many and varied, but the customer insight remains sound and will undoubtedly inspire many more SaaS products in the near future.

By Michael Cullen @michaelcullen87

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