How Millennials Are Reshaping Small Businesses

Millennials are now the majority. Discover how this demographic shift is affecting the marketplace, and how small businesses can benefit from it.
April 28, 2016

A generation ago, there was one main benchmark when it came to measuring a company’s success—the health of its balance sheet. If a business was making a profit, then all was well. Fast forward to today’s business climate and the balance sheet is only part of it. In a small-business climate increasingly inhabited by millennial customers, employees and business owners, a key barometer of how well a company is doing is whether the business successfully strives to affect social change.

“For the first time, businesses in America are being defined not by what revenue their products bring in, but by what their brand stands for, and leading this change is the millennial generation, whose values are drastically different than their parents' generation,” says Joseph Anthony, CEO of millennial marketing agency HERO Group.

Millennials Are Redefining Business Success

“In a post Great Recession economy, young Americans freshly out of college and riddled with student debt are entering the workforce facing unprecedented challenges. As a result of this reality, millennials have redefined success from a strictly monetary sense to being something that adds value,” says Anthony. “This shift in thinking about measuring success has turned the millennial generation into the generation of social change for a better world.”

Small businesses are now finding themselves needing to adapt to the demands of millennial customers and employees seeking to improve society.

Today’s young people make no distinction between business change and social change, agree Glenda Eoyang and Royce Holladay, co-authors of Adaptive Action: Leveraging Uncertainty in Your Organization. “At Human Systems Dynamics (HSD) Institute, we engage with numerous millennials in the context of helping them learn models for getting unstuck and achieving results in today’s workplace,” say Eoyang, who is founding executive director of HSD, and Holladay, who is director of services. “Working with these young people, we find that the ‘results’ they want have less to do with making money and more with making a difference in people’s lives. It’s just the way they naturally orient.”

There are positives to this outlook, say Eoyang and Holladay. “There is tremendous power in the compassion, hope and incredible optimism it takes to believe you can truly change the world for the better. While a disillusioned baby boomer might think, 'These kids have these pie-in-the-sky ideas that just don’t work in the real world,' the fact is that these social enterprises exist and are thriving.”

As buzz terms stemming from the millennial generation like ‘shop local’ continue to catch fire, small businesses remain at a tremendous advantage for wooing millennial consumers.

—Joseph Anthony, CEO, HERO Group

Unique Millennial Worldview

Millennials have gotten their one-of-a-kind perspective from their experiences, which have been decidedly different from those of prior generations. “Millennials are the first generation of Americans who will be less financially secure than their parents,” says Anthony. “Their world view, shaped by the tragic events of September 11 and the global financial crisis, have led them to have less faith in the American Dream. The stereotype that millennials are lazy and materialistic does not hold water when you consider their values. This is the generation of Occupy Wall Street and Black Lives Matter. They are the antithesis of Gordon Gecko’s 'greed is good' mantra. For millennials, what your brand stands for means more than its bottom line.”

This unique world view has also made millennials more adaptable to change than prior generations. “What we see as a big differentiator is how the different generations respond to the new state of the workplace. That state is pure chaos, unpredictability and constant, relentless change,” note Eoyang and Holladay. “It may be somewhat of an oversimplification, but from what we’ve observed, baby boomers are fearful of this reality, while millennials are comfortable with it and even excited and optimistic.”

Millennial employees and business owners view the world through a unique lens that is quite different than baby boomers, say Eoyang and Holladay. “This generation is forging ahead with social entrepreneurship. It’s a natural manifestation of how they experience the world—whereas boomers tend to see work and society as separate boxes.”

Boomer small-business owners and consumers also approach marketing differently, adds William`Chase, owner of Webtacular, which creates business websites. “One thing that millennial entrepreneurs do right is use social media to create authentic connections with their clients,” he says. “Instead of bombarding them with advertising, they instead connect with them to build real relationships that then turn into lucrative sales. The older generations tend to focus on slick ads that many customers are desensitized to. One thing you can never grow desensitized to is genuine connections with people. Millennials are willing to take the extra step to find out what customers want and how they can help.”

Marketing to prior generations mostly relied on creating a level of awareness of your brand or product, agrees Anthony. “For millennials, who are bombarded with display advertising non-stop, brands need to create affinity by fostering a deeper level of engagement between the brand and the target audience.”

Embracing the Millennial Outlook in Small Businesses

According to the U.S. Census Bureau, millennials now outnumber baby boomers as the nation’s largest generation, which means that “there is simply no other approach to business than the millennial approach,” says Anthony. “Yes, it’s more challenging to develop a communication strategy that feels innate and genuine, but many Americans now expect this level of authenticity.”

In order to keep millennial employees satisfied and committed to working for your company, it’s vital that small-business owners “infuse meaningful, socially conscious action into their jobs and workdays,” say Eoyang and Holladay.

“Millennials often start up their own ventures, because they’re unhappy with the way existing companies are run. If they can’t find an outlet for their passion for making a difference at your company, they’ll leave and take that incredibly valuable capital somewhere else. In order to prevent this, small-business owners can let millennial employees take ideas that drive social change and run with them—perhaps as independent projects or even as spin-off ventures,” they advise.

When it comes to attracting the millennial consumer, small-business owners should first ask themselves why their company exists, Anthony adds. “If you’re of the opinion that one great idea can change the world, determine what your brand’s inherent value is. When your small business delivers a product, package it with a purpose. As buzz terms stemming from the millennial generation like ‘shop local’ continue to catch fire, small businesses remain at a tremendous advantage for wooing millennial consumers.”

Read more articles on company culture.

Photo: iStock