Article

Fast casuals market to millennials

Advertising approach, atmosphere need tweaking to reach younger demographic.

November 10, 2008 by Julie Sturgeon — independent journalist, CEOEditor, Inc.

Millennials — consumers ages 16 to 31 — fuel the restaurant industry with their propensity for dining out. Courting them, however, requires tactics that go beyond typical marketing methods, from utilizing social networking sites to creating a trendy atmosphere.

The older half of the demographic is just beginning to see its earning power take off, while teen spending is largely fueled by allowances or minimum wage jobs. Still, their menu choices often tend to focus on lower priced items.

"I've been around long enough to know they get the cheapest thing and fill up a soft drink 12 times," said Chris Dahlander, president and founder of Dallas-based Snappy Salads, of his teen customers. "But if I can get them to understand that salads are not (just) something they eat before the main meal, I'm ensuring my business will be around in the next decade."

Another reason not to discount the younger half of the millenial demo is their spending power.

According to Philip St. Jacques, chief marketing officer and founding partner of St. Jacques Franchise Brand Marketing, one in three high school seniors now carry a credit card. Teens earn 63 percent of their income independently from their parents, and they generally don't pay rent or utilities.

Fast casual chains hold the edge over quick-service restaurants when it comes to snagging these dollars, according to Brady Darvin, senior director of consumer insights at Irvine, Calif.-based marketing consultant firm Strottman.

Millennials' perception of famous QSRs like McDonald's and Burger King are set in stone — and changing their image of plastic chairs and kids meals is difficult, Darvin said. Fast casual brands' reputations are more vague in their minds, and thus they are more open to give fast casual a try.

"There are fewer barriers to snagging brand loyalty in fast casual," he said.

On the other hand, a lot of companies vie for those discretionary dollars. Snappy Salads competes with online music and video games for teen dollars. Darvin suggests fast casual owners include the teen market, but skip making it a primary focus of the business.

The good news is, the younger crowd doesn't respond as well to traditional, costly print and broadcasting messages, so the road to reach them is less expensive too.

Here are the experts' suggestions on how to get this audience's attention:

Advertising

Teens breathe social media channels, making MySpace and YouTube blatant marketing tools. The problem is, to effectively leverage them, restaurants must let the teen market — not company executives — control the conversation, St. Jacques warns.

That doesn't mean a nudge is out of the question. For instance, Darvin suggests seeding — and changing often — a secret discount code at the brand's MySpace page. If the viewer comes in on the right day with the correct code, he or she wins free fries or a half-price meal.

"It creates buzz, and this is exactly what you're supposed to do with social media," Darvin says.

Mobile couponing and text messaging are givens to reaching millennials. Cell phone users read 94 percent of their text messages, according to YourAreaCode.com, a new advertising company that pushes messages to these devices.

Restaurants can send instant offers to those cell phones, post messages on social networking pages, or both. Similar companies offer text messages for as little as 10 cents per phone.

Second, let them own the brand in real life. St. Jacques's research for Wing Zone revealed that the college crowd wants that concept to say something about who they are — and after they clicked with its irreverent, fun image, it's natural to declare that bond to the world.

Hats and t-shirts aren't enough, though. St. Jacques is urging the franchise to consider an entire line of apparel to meet the connection demand.

Operators also need to look to the message their employees add. According to Myfirstpaycheck.com CEO Austin Lavin, roughly 75 percent of teenagers are more likely to spend money at a restaurant that hires their peers, which makes your employees excellent brand ambassadors.

Atmosphere

In Darvin's market research findings, the level of sophistication from today's teens exceeds their age more than it did with the previous generation. That accounts for the teens he watched run their fingers along the window sill and express disgust at the dirt they found.

"Their rooms tend to be a mess, but they do not expect their restaurants to be the same way," he said. "They will not come back if the bathrooms are gross."

Dahlander contends teens don't need flat-screened televisions and Wi-Fi to be content, but the atmosphere needs to be hip. For Snappy Salads, that means playing the new groups on the PA system.

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No, it doesn't drive away his older crowd.

Food facts

Nearly half of all millennials eat more meals away from home than at home
Millennials are most open to ordering foodservice via the Internet, with 36 percent of women and 21 percent of men likely to place online orders for takeout

Technomic Information Services

Generational Consumer Trend Report

"The older I get, the more I want to be younger," he said.

But if that segment does lose interest in an environment catering to the younger generation, Dahlander prefers to win over the younger crowd.

"Certainly, there is a point where you are no longer conducive to the retired generation, but they aren't the future of my concept," he said.

At the same time, teens are the most sensitive demographic when it comes to perceiving whether they are welcome, and researchers see no softening of that attitude in the millennial demographics.

So no matter who stands behind the counter, "you need to respond to teens with the same attitude as older customers," Dahlander said. "If you treat both segments the same, you have a successful restaurant."