Millennials are a hot topic for Marketers in all verticals, which means that they are a key audience of interest to Research and Insights teams – with new reports on their purchasing habits emerging every week.
A quick search for “millennial purchasing” over the past few weeks unearths research into millennials impact on B2B buying decisions, information about how millennials made up 32% of all home purchases in 2014, and how they are driven by technology and altruism not advertisements.
While these three studies all had different aims and produced unique findings they all have something in common – their category of methodology. They all used an inquisitorial approach, meaning the methodology was based on asking questions and receiving responses (even the home purchase study relied on survey responses).
Inquisitorial approaches, which can produce both quantitative and qualitative data, are the most well-known forms of marketing research (surveys, focus groups etc.) and often enable the development of actionable insights.
However, they should not be the only elements of a marketing researcher’s toolkit – because not all research questions are best answered with an inquisitorial approach. In those cases, the other methodological category of observational methods should be used.
This is particularly true when the subjects being studied may not be able to accurately self-report or when the researchers have significant cultural differences from those they are studying – because they may not be able to adequately frame inquisitorial questions.
For the financial services vertical, millennials pose both of these challenges.
In terms of accurately self-reporting, they have the problem that they “don’t know what they don’t know”. As this infographic from Goldman Sachs shows, what defines millennials in terms of financial services are the things that they have not done or are putting off – like buying a house or a car, and therefore (more often than not) requiring a mortgage or a car loan.
And then there is the cultural difference. Reports about millennials often reference them as a mysterious other about which some new insight has been gleaned. Millennials are also often treated as a monolithic entity – i.e. “millennials do this, millennials feel that” – rather than as a generation full of different segments with differing motivations and behaviors (let’s not forgot that they currently range from 18 – 34 years old). That form of description is indicative of a cultural gap between the researcher and the group being studied.
Therefore, for financial services professionals to gain the insights they need into millennials, they need to consider different approaches – observational approaches.
Ethnographic studies are a method of observational approach – studies of peoples and cultures within their own space. New toolsets for social and digital monitoring have enabled this type of approach to be applied to the online ecosystem, in a methodology known as Virtual Ethnography. John Kottcamp previously blogged about Virtual Ethnography on this blog – it is an immersive and observational practice, in which a trained ethnographer reads through hundreds of online artifacts to develop a full understanding of the online beliefs and behaviors surrounding a topic.
And that is what our research team is doing right now for the Financial Services space – supported by meta-data identifying millennials and the turbo-charged addition of the natural language processing technique known as topic modelling.
Topic Models return probable topics in a dataset from statistical analysis of the words in a corpus of documents (or in this case, millions of digital and social mentions). For example, below are the top 15 words from two of the topics uncovered by modeling the digital and social mentions.
And different attitudes to finance are identifiable in the verbatim linked to these topics, for example:
Topic 5: “I know a few people who went into Music Ed. The pay isn’t great, but it’s livable in lower-mid to middle class. It really depends on what you want out of your career.”
Topic 20: “My base salary is relatively low, compared to my commission/bonus. What’s a reasonable amount per pay period for a 35k base?”
By combining deep qualitative immersion with these sophisticated statistical modelling techniques we are able to observe the attitudes and behaviors of a generation toward finance and financial products.
But how do we solve the problem of millennials not having engaged in certain activities related to financial services products? The answer to that lies in the observation of what we call “Money Mindstates” – which will be the subject of our blog next week.
Join Tom Smith, SVP of Industry Solutions for a webinar where he will explore customer centricity in millennials amongst other consumer groups. Register today.