Who better to discuss Generation Y’s role in franchising than two millennials immersed in the industry? From a distrust of advertising to the ease of entrepreneurship, the experts unpack what makes this generation tick.
Interview by Kieran McLoone, deputy editor for Global Franchise
IN CONVERSATION:
Zack Fishman is the director of innovation at FishmanPR, and specializes in the ways that brands can reach untapped markets and harness the skillset associated with the millennial generation.
Ryan Hicks is the vice president for business development at Rallio, a social media marketing tool to help franchise brands build awareness.
How would you categorize the millennial generation?
RH: The first thing that comes to mind is that millennials are the largest generation since the Baby Boomers – there are around 70 to 90 million of us, which is a lot of people driving social and cultural change. From an economic standpoint, it’s a significant segment you must target; millennials absolutely can not be ignored; neither in the workplace nor from the consumer side.
ZF: I’d say that millennials are inherently untrustworthy of advertising. They require a lot of research before they actually engage with something. Normally that research isn’t done in the traditional ways that we may think of; especially a business purchase.
When millennials go to research a product, they’re often looking at what their peers are doing. We’re very much the ‘I’m doing that, too’ generation, purely because we see trends and lifestyles on social media. We engage more heavily in organic reach than paid reach, just because of how untrustworthy we are with advertising.
“If franchising were dating, then millennials have some trust issues”
RH: Just to piggy-back on the point about advertising, there’s a perception that millennials aren’t brand loyal, which I think is misconstrued. Millennials can be just as loyal as previous generations, if not more so; they’re just looking to what their peers are doing.
ZF: That’s right: when a millennial does like something and engages with a brand often, there’s a much deeper loyalty because of the emotional connection that’s then made.
RH: I’d classify it less as blind loyalty and more that when that loyalty does eventually come, it can be incredibly intense. Millennials are also much more vocal than previous generations when it comes to social issues, and at the core of it, we want something bigger to believe in.
The other thing is that even though millennials aren’t making all of the purchase decisions, they influence a huge amount of decisions that their parents or grandparents make. Millennials are very sought after because of not only the purchase power that they have but also the purchase influence.
From a consumer perspective, how can brands overcome the inherent mistrust millennials have in advertising?
ZF: It’s all about building an emotional connection with the company by convincing somebody else to write something awesome about that company. You’re really trying to convey emotional attachment. Testimonials are very important for brands to bring millennials round to the idea of their offering.
RH: I always say that marketing, historically, had this capability to put a message in front of a huge audience. It was what you put out and how you told the world ‘this is who we are and this is what we do’. Now it’s two-way, and it’s no longer what brands tell the world; it’s what people tell each other and it’s more of a conversation, which you’re seeing on social media.
We call it employee and customer advocacy. It’s not really about Net Promoter Scores anymore; if I ask Zack if he’d refer a brand to a friend, how do we then get him to share that positive impression? Brands like gyms, for example, design their premises with a nice backdrop because then after you go to a class you’ll take a photo promoting their business and tag them in it.
Millennials are starting businesses earlier than boomers did, which shows a new level of entrepreneurialism. Do you think that’s the case?
RH: I think that we have more access and capability than ever before to be an entrepreneur.
Anybody with an internet connection and an interest can be one. It’s a lot harder to break through to be an entrepreneurial success if you don’t have a playbook, though, and that’s what attracted me so much to the franchise world: you have that playbook to be successful.
15 years ago, it wasn’t cool to be an entrepreneur, and now it is. We have Steve Jobs, Elon Musk, and Richard Branson. We have shows like Silicon Valley and influencers glorifying the lifestyle.
Years ago, the word entrepreneur meant living on your mom’s couch and starting a business out of your basement, which isn’t the case now. What I get excited about and the reason Zack and I host a podcast is that we’re evangelists of the franchise business model. I can’t wait to see more millennials and even younger folks realizing that they can get into business by themselves by buying into a business that works. We’re going to have a boom of millennial franchise ownership.
There’s the perception that millennials are serial job hoppers, with 15-20 roles in their lifetimes. Is that cause for concern for franchise recruiters?
ZF: Millennials are always searching for something where they feel like they can belong and trust. If franchising were dating, then millennials have some trust issues. That’s why social media and PR are so important; not doing the fluff pieces, but showcasing ways in which people feel like they’re genuinely engaging with a brand.
“I would recommend that brands use tools that assess personalities; I wouldn’t even make a hire without exploring that”
At FishmanPR, we want to try and harness that drive. We’re always recommending that brands spotlight amazing franchisees in their network, because that’s what people want to see. They want to see what it’s like to walk in somebody else’s shoes for a little bit.
RH: Job-hopping is also no longer frowned upon. If we’re hiring at Rallio and somebody says they were at their previous company for three or four months and they didn’t vibe with the company culture – that’s acceptable now!
On the flipside, it’s very expensive to hire but then not retain. I would recommend that brands use tools that assess personalities; I wouldn’t even make a hire without exploring that. Beyond the one-on-one values that a person has, you need to make sure that their traits mean they’ll be successful at their job.
Assessing people is a necessity because it’s expensive to hire, especially at VP and C-suite levels. You need to look at all aspects of a person to make sure they’re in the right seat of your company. Once that’s done, build a culture that inspires folks.
Is Generation Z something brands should be focusing on, if not for franchise recruitment right now, then down the line?
RH: I think that Generation Z is going to be like millennials on steroids.
ZF: Definitely. If boomers can’t deal with millennials then they’re definitely in for something big. When it comes to me and my little brother, I’m the youngest of the millennials and he’s the oldest of Gen Z – there are only a couple of years between us – and the ways that we interact with each other are completely different. He engages with things very differently to me despite the fact I’m only two years older. It’ll be at least five years before the franchise world catches up with Gen Z.
THE FRANCHISES DRIVEN BY GENERATION Y
Ryan Hicks
Health-focused fast casual: Millennials have introduced a healthier way of eating into the global food palette, forcing established franchisors to add healthier options to their menu. In our view, millennials are going to continue to flesh this out as America continues to change its diet towards more nutritious food.
Mobile pet services: Due to its relatively cheap initial investment and the millennial obsession with pets (more are being adopted at a lower average age than Gen X or Baby Boomers), this industry is poised for tremendous growth, with millennials coming into focus as the primary franchisee candidate being marketed to.
Zack Fishman
Home-based children’s services: A recurring trend here, millennials are constantly looking for the cheaper initial investment due to the massive amount of debt we’re in. With a children’s services franchise that requires no brick and mortar, millennials have the ability to give back to Generation Z while also running a business with little overhead.
Home services: Despite the fact that more millennials rent than any other generation before them, real estate experts believe many will begin to buy homes as the bottom half of generation gets into their 30s. Home services concepts like house painting, carpet cleaning, and window washing will be the franchise du jour for those who seek low overhead-high margin business with a good opportunity to expand quickly.
