Opinion

FOMO: Millennials may not be the only ones missing out

If businesses don't attempt to understand the complex physiological processes behind FOMO, they could be the ones who actually miss out, writes Dr Chris Hodkinson.

FOMO, or the ‘Fear of Missing Out’, is probably the single most important driver of millennials’ consumption decisions. Few businesses have gone further than using it as a call to action, but its potential is much greater than that.

‘The Fear’ can be harnessed in pre-purchase, consumption, and post-purchase phases, and yet few companies go beyond its superficial use.

This may be because effective use requires a deeper understanding of the millennials’ underlying mind-set and the specific customer behaviour associated with a product category or a particular product.

FOMO is an element of the human psyche that is as old as the ages, however, it has never been a more important driver of human behaviour and it will continue to be as millennials age.

Even in the days of hunter-gatherers, hunters would have worried whether they had missed out on a bigger woolly mammoth or gatherers might have fretted over whether they might have found a tree with more fruit.

FOMO is a cultural meme saturating a generation that embraces the huge range of choices available to them. There are more parties, more products, and more experiences to choose from than ever before.

Because of this, many millennials experience discomfort with their specific choices as they have that sneaking suspicion the other options may have been better. While research shows that social events predominate in relation to FOMO, even missing out on mere information causes discomfort.

Research has shown links between their feelings of FOMO and behaviours including: the compulsive checking of social media, the need for ‘likes’ and other behaviours, and most significantly their need for social inclusion.

Most importantly FOMO is a mind-set that millennials have grown up with, and it will be with them for the rest of their lives. An understanding of FOMO appeal responses is essential if companies are to realise its full potential and incorporate them into sales and follow-up processes.

From Kotex’s personal hygiene products to Ray White selling million-dollar homes, Australian businesses have well and truly adopted FOMO into their marketing toolkits, but some do it better than others. In our fast-paced digital world, it’s more important than ever for brands to stay relevant and effectively influence their audience.

Taking a closer look at both examples, Kotex products are positioned as providing a solution, ensuring its users never miss out, while Ray White’s article on realestate.com.au succeeded in driving buyer’s angst. It may be appealing for businesses to jump on the bandwagon, but FOMO marketing is complex and businesses put themselves at risk if they misinterpret the sentiment and their audience.

The key to the effective adoption of FOMO as an appeal lies in conducting insightful research, which uncovers the psychological and the social implications of the considered action or purchase. Once these insights are gained, especially in the case of services, supportive elements can be designed into sales and service processes that capture more customers, enhance the customer experience, promote repurchase and even create product advocates.

Properly implemented, even non-purchasers can be influenced to positively consider subsequent offers. The tools by which marketers can address the fear of missing out are readily available. FOMO is a significant driver of many aspects of millennials’ lives including their over-use of social media, and in particular, purchases of goods and experiential services.

FOMO is here to stay and it offers long standing rewards to those who break down the barriers to understanding and embrace it.

Dr Chris Hodkinson is a senior lecturer at UQ Business School.

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