Meet the Customer of the Future
The ‘Millennial Generation’, also known as ‘Generation Y’ is broadly defined as people born between 1980 and 2000.
There are approximately 2 billion millennials globally, 87% of whom live in emerging markets 1. As they enter the workforce and build their careers, millennials are fast becoming the number one source of global income, wealth and spending, positioning them at the heart of the economically active population.
This is a new generation that has different characteristics, different needs and a different set of values to those who came before it. Millennials interact with the world in a completely different way to their parents or grandparents.
They are the ‘digital first’ generation and have grown up with computers, email, mobile phones, and the Internet, as an integral and accepted part of their everyday life.
This has made them digitally savvy consumers, who want to do business the same way they live, surrounded by easy and efficient solutions. The rise of the millennial generation has caused major disruption in a number of industries as the millennial consumer redefines the way we live, work, play and consume.
It should be noted that arriving on the heels of millennials is the more recent ‘Generation Z’. These are individuals who were born post 2000 and are still somewhere between their infant and teenage years.
While this new generation shares many of the tech-focused characteristics of millennials, they are much more pronounced, as Gen Z is a digital native generation. While millennials may still remember the early stages of the Internet and cellphones, Gen Z will not remember a time before the iPhone or Facebook.
Who are the millennials and what do they want?
As with any generation, there are a number of generalized characteristics that have been attributed to millennials.
While much of the talk about millennials is anecdotal and subject to clichés, contradictions and criticisms, some of the most widely agreed-upon characteristics that are shaping the millennial generation include:
They are always-on
Growing up with the Internet, computers, email and mobile phones has made millennials extremely competent when it comes to utilising technology to address their needs. They spend a lot of time online and on their phones and are always-on and always available. They live a fast-paced technology-enabled lifestyle, where every piece of information they need is at their fingertips.
They are multi-channel
Millennials demand a high level of stimulus in order to capture and retain their attention. They are comfortable multi-tasking and will often interact with multiple screens at once, for example watching TV and browsing on a smartphone at the same time. They have no problem being on more than one channel and can divide their attention between different screens concurrently.
They are knowledge driven
Millennials are often seen as more skeptical compared to other generations. According to research only 19% of millennials believe that, generally speaking, people can be trusted 2. Because of this millennials are more likely to engage in ‘self-education’, using online tools to do thorough research into subjects of their choice.
They are socially and environmentally conscious
Millennials are more racially diverse and more inclusive than the generations that came before them. They are likely to support and spread the word about causes they care about and rally behind social issues3.
Millennials also consider the environment a major and pressing issue in today’s society and are more likely to be pro-renewable energy and sustainable development.
They are social
Millennials were the first generation to utilize and grow up with social media and are three times more likely to have their own blog or personal website than non-millennials4. They have few qualms about sharing the intimate details of their life online and are adept at building online networks and communities around themselves and their interests.
They are self-centric
Millennials are often seen as a more selfish generation and have been dubbed the ‘me generation’ and the ‘selfie generation’. This perception is partly driven by their tendency to share and curate every aspect of their lives on social media. It is also seen in their heightened ambition and focus on personal success. Many millennials are actively pursuing careers while at the same time staying single for longer, delaying marriage and choosing to have children later than any previous generation.
Millennials in Africa
While millennials are generally thought of as a global phenomenon, it is important to consider the unique aspects of African millennials that may differentiate them from their international counterparts.
Increased access to global media has contributed towards a trend of more culturally integrated values and viewpoints, creating a ‘one world culture’ that is shared by all millennials globally. This results in many African millennials having more in common with their international counterparts than with their parents and grandparents.
Serving the Customer of the Future: is your Business Ready?
While one cannot predict the future, it is possible to prepare for it. With the pace of technological innovation only set to increase, companies need to be ready to serve a new digital-savvy consumer.
In the past, consumer engagement followed a linear framework that was pushed from the company to the customer. The millennial consumer, however, exists in an ecosystem of multidirectional engagement.
In the new digital reality, interactions with customers are no longer driven by the business. The interaction now occurs on the customer’s terms, through the customer’s channel of choice, at any time the customer wants.
Millennial customers are always-on and expect their product and service providers to be the same. In short, it is a customer-led engagement not a business-led engagement.
The interaction between a business and its customers can no longer just be corporately defined. In order to serve the new generation of customers, businesses must develop a deeper understanding of what customers want. Millennials like to feel heard by the businesses they engage with and are quick to give feedback and offer product and service suggestions. They also want to know that their feedback has been seen, acknowledged and actioned in some way.
Millennials live in a world of constant and instant communication. If they send an email or social media message, they expect a near real-time response, and if they do not receive one, they will assume something is wrong.
This immediacy can make them less patient when interacting with a business and makes them less likely to choose traditional channels of contact such as a call centre, or going in to a branch, where there may be queues or long wait times.
Instead, millennials are more likely to choose digital forms of communication such as email, live chats, instant messaging, or social media platforms. This allows them to get an immediate response with the least amount of disruption.
Companies must therefore be willing and able to speak to the millennial customer at any time and any place. The business must be as ‘always-on’ as the consumer is and show its capability to field input and enquires across a range of channels and provide feedback and assistance in real time.
From Mobile-first to Mobile-only
Another important aspect of serving customers of the future, is being able to talk to them through their channel of choice. Millennials are known to be a mobile-first generation, reaching for their smartphones as a primary contact point for their communication, research and transaction needs, and switching to another channel as the need arises (such as completing an online purchase through a desktop computer, or going into a store).
Within the millennial generation and with the Gen Z consumers who will follow them, there is a shift happening from mobile-first to mobile-only. As smartphones become more powerful and more ubiquitous, millennial consumers are expecting increasing functionality out of them.
The idea that a customer’s first and only contact with a company could be happening entirely through the smartphone interface is one that has emerged in recent years with the success of new, digital, app-driven businesses (for example Uber).
This trend is particularly important in Africa, where traditional broadband connectivity does not have the same penetration as in the US or Europe, which means that mobile is often not just the default, but the only online channel available to many millennial consumers. Many companies, however, still consider ‘mobility’ a siloed task for the IT or marketing department and are not looking at how to develop it as a complete customer channel for the business. Companies need to be asking themselves whether they can provide a fully end-to-end, mobile-only customer journey.
1Generation Next: Millennial Primer – Bank of America – 2015
2Generation Next: Millennial Primer – Bank of America – 2015
3Curalate – Marketing to Millennials – 2015
4Generation Next: Millennial Primer – Bank of America – 2015
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GLOBAL CUSTOMER EXPERIENCE MANAGEMENT MARKET TRENDS IN A SNAPSHOT
The global customer experience management market is expected to grow from USD 5.06 Billion in 2016 to USD 13.18 Billion by 2021, at a CAGR of 21.1% during the forecast period. The primary drivers for the CEM market include increasing need to manage customer experience throughout the customer journey, need of retaining customers, providing competitive differentiation, and increasing e-commerce and m-commerce.
Among all touchpoints, the mobile segment is expected to grow at the highest rate during the forecast period. Mobile phones are used to access personal account information, conduct purchase transactions, receive service alerts, and request calls. In CEM, mobile phones play an important role in collecting customer feedback.
Among verticals, the manufacturing sector is expected witness the highest growth during the forecast period. This growth is primarily attributed to the focus of manufacturing companies on retaining existing and acquiring new customers. This sector also faces the challenge of increasing operational costs, economic fluctuations, and price wars. To tackle these issues, the manufacturing sector has adopted CEM solutions, which enable companies to optimize their workforce and decrease operational costs, thereby enriching customer experience across varied locations and touchpoints.
Among regions, Asia-Pacific is expected to grow at the highest rate during the forecast period. This growth is mainly attributed to the rapid growth in smartphone adoption and increasing e-commerce and m-commerce. Branch/store, mobile, and social media are the top three touchpoints in the Asia-Pacific region. This region has experienced a huge increase in smartphone users and this adoption rate is expected to grow during the forecast period. It has also fueled online mobile shopping and social media usage. Hence, organizations in this region are primarily focusing on increasing customer experience for mobile and social media touchpoints.
Some of the factors restraining the customer experience management market growth are complexity in data synchronization and subjective expectations of customers. Most of the vendors have adopted agreements, collaborations, and partnerships as key strategies to enhance their client base and customer experience management offerings. Adobe Systems Incorporated (U.S.), Oracle Corporation (U.S.), IBM Corporation (U.S.), Nokia Networks (Finland), Tech Mahindra Limited (India), Avaya Inc. (U.S.), SDL (U.K.), SAS Institute Inc. (U.S.), and OpenText Corporation (Canada) are some of the major players operating in this market. These companies have followed both organic and inorganic growth strategies. For example, Adobe has focused on developing strategic partnerships in order to strengthen its position in customer experience management market while Oracle has adopted acquisitions as its primary growth strategy to enhance its products and services and expand its customer base.