Generation Y studied by Economist Business Intelligence Unit
There are many formal research projects on generations, and almost all of them confirm the basic theory and its findings. A recent study now focuses on the younger generation, known as Generation Y. The global survey was conducted by the Economist Business Intelligence Unit and Genesys, an Alcatel-Lucent company. It looked at how consumers born between 1982 and 2001 will impact the customer experience, asking C-level and senior executives from around the world how they are creating a customer experience to attract and retain Millennials. Of the 164 executives who took part in the survey, 29% came from North America, 31% from Europe, 30% from Asia-Pacific and 10% from the rest of the world. Participants represented 19 different industries. One-third of respondents’ organisations had annual revenue greater than US$1 billion and just over one-half (51%) had less than US$500 million in revenue. Board members and CEOs comprised 30% of respondents. CFOs, CTOs and other C-level executives made up an additional 19%. The remainder was split among other senior and middle management functions.
The headline results and executive summary of the findings is very interesting:
The Economist BIU found that Generation Y include approximately 80 million individuals born between 1982 and 2001 in the US alone. The millennial generation outnumbers baby boomers today, and its ranks will continue to grow in influence as the majority of Gen Y reach adulthood in the next decade. Largely as a result of the Baby Boomers, executives overwhelmingly agree (81%) that each generation has specific work and marketplace needs, but they are split on which demographic group should receive the greater share of market investment. A surprising 42% believe that a bigger share of investment in marketing and service should go toward catering to Gen Y, while 39% favor older consumers. As a result of this split, the research found few companies have cemented their approach or yet implemented a strategy.
The survey found that 75% of companies believe that in the next three years they will need to have a Gen Y strategy in place, with 30% expecting a major impact that will lead to change across the organisation, and 45% expecting a more modest impact. Despite this, 54% of respondents say they have yet not set their strategy for targeting, attracting, or retaining Gen Y, while 32% say they have done so. For example, most companies have not kept pace with the Gen Yers’ preference for interacting through newer, community-based technologies, as most firms continue to rely on telephone, email and store/office-front points of contact.
The research found the proliferation of blogs, podcasts, videos, chat rooms, social networking sites and other online interactive communication has changed the corporate-customer relationship. In the past, customers tended to go directly to the company to enquire about a product, make a purchase or raise a complaint; today they increasingly go online. On the web, they learn, shop and share their experiences, both positive and negative. The survey identified key features and motivating factors that companies expect to resonate with Gen Y, which revolve around issues such as convenience, customisation, and community. For example, when it comes to purchasing products and services, corporate reputation and brand are less important with the Gen Y than peer recommendation and viral marketing (such as online promotional communications passed from one customer to another). Moreover, respondents say it is convenience more than price that drives millennial purchasing decisions. Others include “fast, reliable service,” “frictionless interaction,” a “tailored approach,” “honesty and trust” and a “personal touch”.
Three key findings emerged:
- Investment strategies are shifting to favor Gen Y: companies are debating heavily whether to invest more in catering to aging baby boomers versus next-generation consumers, with 42% saying they should tilt toward younger customers, while 39% would shift toward Baby Boomers and Generation X.
- The time to act is now: most companies (54%) have not yet set their strategies or marketing for Gen Y, even though they overwhelmingly agree that such steps are needed, with 75% saying Gen Y will impact their organisation as consumers in the next three years.
- It’s an Enterprise 2.0 world: Most companies have a sophisticated understanding of what it would take to adapt, but are not ready to change their customer engagement model by leveraging social networking, peer marketing, better online support, text messaging, and blogging.
The report highlights the urgent need for businesses to invest in new modes of customer communication and to tailor their approaches to match customer preferences. The research is part of an ongoing set of thought leadership initiatives by Genesys designed to help leading enterprises respond to key challenges they face and enable them to improve the overall customer experience.