8 October 2008
Communication must change to meet new audience demandsMillennials are less responsive to traditional comms methods.
A new global survey by the Economist Intelligence Unit and Genesys, shows that most companies are struggling with how to adapt their businesses to serve a new wave of consumers from the Millennial generation.
42% believe that a bigger share of investment in marketing and service should go toward catering to Millennials.
Shift focus to baby boomers or Millennials?
Analyzing how Millennials – those born between 1982 and 2001 – will impact the customer experience, the survey asked senior executives from around the world how they're creating a customer experience to attract and retain Millennials.
Three key findings emerged:
- Investment strategies are shifting to favor Millennials: 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 Millennials even though they overwhelmingly agree that such steps are needed, with 75% saying Millennials will impact their organization as consumers in the next 3 years.
- It's an Enterprise 2.0 world: Most companies have a sophisticated understanding of what it would take to adapt, but aren't ready to change their customer-engagement model by leveraging social networking, peer marketing, better online support, text messaging and blogging.
Match communication to customer needs
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.
If many companies are yet to tailor their external processes to target, attract and retain key younger customers, it suggests there's still a vast amount of work needed in adjusting internal communication methods for this burgeoning group.
After all, the millennial generation outnumbers baby boomers today, and will continue to grow in influence as the majority of Millennials reach adulthood in the next decade.
What does "The Gen Y Guy" think?
The Hub spoke earlier today with Jason Ryan Dorsey, aka, "The Gen Y Guy" (pictured, right), and asked for his interpretation of the report's findings.
“My interviews with Millennials working at companies large and small has definitely revealed a level of frustration or even disenchantment with many standard methods of internal communication (i.e., 'Oh, great, another 47 PowerPoint slides...')," he says.
However, this doesn’t mean Millennials are right, Dorsey says. "It just means they want to be communicated with differently. The challenge for companies is recognizing that as much effort as they put into delivering an external message that connects with Millennial consumers, they need to put the same type of effort into communicating with Millennials internally."
The realization, he says, usually comes when business leaders see that not reaching Millennial consumers affects a percentage of their sales, but not effectively communicating with their Millennial employees can affect every customer interaction they have.
Methods to reach millennials
The Economist Intelligence Unit found the relatively recent proliferation of blogs, podcasts, 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 report says.
The same can be said for internal customers. “Millennials have come of age sharing their most personal experiences online. They’ve talked about dating, family, religion and dieting. It only makes sense that they would use the same medium to share their feelings about work – good and bad," says Dorsey.
Give employees an online voice
Companies can best address this by establishing an online community where employees can connect, such as on Facebook, or through their intranet, Dorsey advises.
"If companies don’t designate a place for employees to gather online, Millennials will take it upon themselves to create it. You want to avoid that as much as possible.
Millennials simply don’t know that they can’t talk about certain work related subjects in the public domain.
"Companies should also clearly explain to Millennials what is and isn't acceptable for them to post on online. Many times Millennials simply don’t know that they can’t talk about certain work-related subjects in the public domain,” Dorsey says.
Three suggested Millennial motivators
The survey identified key features and motivating factors that companies expect to resonate with Millennials, which revolve around issues such as convenience, customization and community (see Figure 1, below).
Figure 1. Percentage of executives that believe the following techniques are most effective in targeting millennials
For example, when it comes to purchasing products and services, corporate reputation and brand are less important with the Millennials than peer recommendation and viral marketing (such as online promotional communications passed from one customer to another).
“This is absolutely true," says Dorsey, "Millennials have been marketed to so much that they've developed a mistrust for anything that feels like a typical pre-packaged marketing or branding campaign. They may like the jokes or the pretty faces but when it comes to buying a cellphone or a car they're going to go online and see what other people their age are saying."
Millennials have developed a mistrust for anything that feels like a typical pre-packaged branding campaign.
It’s the same reason homemade videos on YouTube – used for both internal and external purposes – for or against a certain brand or product gain so much traction with this age group, Dorsey says. "They see them as authentic or at the very least having honest intentions.”
Implementing a Millennial strategy
The survey found that 75% of companies believe that in the next 3 years they'll need to have a Millennial strategy in place, with 30% expecting a major impact that will lead to change across the organization and 45% expecting a more modest impact.
Despite this, 54% of respondents say they've yet not set their strategy for targeting, attracting, or retaining Millennials, while 32% say they have done so.
Most companies have not kept pace with the Millennials' preference for interacting through newer, community-based technologies, as most firms continue to rely on telephone, email and store/office-front points of contact.
Don't ignore your internal fountains of knowledge
“Many companies haven't embraced newer communication technology simply because they're comfortable with what they have, they’re busy using what they have, and for a long time it’s worked," says Dorsey.
“The question becomes: How will companies share their new strategy with their Millennial employees?" warns Dorsey.
"It'd be ironic if they focused all their attention externally only to have the message go unheard by Millennials internally (probably because they were reading their text messages when the fax arrived!),” he quips.
Most effective communicatin channels for Millennials
Respondents were also asked to select their top 3 communications channels they believe are most effective in serving Millennials (see Figure 2, below).
Figure 2. Communications channels believed most effective in serving Millennials
Does Dorsey agree with the opinions put forward in Figure 2?
“While online communities are effective for providing a forum for people to post their experiences, by their very nature they're difficult if not impossible to control. Because of that I think companies should focus on enriched content which they can control and target it to incorporate the best of what online communities have to offer,” he says.
Balancing communication
Executives overwhelmingly agree (81%) that each generation has specific work and marketplace needs, but the survey results shows they're split on which demographic group should receive the greater share of market investment.
"If your organization will soon be dependent on Millennials for its core operations then get ahead of the curve. You'll have an advantage when other companies are playing catch up. If your organization will have a much slower pace of hiring Millennials, then it makes sense to put your resources where they best match your likely demographics.
75% of companies believe that in the next 3 years they'll need to have a Millennial strategy in place.
"The key is to not cater to any one group so much that you alienate the others,” Dorsey advises.
Traits of Millennials
Below are some further findings from the survey. Respondents were asked the following questions:
"In your opinion, what do you consider to be the most distinctive characteristics of Millennials?" Select up to 3.
- Ease with technology: 74%
- Willingness to challenge convention and standard business practices: 38%
- Innovation and fresh ideas: 32%
- Interest in building relationships, teams and networks: 30%
- Represents a large and growing market: 28%
- Comfort communicating feedback: 20%
- Commitment to social causes: 18%
- High levels of disposable income: 16%
- Reliable work ethic: 3%
- Other, please specify: 2%
- Don’t know/Not applicable: 3%
"What techniques do you believe are most effective in targeting Millennials?" Select up to 3.
- Participate in viral marketing and peer-to-peer recommendation sites: 41%
- Sponsor or advertise in areas populated by Millennials (eg, extreme sports, music venues, chat rooms, social networking sites): 36%
- Delivering great product at a great price: 35%
- Focus not only on Millennials but also on their key influencers (eg, parents, peers): 30%
- Contribute to social causes that Millennials support: 28%
- Contribute to corporate or issue blogs: 21%
- Wireless text messaging: 21%
- Exploit contests, promotions, and retail tie-ins: 19%
- Develop online games for company website: 12%
- Other, please specify: 1%
- Don’t know/Not applicable: 6%
You can download a free copy of the research at the Genesys website.
Have your say
Have you tapped into the wants and needs of your internal Millennials in order to adjust your external communication practices? How have you used feedback from this group to get better customer results from the Millennial generation?
Do you agree with the results of Figure 3 – in your opinion, what communication channels are most effective for communicating with Millennials?
Recommended resources:
PODCAST: Ways to engage generation Y
Melcrum report: How to use Social Media to Engage Employees
How will tomorrow's employee behave?
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