3 Keys To Winning Millennials Hearts & Business

Transcription

1 3 Keys To Winning Millennials Hearts & Business i

2 Table of Contents Introduction....1 Who Are the Millennials? Keys to Winning Millennials Hearts & Business...3 Conclusion Learn more about the J.D. Power Millennials Insight Report: The Customer Experience Perspective SM Copyright 2016 by J.D. Power and Associates. All Rights Reserved. Reproduction Prohibited. The information contained herein has been obtained by J.D. Power from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, J.D. Power does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or for the results obtained from use of such information. This material is the property of J.D. Power or is licensed to J.D. Power. This material may only be reproduced, transmitted, excerpted, distributed or commingled with other information, with the express written permission of J.D. Power. The user of this material shall not edit, modify, or alter any portion. Requests for use may be submitted to information@jdpa.com. Any material quoted from this publication must be attributed to 3 Keys to Winning Millennials Hears & Business, published by J.D. Power, 2016 J.D. Power and Associates. All Rights Reserved. Advertising claims cannot be based on information published in this special report. ii

3 Introduction You re looking to understand Millennials. You re not alone. This e-book, 3 Keys to Winning Millennials Hearts & Business, extracts just a few of the many insights from the J.D. Power Millennials Insight Report: The Customer Experience Perspective, SM a guide to understanding the most misunderstood generation in the world. It s no secret that Millennials make business leaders nervous. Profiled in countless studies as nonconformists who mistrust the establishment, the Millennial generation is simultaneously one of the largest demographic cohorts in U.S. history and the least understood. They are the most educated, most ethnically diverse, most technologically adept, and, we think, the least likely to be influenced by traditional marketing and customer service approaches. Beyond anecdotal reports and blanket generalizations, however, companies understand very little about the Millennial consumer and the distinct, often subtle nuances involved in engaging this population. J.D. Power is in a unique position to help change that. We ve been in the business of decoding the subtleties of what makes consumers tick for the past 48 years. Over the course of that time, we ve analyzed virtually every generational and demographic profile from the Greatest Generation to Gen Z by studying patterns of consumers preferences and levels of satisfaction across a wide variety of industries. This e-book derived from the Millennials Insight Report, which is based on the findings of more than 20 internal studies and several external studies published by governmental and academic sources provides some new facts and concepts about the Millennial generation found in the report. Let s get started! 1

4 Who are the Millennials? There are lots of definitions out there. Various respected governmental, academic, and research sources use different time periods to define the birth years for Millennials, but which one is correct? While there is strong agreement in research circles about the time period defining the Boomer generation, there is less agreement about how to define the Millennial generation with the terms Gen Y and Millennial often used interchangeably. To address the issue, J.D. Power conducted an online key-word search of the terms Millennial and Gen Y using over 30 research sources, including academic and commercial research to identify the most commonly used period to define when Millennials were born. The strongest consensus uses the years between 1982 and 1994; thus, all references to Millennials in this e-book are based on this time frame Strong consensus Moderate consensus Low consensus Strongest consensus is that Millennials were born between 1982 and

5 The 3 Keys to Winning Millennials Hearts & Business 1 Not one OF a million, but one IN a million Many have questioned whether Millennials are truly that much different from the generations preceding them in terms of their behaviors, preferences, and expectations. Based on our analysis of nearly two dozen internal syndicated studies, the answer to this question is an unambiguous yes, they are genuinely different. And no, it s not just a life-stage thing. So what makes them different? There are four primary traits that typically define the Millennial generation. J.D. Power research shows that they are more racially and ethnically diverse, more educated, more reliant on technology, and less wealthy than previous generations. DIVERSE HIGHLY EDUCATED TECH RELIANT LESS WEALTHY Compared to a Gen X er who was years old in 2005, a Millennial of the same age in 2015 is less likely to identify as white (71% vs. 82% in 2005) 15% 32% have an advanced college degree vs. 10% of Boomers of Millennials agree completely that they are interested in new technology products offered vs. 20% of Boomers Millennials have a higher ratio of debt as a percentage of annual income (155% vs. 120% for Boomers) 3 Sources: J.D. Power 2015 Multi-Function Inkjet Printer Satisfaction Report SM ; J.D. Power 2016 U.S. Automotive Media and Marketing Report Winter SM ; J.D. Power 2015 Retail Banking Satisfaction Study SM ; J.D. Power 2015 U.S. Full Service Investor Satisfaction Study SM

6 1. Not one OF a million, but one IN a million (Continued) On top of these four traits, Millennials are not just statistically different. They feel different as a generation and even as individuals among their peers. There s a strong impression of individuality deeply embedded in the generation s sense of self, their nonconforming nature, and their world view. We might even go so far as to say that they are impressed with their own specialness, or exceptionality, both as individuals and as members of their generation. But do not mistake these self-assessments for narcissism or rebellion. Millennials are simply different. They are less likely to go with the flow, compared with previous generations, preferring instead to chart their own course. Are Millennials different from other generations? Watch the video at jdpower.com/millennialsaredifferent Definitely different from my parents generation I can definitely see that. We grew up during a time when computers starting becoming a big thing, they were in the home, they were accessible to everybody. So we really grew up with technology moving at a rapid pace KEY TAKEAWAY Don t treat Millennials like a homogeneous group by age and perceived life-stage; acknowledge their individuality and engage them accordingly. It s true they may want the same things that other generations want e.g., to be heard, receive better service, and have their problems resolved but unlike consumers in previous generations who accepted that, in matters relating to products and customer service, things are the way they are; just deal with it, Millennials are more vocal in saying this is not ok and in demanding that their expectations be met. 4

7 The 3 Keys to Winning Millennials Hearts & Business 2 They have higher expectations. J.D. Power research finds that Millennials have more problems with the products and services they use across various industries than Boomers, which means they have higher expectations AVERAGE NUMBER OF PROBLEMS BY INDUSTRY Millennial Boomer Telecom Financial Services Travel & Leisure 5 Sources: J.D. Power 2015 Syndicated Studies

8 2. They have higher expectations (Continued) What s driving these higher expectations? While not the only factor, growing up during the rapid evolution of technology is one of the drivers. By the time older Millennials (born from ) were entering middle school in the mid-1990s, the majority of U.S. households had a home computer, with access to the Internet becoming commonplace and the use of mobile phones beginning to take off. By the time Millennials had grown into adulthood, technology glitches had been worked out unlike the preceding generations who experienced the growing pains of that same technology as a work in progress. It should come as no surprise then that compared to the previous generations, Millennials expect products and services to work right the first time, especially since they grew up during a time when it seemed like they always had worked right. When products don t function as expected, their perceived value is negatively affected and the perception of value is even more important to Millennials than it is for other generations. KEY TAKEAWAYS SATISFACTION WITH ONLINE PRODUCT INFORMATION AND SERVICES Millennials have a very low tolerance for errors or delays. Get it right the first time. Offer tools that enable Millennials to solve problems on their own. But when they do need help, make sure your team is there for them and that they deliver. Why? 749 Millennials Boomers 765 Because Millennials expect high-quality information and communications as part of their product experience, they also expect excellent online service and relevant information on Web-based account management. 701 Info & Communication Web Account Management Sources: J.D. Power 2015 Omnibus Surveys 709 6

9 The 3 Keys to Winning Millennials Hearts & Business 3 They re less loyal and have a greater willingness to try new brands. The aforementioned second key Millennials have higher expectations segues smoothly into this final key. So what happens when products and services do not meet expectations? Perceived value is negatively impacted regardless of generation, but especially among Millennials. Once that happens, Millennials are quick to move on to a brand that will meet their wants and needs. Retaining a Millennial customer becomes a battle of attrition. Loyalty may be freely given initially, but maintaining that loyalty among consumers in this segment is definitely more difficult. I m more focused on where I can get the best deal. There s definitely brands that I ll go to first, but it s kind of I shop around for everything. Loyalty is a battle of attrition. Watch the video at jdpower.com/millennialloyalty 7

10 3. They re less loyal and have a greater willingness to try new brands (Continued) J.D. Power s research dug deeper into why Millennials place so much emphasis on perceived value. In part, it has to do with one of the four traits touched on within the first key of this e-book: compared to other generations, Millennials struggle financially. They have a lower accumulation of wealth, brought on in large part by graduating from college during times of recession and incurring a substantial amount of student debt. AVERAGE GRADUATING STUDENT DEBT BY YEAR $28,900 Sources: Institute for College Access & Success, Project on Student Debt $18, Thus, their financial life fuels much of their decision-making. For one, they are more cost-conscious than Boomers they have to be. This does not mean, however, their decisions are entirely driven by cost, but rather that cost tends to be connected to perceived value. 8

11 KEY TAKEAWAY Products and services: They just need to work. If and when they don t Resolve problems, and resolve them quickly. When a problem is resolved, Millennials are substantially more likely than Boomers to reuse a product or service. HOW MOMENTS OF TRUTH IMPACT LIKELIHOOD TO REUSE BRAND 39% % of Millennials definitely will reuse 43% 32% 27% % of Boomers definitely will reuse Providing superior customer service is essential to satisfying Millennials, which, in turn, leads them to repurchase or reuse products and services in the future. 8% 7% Did not have a problem Had a problem, problem resolved Had a problem, problem not resolved 9 Sources: J.D. Power 2015 U.S. Auto Insurance Study SM ; J.D. Power 2015 U.S. Full Service Investor Satisfaction Study SM ; J.D. Power 2015 Retail Banking Satisfaction Study SM ; and J.D. Power 2015 U.S. Primary Mortgage Servicer Satisfaction Study SM

12 Conclusion Consistently deliver and hasten problem resolution. Each of the three keys outlined above have significant implications for businesses looking to optimize the Millennial customer experience for a growing base of consumers that now makes up 18% of the total U.S. population, according to the U.S. Census Bureau. Consistently delivering high-quality products/services and quickly solving any problems is the best way to earn and retain the business of Millennials. For companies that want to cater to Millennials, understanding that this generation is highly diverse, well-informed, and demanding and also providing products and services that cater to their individual requirements is essential. The good news for companies is that research shows Millennials are also willing to share information about themselves if it will help to create products and services geared toward their specific needs. Putting that information to work will be critical. 10

13 Learn more about the J.D. Power Millennials Insight Report: The Customer Experience Perspective SM The J.D. Power Millennials Insight Report: The Customer Experience Perspective SM is the largest examination to date of the customer experience requirements of this consumer segment. Our goal is to help companies grasp a solid understanding of how to design a customer experience that addresses this population s wants and needs. Based on over 600,000 responses (including over 100,000 Millennials) from studies spanning multiple industries SAMPLE SIZES INDUSTRIES Automotive The J.D. Power Millennials Insight Report provides insights about the dynamics that help to define the generation. The report looks at the generation s consumption preferences that will help companies to understand, predict and satisfy Millennials needs. The report s findings and predictions draw on the results of dozens of internal J.D. Power studies including automotive, banking, credit card, hotel, wireless, investments, primary mortgage, health insurance, Internet usage, media usage, etc. as well as external studies published by government, academic and other resources. n=634,201 Total n=126,315 Millennials n=246,594 Boomers Millennials are defined as born between 1982 and 1994 Boomers are defined as born between 1946 and 1964 Travel Technology, Media & Telecom Financial Services Healthcare Utilities & Infrastructure Insurance 11

14 Access the Report More information about this report can be found at com/millennials. To access the largest report to date on the customer experience as it relates to the growing Millennial generation, contact us here > 12

15 Join the social conversation Join the social conversation about millennials by searching and using the hashtag #JDPMillennialsReport Follow us on J.D. J.D. 13

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