How to Resonate with the Generation Y Customer

Brian Cantor

When it comes to producing polarizing dialogue within customer management circles, few topics excel better than the Generation Y—aka Millennial—customer.

On the one hand, a surprising number of suits typically thinks of this group as lazy, underachieving and excessively conservative on spending. Hell, they do not even want to work in our call centers! And though they like tooting their own horns when it comes to making meaningful purchasing decisions, their actual transactional leash is limited to what mommy and daddy will approve.

And yet, virtually every marketer has a soft spot for this elusive group and is willing to pay top dollar for the mere prayer that their message will reach the young adults. Millennials dictate trends in technology and fashion, and they help brands create a meaningful, outward identify to attract future purchases. They, quite simply, separate happening brands from the dying brands.

While many segments of the Y Generation will undoubtedly bear some similarity to the former description, customer management professionals should exclusively approach this demographic from the latter perspective. After all, as Boston Consulting Group’s Christine Barton confirms, "U.S. Millennials already shell out and influence the spending of hundreds of billions of dollars annually -- an amount that will only increase as they mature into their peak earning and spending years. Those companies that truly 'get' this generation will have an opportunity to differentiate themselves and forge profitable long-term relationships with Millennial consumers."

But beyond advertising during episodes of "The Walking Dead," "The Voice" and "Jersey Shore," what else does it take to connect with today’s Millennial customer? What creates the necessary transcendence from targeting to engaging?

BCG recently conducted a study on the attitudes and behaviors of 4000 Generation Y and 1000 Non-Generation Y customers, which identified specific patterns and distinctions between the two groups. By no means was the advice to abandon ties with those older demographics who presently "old the money," but the study also revealed some clear pathways to engaging the group forecast to drive the greatest level of influence and long-term results.

Millennials Are Not Bound By Channels & Locations
The Trait
Tech-savvy, Generation Y customers are significantly more likely to use MP3 players (72-44 percent), gaming platforms (67-41 percent) and smartphones (59-33 percent), while showing lesser proclivities for desktop computers and cell phones. They are also less likely to consume media via hardcopy books and televisions.

Clearly, the Millennial customer is a multi-channel who expects to achieve valuable interactions whether he is on his laptop or smartphone and whether he is at home or at a local Starbucks.

The Strategy
Brands need to be flexible in their customer engagement strategies, assuring they have organic presences in all channels. Millennial customers do not expect to make significant compromises when engaging with brands on their smartphones—and, in fact, might prefer that method of engagement—so it is not enough to say you’re multi-channel. You must be multi-channel.

Millennials Live for Social
The Trait
For Millennials, social media is not simply a means of connecting with old high school buddies or letting Justin Bieber know how much you want his babies. It is also an avenue for learning about products and brands—and one that is perceived as infinitely more transparent and believable than corporate messaging and even stuffy professional reviews. In addition to being more likely to engage with brands via social (53-37 percent), they are also more likely to favor brands with Facebook and mobile presences (33-17 percent).

The Strategy
Social engagement with Millennials is about far more than offering coupons and discounts, and brands need to take seriously its ability to filter their messaging into the lives—and circles of influence—of the young adult customers. Generation Y customers see social engagement as a potential value add, and they thus want to see legitimate engagement from the brands they choose to "like." Once they get that engagement and find themselves exposed to a mixture of brand-driven and user-driven discourse, they are more likely to put their lucrative trust in the brand.

Millennials Care About Efficiency
The Trait
While quality customer service certainly matters, especially to a group known for sharing its experiences on social media, it cannot be used to excuse convenience. Generation Y customers, in fact, are willing to trade friendly service for a quick trip through the line and have a particular proclivity for efficiency-driven establishments like convenience stores and Chipotle-style "fast casual" restaurants. This need for convenience also explains why mobile commerce resonates so well—they don’t want to wait until they can get home and log onto a computer.

The Strategy
Process must part of the experience. When we point to businesses like Zappos, the Ritz-Carlton and Apple as the customer experience elite, we often focus on the "personality" aspect, highlighting qualities like culture, accountability and friendliness. These matter—it is not as if Apple is anything less than a rockstar brand for Millennials—but they do not define the entirety of customer experience. For a generation addicted to 140-word status updates, quick fixes and "instant gratification" are king. If you issue a compelling value proposition to young adult customers, you better not stand in the way of their transactional execution. Quick check-out, self-service, mobile engagement, social support and community-based reviews are the keys to resonance.

Millennials Care About Right vs. Wrong
The Trait
In many cases, "doing good" seems like a superfluous customer engagement strategy. Sure, it does not hurt to show compassion for charitable causes and a preference for sustainable practices, but as a deciding factor, issues like price, product quality and customer service seem like greater X factors.

Do not try to sell that line to Millennials. Though Millennials, themselves, are not significantly more active when it comes to volunteering their own time, they show a clear preference over non-Millennials towards cause marketing (37-30 percent) and also demonstrate a passion for socially-conscious brands.

They also have a strong proclivity for sharing details of cause campaigns and fundraisers with friends, serving as an invaluable resource for brands who want to put forth an image of consciousness.

The Strategy
These days, it is okay to care about something. One of Chipotle’s key branding advantages over rivals Baja Fresh, Moe’s and Qdoba is its emphasis on humane farming practices. Starbucks is known for not shying away from the reality of political discourse. Apple has tied environmental concerns into promotion for a number of its computing products.

Obviously, businesses cannot ignore the sensitivity of certain political, socio-economical and moral issues and must be mindful of the impact its messaging sends to the audience. But proudly taking a side or vowing to make a difference is not inherently bad, and as evidenced by the Generation Y preference study, could even be a meaningful tool for attracting elusive, influential young customers.

For the full breakdown of BCG’s study: