Five things to understand about your next generation customers.
You’re standing in your local coffee shop waiting for your order watching other customers try to keep from spilling their coffee as they open the door. What if you sent a suggestion to the coffee shop and they began installing automatic doors?
This is the idea behind the My Starbucks Idea community on which over 200,000 ideas have been submitted. It has not only led to the introduction of almond milk and stevia in Starbucks stores, but it has resulted in the development of recyclable coffee cups. This is the type of relationship that the next generation of customers is expecting – they want to be heard, not marketed at. Companies like Nike and Starbucks have capitalized on this desire with direct-to consumer customizable products.
Sweeping generalizations have been made about the next generation of customers from “They want ‘digital’ everything” to “They don’t have the same values as their predecessors.” So it’s not surprising that application leaders charged with supporting customer experience are wondering what their next move should be.
Peer validation has become a key way for many younger people to self-evaluate, thanks to social media, which they use as sources for “reality checks.”
To complicate matters, they’re broadly given the misnomer of Millennials when for most organizations, the next generation of customers refers to the youngest Millennials and mostly to older members of Gen-Z. Millennials are people born between 1980 and 1994, and who are 23 to 37 years of age. Gen-Z, is a class of people born between 1995 and 2009 who now range from eight to 22 years.
“Interest in understanding the next generation of customers is growing. With big investments being made in customer experience strategies and technologies, organizations can’t afford to get this wrong,” says Jenny Sussin, research vice president at Gartner. “To date, however, we’ve seen some scrambling to increase engagement rather than focusing on what these customers want from companies that is truly different from those who’ve come before them.”
Gartner’s research suggests that application leaders should focus on five key differences in the next generation of customers:
- They Don’t Trust You, Yet
Trust in businesses, government and media is at an all-time low. The next generation of customers don’t always trust authorities. Instead, they gather information from other sources that they do trust to be accurate. Peer validation has become a key way for many younger people to self-evaluate, thanks to social media, which they use as sources for “reality checks”.
- They Want a Reciprocal Relationship
When it comes to the customer relationship, the next generation of customers is looking for benefits akin to those of a “real world” relationship, as they may differentiate less between online and offline activities. Benefits include regular engagement, the opportunity to be heard, and the understanding that the organizations they engage with will support causes they care about. They actively look for opportunities to co-create with the organizations they associate with.
- They Want to Be Trusted to Self-Serve
Although next-generation customers want engagement with the organizations they deal with, they also strongly desire self-service. They don’t see the need for another person to be involved when they can do it themselves with technology – which has typically been reliable for them. They grew up in an era of immersive video gaming; from games played on game consoles, smartphones and computers, they have learned that an initial failure to accomplish a task doesn’t mean that they cannot accomplish it, it simply means they need to try again.
- They Want to Buy Experiences, Not Products
Unlike traditional products, experiences aren’t easily mass-produced. Members of the next generation of customers flock to businesses that treat them as if they were special, rather than as “just another number”. These customers want to have a connection, a relationship, with the organizations they deal with. They want to be in a position to endorse and support organizations, as long as they know they can trust them and believe in their mission.
- They Influence Other Customers
Some organizations choose not to pay attention to Millennials and Gen-Z because they don’t perceive them as their target audience. Although Gen-Z might not be your customers today, their behavior will dictate consumer dynamics for years to come. This is because over 70% of Gen-Z influence their parents’ retail purchasing decisions.
“The next generation of customers influences far more than just retail purchasing decisions,” Sussin says. “Just think about how Millennials pioneered the adoption of Facebook and WhatsApp – which were subsequently adopted widely by other generations.”
Gartner clients can read more in the report “Five Things to Know About the Next Generation of Customers by Jenny Sussin, research vice president at Gartner.
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