Does Your Contact Center Speak “Millennial?”
July 23, 2014
July 23, 2014
Baby Boomers are at the core of many financial services institutions’ product and process design. But, the way you’re used to managing customers must shift in line with the trends of customer segments. The economic recession that bottomed in 2008 and 2009 changed the spending habits of Baby Boomers based on net worth reductions, lost income and reduced home and asset valuations. Even as the economy recovers, Baby Boomers—previously your most lucrative market—are not showing a propensity to return to pre-recession spending levels. If your bank hasn’t redesigned its offerings to attract and engage Millennials, the time is now to offset the decline in Baby Boomer spending.
Millennials Are Not Baby Boomers
The U.S. Census Bureau estimated in 2010 that the U.S. population for Millennials is 79 million—nearly as large as the 81 million Baby Boomer segment. Millennials are generally well educated and culturally diverse; more than half of them are over the age of 18 years old. The oldest of this segment in 2016 are 35 years old. According to the 2015 World Retail Bank report, Millennials are likely to be your least loyal customers and most likely to switch banks. They are very different from Baby Boomers, as illustrated below, requiring different techniques, styles of communication and conversational relevance from customer service agents.
As you can see, an agent resolving an issue or upselling a Millennial would need to alter the conversation appropriately in order to provide an experience that satisfies both human and business needs for each customer. There are obviously opportunities to be had on both sides, but Millennials offer a progressive path to increased financial services revenues, while Baby Boomers’ needs are declining and focused on more traditional channels and product offerings.
Customer Segmentation Requires Adaptable Skills
Customer segmentation is an area that financial services organizations have been increasingly challenged to navigate. The buying habits from one generation to another vary greatly, and so do their financial lifestyles and preferences. To address this challenge, you must consider the skill sets that the vendor brings to the table. The vendor must have bench strength in customer interaction design and agent skills training to ensure responsiveness to customer segment needs and preferences that may not be optimized currently within your organization.
Process Design for Millennial Progression
Unlike Baby Boomers who own more financial products, Millennials can be guided and progressed from the beginning of their careers throughout the varying stages of their lives. As Millennials have yet to reach their financial peak, designing a progression from debit card to credit card to auto financing to savings account to home mortgage, and so on, will help to build customer relationships. With a well-orchestrated progression plan, your contact center can play a pivotal role in extending the customer lifecycle, increasing share of wallet—and loyalty—at each stage.
A partner with a proven methodology for designing customer interactions that help a specific customer segment evolve as they mature will help your institution tap into and develop new revenue streams to offset the decline of fading generations. It is this ingrained ability to adapt as new generations enter the marketplace that will ensure that your organization will meet each customer segment on its own terms, satisfy them and increase the value of the customer relationship.
You may be seeing statistics that say the need for contact center agents is declining as Millennials move to online and mobile channels, but it’s more reasonable to look at the change in channel preferences as a shifting of skill sets in the contact center that is gradually occurring from phone to email, chat and text. Make sure that your partner has a plan for how this transition will occur and that they are able to balance the shift in agent skills in step with the shift in customer behaviors.
Each customer segment places different demands on the contact center. Rather than approaching segments in a siloed fashion, it’s important to select a partner who has effective training programs to help agents adapt to the needs of each customer they serve—whether Millennial or Baby Boomer, or the Gen X group that falls in between the two.