Ushur, Inc

Millennials are expected to occupy 50% of the US workforce by the year 2020, just three years from now. Their purchasing power of $200B will make a significant part of the US economy. We interviewed this group to learn more on their social and consumer behavior and produced the 2017 Millennial Mobile Consumer Report.

This year’s report found that Millennials are messaging more than ever. While they want their social behavior to translate to their consumer experience, Millennials are finding that companies are not delivering on their expectations, causing them frustration and forcing them to change brands to avoid outdated customer service tactics and experiences.

The report shows the instant society with real-time interactions has already begun, and it’s time for companies to catch up.

You probably wouldn’t be surprised to find that Millennials are frequently texting throughout the day, with more than 15% of respondents stating they are sending a hundred text messages or more. Now let’s compare that to phone calls. When asked about the number of times a millennial dials and/or receives a phone call, a large number of respondents, 35%, said that they make less than two calls per day. Answers show that messaging remains the most popular form of communication for millennials, 100 times over.

But some may wonder, “Well that may be how they feel in their personal lives, but that doesn’t mean that is the way in which they’d like to interact with a brand as a consumer….” However, our survey shows this actually seems to be the case. Millennial consumers seem to expect instant communication with their brands, and don’t want to change their behavior from their personal life to their consumer one.

Just as the average Millennial expects to be able to communicate instantly in their personal life, they expect to be able to reach the business of their choice at any time of the day, and get answers as soon as they request them. 72% of Millennial consumers expect a company to get back to them with answers to their questions within an hour, with 30% saying they expect those answers instantaneously. If companies can’t live up to those expectations, our research shows that there will be a price to pay.

When just 6% of this group prefer phone calls as a channel, waiting on hold to engage with a brand is not an acceptable experience for Millennials. When ranking unpleasant activities, 1 in 4 respondents listed calling customer service as their top 3 most unpleasant things to do – in a list that included paying bills, going to the dentist, and studying for an exam. Nearly half of respondents even stated they have switched companies after waiting on hold with customer service for too long. To give you an idea what this translates to in lost revenue, Forbes estimated that US companies lost $61 billion due to poor customer service in 2016.

Automated messaging seems like a welcome solution to their instant gratification needs. 67% of millennial consumers have messaged with a business before. Of those that have used the automated communication, 88% would do it again after their previous experiences. From this data, it looks like Millennial consumers are ready and expecting self-service through automated instant messaging.

This seems true for multiple use cases. When asked which areas they would prefer to message a company rather than calling them, respondents answered that they would prefer messaging when a company to ask for directions and hours, to renew a subscription or order a refill, to check the status of an order, to check pricing, and to schedule an appointment.

Our survey shows that millennial consumers expressly feel that their engagement wants are not met by the brands they are currently doing business with. When asked which industries could benefit from more customer engagement through instant messaging, nearly every sector fell significantly short of their expectations.

As you can see from the gap that exists between what millennial consumers expect to what brands are able to deliver in terms of engagement, there is a huge opportunity  for businesses to quickly adopt messaging based interactions for their marketing, customer service, and sales needs in order to cater to this fast growing demographic

Our report showcases an opportunity for companies to reach their millennial customers where they’re at and what they want, not to mention the  24/7 access to serve them.

This translates to deploying automated mobile messaging based solution to serve customers without the costs of human agents or expending high touch, and with the added convenience of anytime, anywhere access to service. This is perhaps the most compelling case for this new category that some call chat bots or others refer to as “conversational interface”.

Capitalizing on this market’s needs could mean big for business as we all know that Millennials account for $200 billion in buying power. If companies can close the gap in engaging those consumers expecting instant interactions, we will have found the perfect application for this new instant message solution full of hype.

Messaging has become the most dominant and ubiquitous channel of engagement. That is probably why 4 in 5 companies want to text their customers. However, only 1 in 4 marketers use this medium to reach their customer base. Many companies are just not keeping up with changing consumer behavior, and in turn creating a digital divide. If consumer behavior has changed so dramatically, why are marketers still choosing email over instant messaging for customer outreach?

Human attention is dwindling – fast. According to a study by Microsoft, over the past 17 years the human attention span has fallen to below just 8 seconds.  While our attention span is dwindling, our power to consume information is at a faster rate than ever. Addictive technology behaviors have changed the name of the game. The first thing those between 18-24 do when they lose focus is check their phone. For over half of them this means they will reach for their phone every 30 minutes. And while they are on those phones, over half of those sessions last only 30 seconds.

Do these new parameters of engagement mean promotional marketing as we know it is dead in the water?

Nowadays, we seem to think in chunks of 140 characters at a time and as such, we consume content dramatically different than in years past. Nearly three-fourths of the millennial generation, which is currently the largest living generation group, watch their favorite entertainment using streaming technology instead of live TV, less than one in five use email regularly, and over three in four solely use messaging for their communication needs. If consumer behavior is changing, companies need to follow suit with their marketing tactics.

For one, evidence already shows older techniques no longer drive value. Driving promotional marketing the same way that has been done through traditional marketing leads to drastically lower conversion rates. When was the last time you opened those flyers that the mailman delivered to you? You can take a look at email marketing vs. messaging, as another example. It is no surprise that a text message has an open rate of 99 percent, whereas less than a third of promotional emails are opened. In our daily life we open respond to most of our text messages, but many emails end up in the spam/promotional folder untouched. Even more disparate are  the click-through rates (CTR). Pew Research Center reveals that if you include a link in your text message, customers will click through that link at a rate of about 36 percent. That same link in an email? The customers click through just 6 percent of the time.

Yet companies continue to push content through legacy channels like email, even for transactions with existing customers.

Technology is moving so fast, that even ever-present social media may become less effective in engaging with young consumers. Business Insider research shows that millennials are beginning to move from the public spheres of social media to private media in order to communicate with friends and family. Messaging apps, on the other hand, have exploded, with Whatsapp having over 1 billion users to date. Facebook’s major investments have been in their Facebook Messenger, including bot applications. And just like that, messaging app usage has officially surpassed that of social networks.

There is a seismic shift in consumer behavior from public sphere interaction, to private, instant messaging and many companies are behind the curve in reaching their customers in the same way.

The exponential growth in messaging apps and instant-messaging engagement shows consumers want fast and private  engagement.The first step for companies to reach customers in this day and age is to realize that promotional marketing as we know has changed. Companies must meet consumers where they are and using modes that they prefer. And for the foreseeable future that will be instant-messaging.

 

Sources:

1. Sable, David. “Attention Spans Dwindling, Processing Power Increasing. Are We Becoming More Like Our Primal Ancestors?” The Huffington Post. TheHuffingtonPost.com, 30 Jan. 2017. Web. 06 Apr. 2017.
2. Hendricks, Drew. “10 Marketing Tactics To Increase Conversions.” Forbes. Forbes Magazine, 18 June 2015. Web. 06 Apr. 2017.
3. Intelligence, BI. “Messaging Apps Are Now Bigger than Social Networks.” Business Insider. Business Insider, 20 Sept. 2016. Web. 06 Apr. 2017.
4. “Text Marketing Vs. Email Marketing: Which One Packs a Bigger Punch? [Infographic].”Business 2 Community. N.p., n.d. Web. 06 Apr. 2017.
5. “5 Facts That Prove the Power of SMS for Business.” TTAG Systems, n.d. Web.

Companies with the best NPS scores power their business from making their service delivery front and center. Everything they do as a business focuses and delivers on the service experience for customers. Think of companies like Apple, Amazon, Costco which consistently rank in the top 10 for brands with the best NPS scores. These brands invest in infrastructure and technology to deliver outstanding customer experiences, and customers in turn reward these brands with their loyalty and active brand promotion.

97 percent of consumers cite customer service as important in their brand choice and loyalty, and loyal customers are 4 times  as likely to refer other customers to your brand.

But service delivery remains an afterthought for most companies. Historically, it has been an expensive proposition to deliver service because the bulk of the service has been driven by expensive human capital. It’s estimated by Metric Net that each minute of a customer service call costs on average $1.03 and each agent receives an average 2,202 calls per month. Hence, investing in service delivery is often looked at as an avoidable, costly overhead and companies consequently make it difficult to reach their customer service teams, with 75 percent of customers stating that it takes too long to reach an agent when calling for customer service.

The focus has been to avoid human touch (or any touch at all) rather than solving the problem. Companies would be surprised to find out though, that if customers were to have a choice, they prefer self-service rather than talk to a person.

A Zendesk survey found that 67% of customers prefer self-service over speaking to a company representative.

Companies avoid effective, comprehensive customer service because they think it will cost them in extraordinary expenses of human capital, when really they could solve for customer needs and wants without any human capital at all.

Because of the power of automation and the rise of bots, it is now possible and practical for companies to make service delivery front and center. And this is not just for service delivery for external customers. It is an equally important KPI to deliver an awesome service desk experience for internal customers too. Productivity improvements with a great service desk experience for an enterprise translates to happier employees which translates to better products and services delivered timely and cost effectively to external customers.

It is now possible to scale a business without having to scale spending on human capital. Thanks to platforms like ServiceNow, SalesForce and others who are making programmable systems of records easy to deploy with software as a service. The race is on for a holistic platform play that can cater to the breadth of the enterprise needs – be it internal or external use cases.

It is not enough to be just a system of record anymore. To achieve exponential growth, these systems of records need to deliver great service experiences by adopting powerful systems of engagement. All indications we have seen point to the platform with the best engagement solution – one that can power service delivery without having to deploy proportional human capital, will eventually be the market leader.The irony today is that for every $1 spent on a platform license for systems of records, enterprises are spending $5 to manage and operate these systems using human capital.

Software and automation are excellent ways to expedite your operations, but if you have to pay five times as much to run those platforms, are you really transforming your operations?

Which is where service “bots” have a huge potential. The ability to engage and automate service delivery for internal and external customer so that you can reduce service outages, manage sales ops, automate customer engagement, streamline order management, automate the approval process, automate IT operations, and all this at a fraction of the cost of how it was done in the past. Replace expensive and proprietary hardware solutions with SaaS and divert a big fraction of the engagements to service bots instead of handling it all with expensive human capital.

The ServiceNow Knowledge 17 Conference happening next week in Orlando will be a great opportunity to learn more about service automation and deploying effective customer service strategies.

Software is indeed eating the customer service world. It is just the first course though!

 

Sources:

1. 30, 2016 Sam Milbrath | June. “13 Stunning Stats on Customer Experience (including the $1.6 Trillion Cost of Bad Service).” Vision Critical. N.p., 30 June 2016. Web. 04 May 2017.
2. “Self-Service: Do Customers Want to Help Themselves? (infographic).” Zendesk. N.p., n.d. Web. 04 May 2017.
3. “10 Key Call Center Statistics | 2014 Benchmark.” MetricNet Performance Benchmarking. MetricNet, 21 Oct. 2015. Web. 19 Dec. 2016.- Https://www.metricnet.com/author/jrumburg/.