Understanding the Customer Experience Reactions of Millennials

Does the Behaviour of Millennials Differ to Their Older Peers?

AE Quarterly March 2018

It seems like today everyone is focused on Millennial customers (born 1980 – 1996), believing that they are somehow different from the generations that came before them, particularly when it comes to their behaviour when faced with excellent and poor customer experiences. In 2015, Antilles Economics and Blueprint Creative embarked on a study to understand how Barbadian customers reacted to positive and negative customer experiences as well as generally what they looked for when choosing the companies and brands they transacted with. Using the data from this online study of 403 customers, we can compare the preferences and behavioural patterns of Millennials with those of Generation Xers (born 1965 to 1979) and Baby Boomers (born 1946 to 1964). Since the data was collected online, it largely reflects the characteristics of the typical online population.

When we analysed this data by age, we discovered that Millennials looked for the same basic attributes in the companies and brands they did business with as older generations, and they are no more or less sensitive to a brand’s reputation. Where they differ is that they complain less, are more willing to pay extra for excellent service, switch brands faster and are more likely to share their experiences, both good and bad, with others.

 

Millennials Are Just Like Everyone Else

Let’s start by understanding the areas that are the same from one generation to another.

The priority attributes for Millennials when choosing which company/brand to do business with are the same as for older generations

When asked to rank a list of attributes in terms of their importance when deciding which brand/company to do business with, the results are fairly consistent across generations. Regardless of age, customers generally indicated that they valued the ability to self-serve, comfortable environs and availability and/or ease of parking, above knowledge and friendliness of staff, location of company, speed of delivery of products/services and the price of the product/service.

 

Millennials are just as likely to switch to a brand with a reputation for excellent customer service as older generations

Our findings indicate that millennials are just as swayed by reputations for excellent customer service as their older peers, with 83.8% admitting that they have switched brands in the past for this reason, only marginally higher than the 80.0% of Generation Xers and 81.3% of Baby Boomers who had done the same.

 

Millennials Are Not Like Everyone Else

Now we move on to the areas where the behaviour of Millennials was notably different from older generations.

While all generations admit to being lured by excellent customer service, Millennials are quicker to stop doing business with companies/brands that provided poor customer service

After just one negative experience, almost 60% of millennials had decided to stop doing business with the company/brand in question, compared to less than half of Generation Xers and Baby Boomers. Furthermore, almost every millennial in the sample admitted to not purchasing a product/service they had intended to purchase because of a negative customer experience. Though high, the corresponding proportions for Generation Xers and Baby Boomers are lower.

 

Millennials are less likely to formally complain to the offending company following a negative experience than their older peers

Interestingly, the results show that millennials are actually less likely to complain than Generation Xers: 16.0% of Millennials stated that they have never complained, which is double the corresponding proportion of Generation Xers. Even when we consider the proportions that complained most of the time and some of the time, Millennials still trail their Generation X counterparts by more than 10 percentage points (53.9% compared to 67.3% of Generation Xers). The cohort that is the least likely to complain is Baby Boomers, with one in every three persons of this generation admitting that they have never complained.

 

Millennials may not be complaining to the offending companies/brands, but they are telling their family and friends about their experiences (both good and bad), particularly on social media and through instant messaging platforms

All three generations in the study share their positive experiences with friends and colleagues; but Millennials are more likely to share their negative experiences than Generation Xers and Baby Boomers. One in every five Millennials have told others about negative experiences compared to one in every seven Generation Xers and one in every eight Baby Boomers. The proportions of Millennials that have turned to social media and/or instant messaging services to share their experiences are notably higher than for Generation Xers, but somewhat similar to Baby Boomers.

 

Millennials are more willing to pay extra to ensure superior customer service than older generations

When asked whether they were willing to pay higher prices to guarantee superior service, one in three millennials said ‘yes’ compared to one in five Generation Xers and one in six Baby Boomers. Furthermore, Millennials were willing to pay on average 22.3% more, while the premiums Generation Xers and Baby Boomers were willing to pay were lower at 15.9% and 18.3%, respectively.

 

What next?

Millennials may be searching for the same attributes in companies/brands as previous generations, but they are more sensitive to the quality of their interactions with these companies/brands. Millennials are less likely to tolerate poor customer experiences and more likely to pay to ensure excellent customer experiences. Unfortunately, because Millennials are also less likely to complain, when companies deliver poor experiences, Millennials probably won’t tell them. They will, however, tell everyone else in their immediate circle as well as ventilate both good and bad experiences online through social media.

 

Staying close to Millennial customers can no longer be achieved simply through the provision of a physical suggestion box placed within the company’s store or branch. Even being active on social media is no guarantee that Millennial customers will share their experiences with the relevant companies/brands. Companies seeking to meet the customer experience expectations of Millennials have to get proactive and broaden their ongoing ‘tracking’ tools to include: offering a greater variety of ways for customers to engage with the company (for example, website chats, social media platforms, call centres, frontline staff and instant messaging services); monitoring churn rates and investigating the reasons why customers leave; social media listening beyond the company’s branded pages; directly seeking feedback through interviews and focus groups; and, engaging customer-facing teams to solicit their views from the frontlines. Millennial customers will not seek you out to tell you what you’re doing right or wrong, so you have to seek them out instead.

About the author(s)

Stacia Howard is the Managing Director of Antilles Economics.

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