The digital customer - not a matter of generations?
In an article on the digital customer experience I briefly mentioned how the availability of digital channels and tools has become a criterion for many customers to pick a company. Today's "digital customer" simply wants to be able to interact, act and transact across digital and social platforms when and where it suits best.
You've heard it all before. But is it really true and who is that so-called "digital customer" anyway? In this blog let's take a look at how the availability of digital channels has become a decision factor in choosing businesses (in this case insurance providers) and why behavior and context trump generations when it boils down to the digital customer.
Note: with the digital customer we simply mean those customers that use digital channels and platforms far more than others. In reality, there is no digital customer, just a customer who doesn't care about channels and labels.
Behavior, preferences and context over age?
Accenture research (end 2014) shows that 53% of insurance customers claim they would not recommend their insurers to friends and family if they did not have the ability to use digital channels to interact with these insurers. Moreover, 44% claims they would switch to another insurer if they could not use these channels. There is your digital customer.
Now, let's take a look at him a bit more in depth. The traditional belief is that the digital customer is the digital native. And all those generations (we have many names for them) that "live" digital tools and channels, are even "born" with them. Those generations that challenge the status quo and love "disruptive" technologies or business models.
However, that's a very dangerous assumption. Here's a small personal example: one of the most avid fans of that so-called disruptive digital-first "sharing economy" taxi company (can you call it that?), Uber, I know is a CEO, way in his fifties. Is he an exception?
Accenture's research (focused on consumer insurance) includes all generations. Sure there must be differences confirming the generational assumption? There are indeed. In the age group of 18 to 24, for instance (register for free to explore the data), 25% wants to use digital channels to submit an insurance claim (the so-called first notice of loss), one of the many "moments of truth" in the insurance customer life cycle. Another 30% wants to use digital channels to check the status of their claims. In "older" age groups these percentages gradually drop.
Generational gaps, as far as we can generalize them, tend to narrow as digital tools, technologies and so on get more widely accepted, forcing us to believe the digital customer is really all of us.
However, here is another finding: phoning the good old call center (or contact center as we call it nowadays) is still the most important channel to, for instance submit a claim, also in the age group of 18-24. And the difference between age groups preferring the call center is not THAT big: 30% in the age group of 18-24 and 41% in the age group of 55-64.
Obviously you can't compare an insurance claims process with, let's say, buying a book on Amazon. So, the preferred channels differ, depending on - again - the context. But, still, the differences between generations are not that big as many would assume.
Digital customer experience is everyone's business - the problem with generations
So, is this really a generational thing? Is the digital customer/consumer the younger customer/customer? Let's not forget 3 things:
- Absolute age numbers are meaningless when it boils down to business impact. Take the earlier mentioned CEO. What is the impact on the local taxi industry if he tells all his employees to use Uber, as compared to one individual from a younger age group?
- We have always seen that younger generations in general tend to adopt specific digital channels and technologies somewhat faster. It's been like that since research firms started tracking who uses this every day thing called the Internet. And after a while the generational gaps always become smaller.
- We also have always seen that there is not necessarily a link between being a first-mover regarding adoption and age. And this is far more important than the previous point that's too broad and in reality is most valid regarding technologies and platforms that "appeal to younger generations". An example: the first people to use Twitter had a very specific profile that was less age-related than it was related with job function, behavior and more.
And there is more, showing the importance of context. It's not because "older generations" use digital channels less than "younger generations" in the example of the insurance claims process that they do not want to use them.
The key role of context
Context indeed matters. Nearing my fifties, I can tell you that the only reasons I don't use websites or social or text messages to check my insurance claims process are because 1) I never had to and 2) I've been with the same insurance company for ages. The day I have to face choices, like young consumers do, I will most certainly look at the options to interact and follow up, maybe even switching carriers afterwards.
And guess what: that's exactly what Accenture found as well: the customer experience regarding the claims process matters (predominantly in an end-to-end sense) but the very fact of being reminded we are insured when confronted with an incident, regardless of how well the resulting claim is followed up, directly leads to switching insurance carriers. I quote: "the survey also reveals that customers who have submitted an insurance claim in the past two years are almost twice as likely to switch insurers in the next 12 months compared to those who have not submitted a claim: 41 percent compared to 22 percent".
These considerations, along with the fact that generational gaps, as far as we can generalize them, tend to narrow as digital tools, technologies and so on get more widely accepted, force us to believe the digital customer is really all of us.
This is even more the case if we look at more contextual parameters as I'll do in follow-up blog posts.