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Engaging with ‘Generation Y’ as future loyal business
July 12th, 2010 Stephen Boyce Tags: Changing Customer, Connected World, generation y
Posted in Firm of the Future, Strategy & Innovation, Trends |
It is often felt that – Generation Y (born early 80s - mid 90s) - ‘are less loyal than their predecessors’. As a consequence there is ‘doubt about the long term ROI that focusing on this target group for new business will bring’ (sic). I disagree with this sentiment, which leads me to question Gen Y as the ‘Me’ generation. In this article I look at Gen Y from the perspective of a generation that has access to more information and thus more choices before making decisions about ‘loyalty’ than ever before.
Gen Y are potentially as loyal as any generation that has preceded them. There are distinct generational differences however. With the advent of the internet Gen Y has wider access to knowledge/information. The nature and sources of information has changed – the first port of call no longer being parents, (to a lesser extent ‘the establishment’ – government, church, media, and press) and acceptance of their world view (most notable since the 60s). Essentially Gen Y has the ability to question more than their predecessors, and undertake a different thought process as to whom they trust as a result.
A trap easily fallen into is to view Gen Y as an age range. Age is not necessarily the best guideline to capture a target audience. Increasingly society takes into account differences between biological and mental age. Old heads on young shoulders, and vice versa; William Hague, who in his teens was tipped as a future leader of the Conservative party due to his recognised level of maturity, being a good case in point. I would advocate the use of age range as merely a rough guide as opposed to a definitive one. The determination of mental age by asking a series of questions (on a web site or via questionnaires) to typify an individual’s ‘mental’ age would be a useful exercise to determine whether an organisation has ‘tailored’ their offerings precisely and successfully.
An additional contextual factor is Social Networking, which as a relatively recent ‘phenomenon’ helps characterise Gen Y. The Internet, email, IM, and texting being primary means of communication for Gen Y. Interestingly the facility to become a member of a social network is juxtaposed with Gen Y’s wish to be seen as an individual. As I mentioned earlier members of Gen Y are often seen as the ‘Me’ generation. I believe there is a business/promotional Gen Y opportunity to provide greater ‘personalisation’ around ‘tailored information’ regarding career plans/planning, Innovation, Entrepreneurship, etc.
I dare suggest that for organisations Gen Y personalisation around tailored information from initial contact will gain insight into underlying ‘loyalty’ factors; and moreover how to address the question of – how do we make the ‘Me’ generation work for ‘Us’?
We are all concerned with what the future may hold employment and lifestyle wise. The relatively recent downturn of employment opportunities and negative economic trends engender particular concerns for Gen Y. The future has a greater level of uncertainty than ever before. An organisation, which tasks itself to addressing not only present but also anticipating future needs, will have a greater chance of successfully retaining Gen Y as long-term customers.
The future is the future – to what extent can it be anticipated? This is a particularly tricky question for organisations who wish to use potential ‘leading edge’ technologies. To what extent can an organisation, especially IT companies, be proactive as opposed to being reactive in the use of technologies for a specific market segment, such as Gen Y? My answer is to find ways to respond to the challenge of accurately gauging timing of entry. But when is the right time for a technology (preferably as an enabler) targeted at Gen Y to enter the market?
Companies need to gauge entry into a market by investing more time in indentifying trend makers/trendsetters among Gen Y as a target group. An additional consideration for entry into a market which can be assessed in conjunction with the aforementioned is ‘time lag’.
I will now clarify what I mean by ‘time lag’. All too often trends that end up as mainstream are adopted (note not necessarily started) by trend makers. Once adopted there is a period when only those ‘in the know’ will adhere to the new trend or new behaviours. There is a ‘time lag’ between early adoption and mainstream acceptance. The Internet is a prime example, the military and the scientific community being early adopters, and trendsetters (even if they did not view themselves as such). They were the first members of the (Internet) community in the know. The rest is history. It should be noted that trend makers may be communities as well as individuals. The business community adopted the mobile phone well before it gained wider social acceptance; once again, the rest is history. Currently Gen Y are active participants of social networking sites such as Facebook, Twitter et al – Companies should use the intervening period, namely, ‘time lag’ to determine what trendsetters are seeking next, and therein lies a key indicator to revealing a forthcoming new market opportunity.
In addition to the above, I have come up with several suggestions which can be promoted/sponsored by an organisation aimed specifically at engaging Gen Y as targets for new business loyalty.
In summary, the ideas are as follows:
- Develop a business specific site, portal and/or knowledge base highlighting cultural differences in organisations across the world. (options to be discussed) that can be organically grown by Gen Y as a target group. (along the lines of Wikipedia).
- Arouse curiosity in targeted group by use of acronyms without explanation. The idea being the use of acronyms on pages Gen Y are likely to access where an individual has to search for the explanation of the acronym. (As a fan of Stargate Universe (Sky TV), the constant mention of FTL without explanation was driving me to distraction. My curiosity led me to Google the acronym).
- Create a company sponsored GREENLIGHT Project. The idea is to encourage Gen Y to submit ideas that address ‘Green issues’ in the business environment. The aim is to engage Gen Y directly as problem solvers, and to position an organisation in Gen Y minds as leading edge in the Green IT space. Either teams or an individual (in respective categories) can submit ideas. The prize winning idea(s) will be ‘Greenlighted’, namely adopted as a real working solution for the business and/or as an offering to clients.
Generation Y today have more choices and more options prior to making decisions than their predecessors. Technologies are adopted as being ‘transparent’ to Gen Y end users at faster rates. With a view to maximising Gen Y loyalty benefits, it is up to companies and organisations to understand the changing technological landscape and the ‘loyalty’ and ‘trust’ contexts for Gen Y decision making. Moreover, there is the need for companies and organisations that target Generation Y to use various feedback mechanisms to ensure that messages are clearly understood, and believed.
Stephen Boyce
I am currently a Senior Consultant with the Atos Origin; Business Consulting - Information Security & Compliance UK Team. I have over 10 years experience in the I.T. industry specialising in security matters since 2000 after gaining an MSc in Information Security from Royal Holloway, University of London. Prior to joining Atos Origin in 2008 my previous experience in Information Security has been gained working for Cap Gemini, Deloitte Consulting, and EDS. During the past 10 years, I have worked on a variety of public and private sector projects including international assignments often multi-tasking. I am focused on extending my talents :-) by contributing to blogs, and writing ‘Thought Leadership’ articles based on my ‘Cup of Coffee’ principle. My ‘Cup of Coffee’ principle was derived after a discussion with my Head of Practice, Mr Gavin Kenny. Gavin advised me to think about blog/article content in relation to the reader being able to digest my offerings in the time it takes to drink a cup of coffee. Bearing the aforementioned in mind please put my ‘cup of coffee’ principle to the test and I welcome your feedback on this aspect as well as comments on blog/article content. Non coffee drinkers please note that alternative beverages are equally acceptable.
Hi Stephen.
A very interesting article. I look at Gen Y through the eyes of my daughter. They are more willing to try something new regardless of whether it has been proven or is tried & tested. Their “network” is worldwide from a young age and they see no need for barriers to prevent them communicating with friends using any form of communications – day or night. I do think they are very loyal but you have to gain their loyalty more some then the older generation !! However, they vote with their feet much quicker than the previous generation.
So what needs to be done ?
The use of technology has to be smart, efficient and quick and ideally mutli-purposed. It must work first time or they’ll find another solution that does work. It must adapt as new facilities or methods become available and the bluring between the business & personal world will get more pronounced.
I do feel that they will be a harder client to please going forward as their technology expectations are greater: and there lies the challenge.
Hi Colin,
It will be interesting to see if there will be a “blurring between the business & personal world” as you state in your comments above. In particular how recruitment professionals and employers deal with harnessing Gen Y values and ethics in the workplace, because as you say Gen Y may be a harder client/employee to please.
The strength of this debate highlights for me the very real problem of different generations not understanding each other. With lifespans and retirement ages increasing this could potentially become a major problem in the workplace.
What does this mean for the CTO/CIO? The CIO/CTO must cater for a wider audience from a generational perspective, both internally and from a customer perspective. Those audiences will have different needs, different capabilities, different technologies that they use. The CIO/CTO may themselves not understand the different perspectives and must think about how they are going to gain that insight that they need.
Add to that globalisation, different societies and cultures etc. The task of the CIO/CTO gets ever more complex … how do they ensure that they first understand the different demographics that they must serve and further how do they manage the diversity of needs that must be catered for?
Hi Alison,
In response to you highlighting the issue of – different generations not understanding each other. I believe there is an opportunity for an organisations leadership and the CIO/CTO (since you mention them specifically) to encourage cross-generational teams to work on key issues and projects. In addition I believe that Gen Y ers who are new to a business/organsiation would benefit from coaching and mentoring; equally important however, is reverse mentoring where an organisation can get Generation Y ideas and input on critical issues in the business.
Hi Stephen
Your article is thought provoking in many ways and would require a leghty response to deal adequately with the many points of views expressed there in. So I will avoid that temptation.
Generation Y as you call them are a very mobile, and sheep like group that are influenced not by their own research but by what is put infront of them by very manipulative marketing companies. They follow trends that are set by others and originate nothing new but improve on that which had already been created by their predecessors.
Their role modles are celebrities and it is the images of success and popularity that attracts them to products and not the mere usefulness of the item. Their use of IM and other real time technology was stimulated by the fact that their idols were using the very medium.
Introduce a new product, no matter how unimportant it is, and hand it to a celebrity to use, then photograph the celebrity using the product. The next day generation Y would be asking for it in the shops. Generation Y is motivated by the ‘I want it now’ factor and as such are more at risk of debts. On the whole they are not as independent as they should be and rely on their parents and credit to help them to live the hype.
They feel the need to conform to trends for fear of redicule , bullying or rejection from their peers. They are more likely to change their equipment because a newer version is on the marker rather than because it is no longer working thus reducing the shelf life the product. This is a good thing for companies and product developers for obvious reasons.
Economics.
Regards
Hi Trevor,
In your response you focus on the social aspects of Gen Y and I welcome this as a widening of the debate. I am sure that there are others who will wish to comment on this viewpoint.
Hi Trevor
While some of your points do hold true for some of Gen Y, in my opinion it isn’t a Gen Y trend…
I think most generations have a bulk of people who follow th cult of celebrity. The reason that it seems like a Gen Y fashion with technology could be that they are the ones most immersed in new technology and so they are the ones who appear to follow celebrity techno trends. If you were to look at, for example, clothing fashion, I think the same pattern of following celebrities would be seen across most generations.
Your point about ‘improve on that which had already been created by their predecessors’ I think is a historic fact as apposed to a Gen Y generalisation. Newton built on axioms proposed by Greek mathematicians. Einstein used experiments by Maxwell to know that he could measure the effect of nonzero size atoms for his Thermodynamics papers. Something about Standing on the shoulders of giants I think?
Finally, manipulative marketing companies have quite an influence but the great expanse of knowledge available (I’ll admit web-based knowledge, rarely printed word or ‘elders’) from sites and their huge use of forums and online discussions mean that they may not physically go out and try 20 different pairs of headphones (another example) but they build on experiences of others from around the world (from reviews etc.). This may not be everyone’s idea of ‘research’ but it is definitely not just following marketing companies and from my experience it yeilds much better results than a lot of ‘traditional research’.
Don’t get me wrong, I agree that marketing companies do influence the habits of people and products are deliberately made to look ‘uncool’ in order for companies to push the newest model (please see Simon Elliotts article on the Hidden Cost of Planned Obsolescence http://blog.atos.net/2010/02/the-hidden-cost-of-planned-obsolescence/), but from my perspective I don’t see the trends you outlined at Gen Y specific… More a product of modern day capitalism
Hi Stephen,
Very good artical and being a social worker surprisingly I found your points very interesting. You talk about GenY’s loyalty/non loyalty to companies. There is a distinct Generation Y in my area of work where I have also found that it is not a question of if they are loyal but a question of that particular age group being more informed and aware of ever growing and faster changes. For example, 25 years ago when I started work as a social worker I did my job unquestionably and did not mind what resources was given to do this. But somewhere along the line (I’m not sure when) this new breed came along which I now recognise as Gen Z, GenY and what ever else Gen there is.
I was quite happy with the OLD way but it was this lot that wanted the changes. They wanted computers that you only had to blow on to switch it on, and god forbid if it took longer than three seconds for a page to come up. I understand that it was my generation (not me) that may have made all this new technology but it was and is the Gen Z GenY group that has defined it and in my opinion made it their own and just when it’s on it’s way out (which doesn’t take long) they throw it back at us.
So in the light of your article I do not feel that Gen Y are not loyal, they are just faster, more informed and do not settle for they lot in life they are hungry and for ever wanting more.
I feel it is the companies/organisations that need to be loyal to this group as they are the definers, so it’s for you the employers to keep up and recognise what is in front of you.
Regards
Sylvia
Hi Sylvia,
It has been remiss of me not to respond sooner. The point raised that …….”companies/organisations need to be loyal to Gen Y as they are the definers,” leads me to comment that organisatins will need to be paying even more attention to how they lead motivate and engage the Gen Y group who may be critical for the successful organisation of the future.
Thanks for your feedback
Regards
Stephen
FTL! FTL! i’ve just caught up on two episodes and it (Stargate Universe) still annoys me as much as entertains me but come on…, FTL is obvious from the myriad of other scifi i’ve watched over the years!
Seriously though, i’d like to pick up on your Greenlight idea. Only today, I sat in on a client meeting with a bunch of our guys doing just that, filtering a bunch of ideas that the collaborative team had created over the previous time period to determine what may or may not be a goer. Or indeed, the recently launched Fish innovation scheme internally to the business. Which leads me to my point – for me, the indicator of Gen Y is the increased tendency towards collaboration and individual entrepreneuralism. Capturing that, harnessing it and turning into value for both the individual and the business is the key for me to success in years to come.
Hi Rob,
Thank you for your comments. I regard the use of three such ordinary words as Faster Than Light to make up an acronym in a Sci-fi program as cheating. No ‘Hyper’ ‘Drive’ ‘Positron’ or ‘Warp’. What lack of imagination even if FTL had been used elsewhere.
Changing tack, I believe the Greenlight idea to be one that can be implemented with little intial outlay to gain traction to capture collaboration and individual entrepreneuralism energies of Gen Y as highlighted in your comments.
Regards
Stephen
While I agree with both your points personally (FTL is a little obvious sorry Stephen) the ultimate in Gen Y collaboration and individual entrepeneuralism (did you make that word up??) is Apples App store, which depending on what you read was a series of happy coincidences and or business genius – it has however created a new market place is this a business model that can be adopted into other markets?
Hi Steve,
This is an interesting article. One for you to think about – with the advent of ‘web based’ information and more web based access points being created in our lives generally – I am questioning more fundamentally whether the notion of a ‘Generation Y’ itself still stands as as concept? Consumerism now definitely begins in teen years (always has but teens seem to get the jump on technology often much more than parents) – and unfortunately I’m too old to be considered part of that generation however my need for and use of technology will not diminish as I get older but likely increase so in essence, age groups as well as nationalities and socio-economic groups are being lumped together – making a ‘technological’ generation rather than a age based?
I welcome your thoughts on this.
Regards,
Mark
Hello Mark,
My thoughts as requested. In response to your fundamental question of ….whether the notion of a ‘Generation Y’ itself still stands as as concept? I believe the answer to be YES for the following reasons. Already there are articles on the Internet discussing not only ‘Generation Y’ but also ‘Generation Z’ in relation to their future importance. Generation Z (born after 2002) are regarded as the ‘New Kids on the Virtual Block’. Sociologists, and social marketers in particular monitor closely what contributions young adults have made or will make in transforming social norms as they mature into adulthood. As such there is a tendency to determine a construct that conveniently encapsulates what ‘youg adults’ represent in any given era. For example the term ‘baby boomers’ and ‘Generation X’ are now common terms used to immediately differentiate the lifestyles, cultural, and social attitudes of past teenage generations. I therefore see the notion of Baby Boomers, Gen X, Gen Y, Gen Z et al as useful and relevant social constructs that aid historical understanding of age based activities at specific times as societies evolve.
I agree with your comment that we are entering into ‘technological’ generation. But take issue with your premise that …..”in essence, age groups as well as nationalities and socio-economic groups are being lumped together – making a ‘technological’ generation” I argue that our ‘technological’ generation has distinct traits led by the specific behaviours of Generation Y, and ‘Generation Z’ – who btw will be the first generation to have never known life without the Internet.
HI Steve,
Thanks for the response – my thoughts in questioning the use of ‘generations’ to define a target market from a market/entrepreneurial perspective in the future is that from a commercial point of view – will there be any difference between Generations Y and Z, aside from the life choices that they make? Looking at the advent of mobile phones, and in fact, computers themselves – the target markets have widened beyond Generation X, Y or a particular generation, having univeral appeal in the case of phones, moving towards universal necessity in the case of computers. The trick is that both have become multi-function devices which allows for a wider/universal appeal.
I agree that social constructs still exists however within the context of being successful entrepreneurs and gaining loyalty, I question the extent to which we can take commercial advantage of such constructs moving forward as the internet is a great leveller, has opened up markets and eroded at those constructs – my locality, the costs, my parents and friends choices, which may be defined as ‘loyalty’ as a major factors behind our choices…such as ‘I can only shop for heavy goods in my locality’, which no longer applies,
Technology has to a degree, eroded those social contructs limiting our choice as consumers which is why we may have to expand our definition of ‘generations’ as a reference point?
Another question for consideration is – to what extent do future trends have to be ancipated or (looking back at inventions such as the motor car) do we need to come up with a trendsetting device, service etc…?
Regards,
Mark
Interestingly I know more and more people who now take into account and factor in international exchange rates when shopping online – something that was unheard of years ago.
Hi Mark,
I’m answering your question does ‘Gen Y’ still stands as a concept? My answer is that it is not a concept at all I believe as the artical above has stated that it is a construct because there has and always will be a younger generation a Y or Z has been tagged on as just a term.
Also I don’t think it is a questeion of ‘the use of tecnology’ dimishing as one gets older but a question of not needing to use it as much because surely you will be following the sun and doing nothing on the beach all day.
Regards
Sylvia
Hi Stephen
Good article, and as a member of Gen Y (apparently) I would tend to agree with some of your points. I feel that in many respects I can be loyal to comapnies or brands but many of us can be mis-labelled as less loyal just because we are more informed, and following a brand or company blindly is not a lack of loyalty…
However, I disagree with your second point about acronyms. Personally, I hate acronyms and seeing a document or webpage full of acronyms which aren’t explained would (usually) make me switch off; either because I feel left out, like I didn’t belong to the target group of the text or because I simply couldn’t be bothered (Gen Y for you!)
This isn’t always true but the case you have described is relevent because you were already a fan of Stargate Universe. If I was new to a program, a brand, a company etc and acronyms were constantly used, for me at least, this would not encourage me to find out more or grow loyalty.
Thanks again for your article.
Points taken. The use of acronyms produces wide ranging reactions; my point is to try to get a reaction to their use. I hope that for every person who would automatically like to see an acronym accompanied with an explanation, there are individuals who would react to an acronym without explanation with some curosity. As a direct result of your I would feel left out comment, I now feel that an acronym with an embedded link to a full explanation would be a good option particularly for Gen Yers new to a website/webpage. Thanks for the feedback.
I think that is a great idea, as it would encourage me to click through. Also, by including the link it acknowledges that not all target readers will be aware of what the acronym means which then address my ‘feeling left out’ issue
Hi Nathan,
I agree I absolutely HATE acronyms. Like you I simply could not be bothered, I was never any good at languages and it is like another language to me in which I do not know or belong to. If a company, brand Et cetera cannot explain it then they should write it in properly.
Regards
Sylvia