Next Generation Customer Experience:

the Death of the Digital Divide

Publicis Media Research, for Oracle

How baby boomers learnt to demand the same high levels of experience as Millennials, what we can expect from tomorrow’s consumer — and how to survive the transition.

In this report

  1. Executive summary: 7 key findings on changing expectations of CX
  2. Why companies should fear the 96% The era of high expectations
  3. Bullet train CX Fast, smooth end-to-end journeys
  4. Knowing me, knowing you Made to measure CX
  5. Some sectors are better than others How does your industry meet customer expectations?
  6. The coming machine superintelligence VR, AR, AI and chatbots

Introduction

Mapping the journey

The inexorable rise of the customers

The biggest challenge faced by customer experience (CX) professionals today is the changing and increasingly high expectations faced by their frontline staff. A new generation of customers expect instant solutions, 24/7 availability, digital and mobile access, flexibility and efficiency. Regardless of what you sell, you’re selling an experience.

That’s more than building an app, great web usability or fluid point-of-sale systems. The single view of the customer built by smart businesses is now portable and ubiquitous, from the armchair to the shopping aisle.

What can we expect from tomorrow’s consumer? And how to survive the transition?

To find out more, we surveyed more than 7,000 consumers in the UK, Germany, France, Spain, Sweden, Poland and South Africa – spread across the generations, from Millennials to Baby Boomers. We found a fascinating convergence between young digital natives and an increasingly tech-savvy older generation that will shape customer experience for decades to come.

Executive summary

The Next Generation

... and what they tell us about where your older customers are headed

Businesses that think solely in terms of generational divide risk missing universal shifts in customer expectations. Digital natives are not a different species – they are pathfinders showing brands how expectations are changing for their entire market.

People no longer buy products. Increasingly, they buy experiences. That’s one of the findings of our survey of more than 7,000 consumers designed to reveal how they buy, why and what brands can do to meet their expectations. Your customer service isn’t just competing against your immediate sector rivals’ - you’re fighting for a share of wallet against the experiences people can have with other brands. They expect the same great experience in healthcare, for example, as they have had with Amazon or Starbucks.

Customer loyalty? Today, it’s how your brands express their loyalty to your consumers, not the other way around. That’s hugely visible among Millennials – but evident across other customer demographics, too.

These findings reinforce some established trends in customer experience. Today, an omni-channel approach to customer journeys is essential. And having a unified understanding of the customer across all touchpoints is becoming a mere hygiene factor, rather than a point of differentiation.

In this world, a superb product is simply the price of admission. Brand differentiation, healthy margins and customer engagement can only be achieved by building on a 360-degree understanding of consumers to deliver an exceptional experience.

And it’s only through digital transformation that brands can deliver on this rapidly evolving expectation. What delights the Millennial consumer today might be the price of admission for Generation X or even Baby Boomers tomorrow. Only organisations building a flexible digital infrastructure will be able to adapt fast enough.

Seven surveys take-aways

  1. Millennials are less different to older age groups than many think. Familiarity with technology makes them quicker to adopt new channels and devices. But the older generation are now extremely comfortable shopping, interacting and, crucially, complaining through digital channels.
  2. Simplicity is key. Millennials want multiple touchpoints in the customer journey to make anytime interactions easier; older age groups want seamless integration of human and machine.
  3. Trustworthy, fast responses define good customer experience for everyone.
  4. Customers vanish after bad experiences. Dissatisfied Millennials are less likely to communicate with a brand, making it harder to repair a relationship.
  5. Online sources help Millennials and older customers decide on products. But Millennials are more likely to be skeptical about the information they see.
  6. Virtual reality is welcomed - and not exclusively by Millennials. Using VR says a brand is innovative and adaptable - and many older customers are open to it.
  7. The human touch is still important. The older audience are keen to have person-to-person interactions over technology, though far from exclusively; Millennials want the best of both worlds - whatever is the least hassle.

The critical question, however, is: “how do we connect with our customers?” Our research shows that for all age-groups, there is no single answer. For the digital natives, always-on, omni-channel touchpoints are important. But while older customers still value the human touch more highly, many now look to web, apps and even breakthrough tech such as chatbots and virtual reality as key components of their customer experience.

The cost of failing – being slow, unresponsive, unavailable or incapable of adaptation – is brutal. Customers today have higher expectations. And when disappointed or frustrated, they leave. (In the case of the Millennials, they don’t even bother to say “goodbye”...).

Companies that understand this diversity of need and are able to both exploit and connect together all the channels customers inhabit will succeed. They must empower their people, flex their underlying business model and truly understand their customers to win.

Or perhaps we should say: the customer has won. How will we transform to win alongside them?

  1. Fear the 96%

    the era of high expectations

    The stakes have got higher. Our survey shows 96% of customers will take an action that hurts your profits as a result of a single bad experience. They expect speed, responsiveness and access via a variety of channels.

    How do you react after a bad customer experience?

    93%will take one or more actions that harm the brand.
    4%do nothing.
    1. 70
    2. 60
    3. 50
    4. 40
    5. 30
    6. 20
    7. 10
    8. 0
    • Not purchase with the company/move to another company
    • Write a complaint to the company via email or letter
    • Phone the company to complain
    • Speak to family/ friends face to face
    • Write a review on a third party website/ forum
    • Complain to the company on their social media account
    • Speak to family/friends via other communication format e.g. text, phone call, email
    • Post something to your social media account about a company
    • I do nothing
    If you have a bad customer experience which of the following would you be likely to do? Base: all respondents n=7,068, 18-34 n=2,241, 35-54 n=2,455, 55+ n=2,372

    There is no “either/or” in today’s consumer environment. The results from our survey offer no reassurances to businesses that are either totally digital, or resolutely offline and human.

    Targeting Millennials?

    While they’re much more likely to be heavy internet users, and 60% self-identify as “digital masters”, nearly half of them told us that “regardless of developments in technology, I would always choose to speak to a human.”

    What about brands targeting older customers?

    Yes, they love the human factor – two-thirds of them say they want to be in touch with another person when they need help from a company. But then, 65% would be happy to use technology rather than humans when getting a quote for a new product, for example.

    Look at Twitter - a social network where nearly half of active users are over 30. Its own CX research last year showed that 71% of users expect a brand to respond to their query within an hour of tweeting – and 96% who’d had a friendly customer service experience with a brand on the network would buy from them again.

    The generation gap?

    Shared assumptions

    (Out of ten)
    Value trustworthiness
    Value a quick response
    Value an informative responsive
    18-34 55+

    Thinking about customer experience please rank the following elements of customer experience in order of importance to you when you are seeking help from a brand. Base: all respondents n=7,068

    The big differences

    Mobile as main gateway
    Regardless of tech, chooses human if possible
    Using VR to visualise products
    18-34 55+

    Please read through the following statements and tell us how much you agree or disagree with them, where 1 is strongly disagree and 5 is strongly agree. Base: all respondents n=7,068

    The need for speed

    Customer expectations are clearly rising. They want to interact with brands when, where and how they choose. A decade ago we might have assumed that millennials expected quicker service than baby boomers. Today, we can see from the survey that speed, trustworthiness and clarity is equally valued among all consumers. All that shifts the balance between different channels.

    trustworthiness and clarity is equally valued among all consumers

    That means having systems that facilitate faster, more decisive interactions with human operators. It’s about deploying automated systems and computerised forms of interaction that get closer to the innate understanding customers want.

    The reason for this change is all around us. These new customer expectations are in part driven by developments in consumer technology. The ubiquity of digital assistants such as Apple’s Siri, Google Assistant and Amazon’s Alexa has shown people they can ask detailed, natural questions and expect an accurate answer; they know it’s possible to get a reaction that’s at least part human, whether it’s a machine with a human voice or a person manifesting digitally.

    Keep it simple

    (even if it's complicated)

    The evidence from our survey is clear: despite the need to offer seamless customer experience across different channels, this isn’t a cry for complexity. Customers want simplicity.

    In our survey, 73% agreed that “I would rather have a few solutions for contacting a company rather than lots which don’t work properly.” Millennials are more likely to be always-on and using the internet across multiple touch points. So to them, having a number of solutions for interacting with a brand is also important: 59% of them agreed that “computers are allowing problems to be solved far quicker.” Simply put, while older customers typically see talking to a human as a bit more important, and younger customers prioritise convenience, there is no gulf in their broad perceptions. Good CX has to address the broad spread of expectations across channels.

    In short...

    Expectations have changed across the spectrum. Customers are more aware now than ever of what they want and how they want it. They “get” the customer journey – and they have control, with much of it taking place outside a brand’s control. And the only place to find answers about those expectations is in the data.

  2. Bullet-train CX

    fast, smooth, end-to-end journeys

    It’s no longer a product. It’s not even a service. Today, brands can maximise their impact by creating an experience that begins well before sale and endures long after.

    We see it in even the most mundane products: customers want to research them in detail; feel good about their purchase; maximise their usage; and dovetail their buy to their wider lifestyle.

    They’re increasingly conscious of the process of validating their decision, the smoothness of the transaction, the immediacy of service. They judge a product on peer review, then rate the delivery, the packaging, the unboxing. And if they’re unsatisfied? Often, they’ll simply seek out a better experience in a totally different sphere... because today, it’s easy to do so.

    And as with so many other findings, the lesson from our survey is that while Millennials are leading the way in expecting excellence through the customer journey, older generations are not far behind.

    The baby boomers have closed the gap

    How do you rate yourself as a user of technology?

    • Basic digital
    • Rookie digital
    • Rational digital
    • Pro digital
    • Digital master
    • None of these
    18-34
    2 1 7 25 59 6
    35-54
    1 1 12 27 54 5
    55+
    1 1 21 30 43 4

    That means a disjointed or fragmented customer experience is dangerous for any business. Customers of all ages want an end-to-end journey that requires minimal interventions and maximum convenience. Brands that can be a bullet-train – smooth, fast and comfortable – in CX will win.

    Millennials, as early adopters, show the way. Their tendency to switch between multiple devices at speed highlights the importance of a sleek customer experience which delivers a consistent experience between touchpoints – that provides meaningful engagements from every screen. Yet the same digital transformation that underpins these splintered journeys also act as a foundation for GenX and Baby Boomer customers with their own multi-channel needs.

    How human agents fit into that technology is crucial. All age groups have similar perceptions of face-to-face interactions – seeing them as easy, personal, trusted and informative. And there was general agreement between ages on perceptions of a company’s own website: if it’s no good, their CX takes a nose-dive.

    But Millennial audiences are more comfortable with the third-party digital channels, such as online external sources and social media. More comfortable – but also a little more cynical. They have more sophisticated filters; a nose for ‘fake news’.

    So how else does the journey break down?

    We asked the respondents to tell us the biggest frustrations they had with companies at the different journey stages, covering everything from lack of seamless connection across channels, to poorly targeted marketing.

    Challenges across the user journey

    Stage 1
    Research
    Top frustrations:
    • 50%
      Incomplete website
    • 41%
      Visualising the product when buying online
    • 35%
      No nearby store
    • 32%
      Not being able to speak to someone
    Stage 2
    Buying
    Top frustrations:
    • 38%
      Visualising the product when buying online
    • 37%
      Unsatisfactory products
    • 37%
      No nearby store
    • 35%
      Incomplete website
    Stage 3
    Post-purchase
    Top frustrations:
    • 47%
      Lack of ownership of customer’s issues
    • 45%
      Waiting on hold to speak to someone
    • 41%
      Not being able to contact the company when I want
    • 39%
      Being targeted with irrelevant marketing
    Percentage of users citing as a top 5 complaint at each stage of the user journey

    Blended interactions

    This blended approach was confirmed when we asked customers what channels had been important to them in making purchases. Broadly speaking, the web is key to research; face-to-face grows in importance in buying; the email and phone rise up the rankings after sale.

    And while there was a Millennial effect – social media, for example, was more marked as a purchase information source for the 18-34s – the basic pattern applies across age groups. None of the 14 channels we suggested was totally irrelevant.

    So there’s no escape. Whether they’re young or older, brands need a consistent, portable, rich view of customers. This makes a compelling case for digital transformation. Only businesses capable of underpinning multiple sources with consistent, timely messages and transaction methods can hope to appeal across age ranges and journey phases.

    The generation gap

    Journey stage

    Research
    Buying
    After-sales

    The big differences

    (18-34 vs. 55+)
    Missing the human touch
    Unable to speak to company
    Waiting on hold

    18-3455+ Percentage of users citing as a top 5 complaint

  3. Knowing me, knowing you

    made-to-measure CX

    Knowing who the customer is and what they need is a cornerstone of good CX. But the smartest businesses ensure the personal touch is consistent online and off. Context is everything.

    Brands that pay attention to their customers’ unique attributes, choices and behaviours stand a better chance of engaging with them and meeting their expectations quickly and seamlessly. That matters, whether it’s how you market to them; design products and services to fill their needs; or engage with them before, during and after sale.

    Generational differences are evident here, but they are much less marked than many assume. And that simply reinforces the point: you can’t tell how to interact with someone by grouping them demographically or geographically – only by tailoring the experience to their priors and preferences as individuals.

    Personalised vs. Personal

    One of the key features of digital and a good CX is personalisation. Adtech, for example, means brands can follow customers around their browsing and devices, targeting them with messages tailored to their unique profile.These systems remain relatively crude. And even for businesses addressing spot needs through the customer journey, there is a risk that personalisation crosses the so-called “creepy line”.

    Our research suggests that rather than trying to be overly proactive with interactions unique to individual customers, brands might yield better results simply by being personal – friendly, available and human. “Human” in this context could refer to any sufficiently advanced chatbot or other online service.

    The checklist is simple:

    • Do you know who I am?
    • Do you know what I want?
    • Will you make it easy for me to do business with you?
    • Can you treat me well regardless of where I am, how I contact you and what stage of my customer journey I’m at?

    In other words, brands must hold up their end of the personal data bargain. For millennials in particular, the trade-off is clear: collect and use my data, but don’t sell it off or abuse it. Use it for a purpose: making my engagement with you better.

    And the precursor to that, of course, is having the right infrastructure to both safeguard and responsibly exploit that data in the first place.

    Questions of culture

    But a personal touch isn’t just great technology. When we asked respondents to rate aspects of customer experience, “the company knowing it is me without having to ask” scored an average of 5.3 out of ten and “personalised experience” just 6.4. Having a “human experience” rated much higher, at 7.1 – and “politeness” 8.1.

    (Among Millennials, the average “politeness” score was 8.5, compared to just 7.8 for the over-55s. This is a genteel generation, it seems.)

    This suggests that while brands need to offer a consistent approach across channels, it’s also important that those interactions are culturally attuned to the needs of the individual. That must be aligned. Fast-paced systems that recognise and respond proactively to customers will be let down if human operators or more innovative tech (such as chatbots) fail to live up to the experience.

    That means having more empowered employees whose culture is one of optimising the customer’s outcomes, not just selling to them or looking for ways to minimise costs. The right attitudes – perhaps, even, driven by the expectations created by smarter CX systems – will drive better behaviours and deliver the right result.

    If that’s defined as better site traffic or higher margins, brands will create perverse incentives for employees. We’re already seeing CX-focused businesses like MetroBank eliminate financially focused targets for bonuses, in favour of CX-based metrics such as Net Promoter Score. They get it: every personal interaction with a customer, digitally or otherwise, builds long-term value.

    The generation gap

    Thinking about customer experience please rank the following elements of customer experience in order of importance to you when you are seeking help from a brand.

    Shared priorities

    (Average marks out of 10)
    Trustworthy
    (9.1)
    Quick to respond
    (9.1)
    A human experience
    (7.1)

    The big differences

    (18-34 vs. 55+)
    Customer service professional
    (7.8 vs 8.6)
    24-hour service
    (7.1 vs 6.1)
    Politeness
    (8.5 vs 7.8)

  4. Some sectors are better than others on CX:

    How does your industry meet customer expectations?

    Customers are getting spoiled by the sectors outperforming on CX. Companies that can learn from adjacent sectors aren’t just in a position to leapfrog their own rivals – they’re heading off a massive competitive risk as sectors collide and new rivals emerge.

    Which sectors are leading the way in Digital Customer Experience

    • Digital players
      Online stores
      Gambling
      Telecoms
    • In transition
      Travel
      Hospitality
      Financial Services
      Utilities
    • Rooted in reality
      Home/DIY
      Grocery
      Fashion
      Automotive

    Consumers’ personal technology is now so advanced, and the user experience so well designed, that their expectations on how technology should function in the workplace and at a customer touchpoint are raised.

    They also see the way technology is reshaping some sectors – retail, for example – and wonder why they’re not getting the same treatment from their healthcare provider. They know that their streaming video service responds to the wealth of data it has on them. So why can’t their utilities provider offer the same proactivity?

    CX is one of the defining battlefields in the coming war of sector convergence – and we have the data on who’s winning.

    The digital players

    We asked consumers to tell us their key sources of information from different types of brand. For online stores and gambling and in the telecoms sector, there was an obvious bias to digital interactions.

    What’s more surprising is that the over-55 group were much more likely to cite websites, email and mobile phones as key sources for these businesses. This confirms our central assumption that digital isn’t the issue. Among Millennials, social media, video sites and chat apps took up the slack.

    The messages here? Brands’ investment in digital is never wasted. For great customer experience, the key is to provide a seamless experience across these apps and platforms. The digital natives might be diversifying their interactions more quickly – but older customers are still digital.

    Top sources of information

    Millennials
    • 43%
      Website
    • 42%
      Face-to-face
      instore
    • 39%
      Email
    • 15%
      Video chat
    • 18%
      Text chat
    • 19%
      Virtual reality

    In transition

    What about the sectors that aren’t pure-play digital, but seem to be transforming? Here, we found a similar story. Travel, hospitality, financial services and utilities have all shifted decisively to the digital customer interaction across age ranges, and with a similar pattern – seeing Millennials diluting mainstream channels such as email, web and phone with newer touchpoints.

    Note that all these sectors are primarily information-based. For most of these brands, customer experience expectations are being set by the very best that digital-first sectors are offering – not what their own industry defines as good CX. That puts them at risk of losing out if they cannot compete on agility, flexibility, personalisation and speed.

    Rooted in reality

    The third category is businesses where – for now – some kind of “real life” interaction is inevitable. These include home/DIY, grocery, fashion and vehicles. It’s here that the over-55s, in particular, value face-to-face interactions – and across age groups, it’s in these categories that “unsatisfactory products” are most likely to be cited as a top frustration around customer experience.

    But even in these categories, there is already digital disruption – online ordering for home delivery, for example, and virtual tours of major purchases like fashion items and cars. It’s here that the Millennials show some of the biggest differences with older customers.

    The top routes for interactions – face-to-face, website and email – are all there, but fewer Millennials report them in the top slots. And three times as many cite video chat as a preferred source of interaction – with similar gaps for VR and social media. In other words, brands that currently rely on face-to-face might soon rue lack of adaptation to a more coherent digital strategy.

    The generation gap

    Shared priorities

    (Average marks)
    Get the web site right
    Product still matters
    Speed and responsiveness

    The big differences

    (18-34 vs. 55+)
    YouTube, video chat and VR 2x-3x more popular for Millennials
    Website No.1 for fewer Millennials in fewer categories
    Human interaction needs: it’s financial services for Millennials; grocery, fashion and vehicles for over-55s

  5. The coming machine superintelligence:

    VR, AR, AI and chatbots

    Yes, it’s hype. Virtual and augmented reality remain crude. AI and chatbots are under powered. But... that’s all changing fast.

    This year Apple announced ARkit – a development platform to turn the iPhone into a mass-market augmented reality (AR) device. Virtual reality (VR) devices are becoming affordable – and the software development costs are plummeting too. And machine learning means artificial intelligences (AI) are getting exponentially smarter as they start to follow our every word at home and work. Even chatbots are now making their way into sophisticated healthcare environments.

    Millennials see possibilities in these technologies – but the boomers are excited too.

    Millennial vs Boomers: digital divide?

    Please choose which activities you would like to be able to do online at home and which you would like to travel instore and meet someone in person?

    Try on clothes
    Have help from a brand expert
    Medical consultation
    View a house

    At home virtually

    In store/ in real life

    MillennialsBoomers

    Chatbots

    Apple’s Siri, Google Assistant and Amazon’s Alexa are changing customer perceptions of automated response systems. The AIs underpinning them are scratching the surface right now (how often have you heard Siri reply, “Here’s what I found on the web” to even relatively mundane questions?). But as they get smarter – and more trusted by consumers – ensuring they can deliver information and execute actions will be critical for businesses.

    That does not mean investment in existing chatbot technologies has been wasted. But crude automation will increasingly start to look dated – to younger people whose expectations have been raised, and among older consumers, who show much higher desire for a more human experience. (In other words: the 55+ customer will typically shun a crude chatbot, but might welcome one with more naturalistic responses.)

    Nevertheless, our research showed little difference in the customer experience or the perception of brands when respondents were told that an interaction they were shown was either a chatbot or a human operator. In both cases, the Millennials reported higher overall satisfaction levels in using the on-screen chat than older consumers.They are, after all, the texting generation.

    What mattered, we discovered, is that customers feel they’re getting an instant interaction where they feel in control and that adapts to their needs. And that’s where the coming together of engaging digital assistants; flexibility in the means of interaction; and the smartness of the AI holds out a lot of promise.

    In parallel to the fast-learning chatbots, then, businesses need to build out a digital infrastructure that allows smarter AIs to execute increasingly complex functions at will. There will come a tipping point when an automated system interacts extremely well with customers – but, without redesigned digital foundations, it risks becoming a virtual version of the hapless human call-centre operative unable to solve problems for irate customers.

    VR: youth in the vanguard

    “How important do you think it will be for companies to offer virtual reality interactions in the near future?”

    A simple question – with a clear answer: 54% of Millennials reckon it will be, with only 9% rating it unimportant.

    But as we see throughout the consumer survey, the idea that older people are a lost cause on innovative technology is simply wrong. Only 20% of the over-55s rated VR unimportant for brands – and among the Generation X 35 to 54 age range, sentiment was almost identical to the younger cohort.

    Education is the key. While 56% of Millennials are familiar with VR applications, only 22% of over-55s are. When they’re shown, they like it – 39% would be willing to use it in a customer interaction.

    Yes, among Millennials that’s much higher, at 69%. But when we asked respondents to tell us which activities they would be happy to do digitally at home rather than travelling to a store, we discovered some categories where the older customer is more likely to say “yes” (see graphic).

    The message for brands is simple. To be seen as innovative and adaptable, these technologies are increasingly a must-have for Millennials. But digital transformation is also unavoidable. All that’s stopping older customers from engaging on these platforms is familiarity. A little education and some decent user experience design, and all the benefits in CX terms from these approaches will apply across the board.

    The generation gap

    New Technology

    Virtual Reality
    Chatbot

    Shared Priorities

    Shows a company is innovative
    Shows a company is innovative

    The big differences (18-34 vs. 55+)

    Willingness to try
    (69% vs 39%)
    Provides good customer experience
    (63% vs 45%)

  6. Build your Next Steps

    Use this checklist to build your action plan. As you select each item, they will build into a comprehensive set of next steps for you.

    Responding to the era of high expectations - what are your major challenges:

    1. The converging expectations of older and younger customers

      • Expect that all your customers will research online.
      • Don’t dismiss social media as a CX area for older customers.
      • Give people the human option at all stages of their journey.

    2. Bullet train CX – fast, smooth responses

      • Systems that facilitate faster, more decisive interactions with human operators.
      • Digital processes that have an innate understanding of what customers want.

    3. Focusing on simplicity

      • Build a consistent experience across physical and digital contact points.
      • Create an end to end journey that requires minimal interventions and maximum convenience.

    4. Prepare for the next generation of technology

      • Chatbots supported seamlessly by human expertise.
      • Initial steps into VR experiences where appropriate.
      • See if ARKit offers options for your business.
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