7 Tips for Attracting and Retaining Millennial Customers
How Retail Energy Suppliers Can Appeal to Generation Y
Millennials, born 1982 through 2004, are coming of age in droves – and retail energy suppliers need to take note. Tech-savvy, socially conscious and wary of traditional advertising, today’s 20-somethings require a new kind of marketing and outreach from their energy providers.
While New York City and Los Angeles remain millennial magnets, research shows smaller cities, from Virginia Beach, VA to Riverside, CA, are seeing the greatest relative growth in their 25- to 34-year-old populations.[1]And in Texas, young populations are growing particularly fast in Houston, Austin and San Antonio, the second, third and seventh most popular cities for millennial migration from 2005 to 2015. The state’s millennial population rose by 10 percent from 2010 to 2015.[2],[3]
Now that these young people are buying homes and starting families, competitive energy suppliers in deregulated markets need to hone their appeal. Following are seven strategies for attracting and retaining millennial customers.
- Out with the Old
Magazine ads, direct mail and radio commercials – These outbound marketing tactics have proven their worth, but they won’t work with the younger crowd. According to a 2014 survey, 84 percent of millennials don’t trust traditional advertising.[4]
That’s not to say direct marketing shouldn’t be a part of your overall marketing strategy; just don’t count on it to sway the younger audience. With so much information available online, at their convenience, these ads come across as disruptive and unsolicited.
- Get Social
As ubiquitous as Facebook, Instagram and Twitter are among the 13 to 35 crowd, social media marketing is a must. Having grown up in the age of “likes,” comments and online reviews, millennials prioritize peer-generated social proof over features, benefits and catchy slogans.
Overall, social media influences more than 60 percent of millennials’ buying decisions, and two-thirds of that 60 percent say it’s more credible than television.[5] What’s more, utility companies that have implemented a strong social presence have reduced customer turnover by up to 20 percent.[6]
- Multichannel Communication
Millennials multitask, and you’ll need to engage them through multiple avenues. A Nielsen study found younger TV viewers channel-surf less than their parents and grandparents, but due to their ever-shifting attention, their memorability rates are lower.[7] From Facebook ads to commercials to email blasts, create multiple touchpoints – and make sure your messaging stays consistent.
Likewise, play to their preferences when it comes to sign-up, customer support and bill-pay. Millennials prefer text messaging to other forms of communication, followed (in order) by email, social media, phone calls and in-person appointments.[8] Text-based support – including chat messaging – is a tremendous value-add, and a solid self-help portal will win them over even more than great phone-based service.
- Content is King
In the unpredictable energy industry, it’s tough for energy suppliers to compete on price alone. Fortunately, with millennials, you don’t have to. They’ll compare rates on their own, but what really captures their attention is helpful content.
How can they lower their energy bills? Which payment plan is right for them? How can they interpret their usage data? Answer these kinds of questions through articles, videos and blogs, and you’ll build the trust and credibility necessary to secure millennials’ business for the long haul.
- Stay Transparent
94 percent of consumers are more likely to be loyal to a brand that offers complete transparency, and millennials are setting the trend.[9] In fact, nearly three quarters would pay more for a completely transparent product, and more than half said they’d stay loyal to a transparent company for life.
The takeaway for a competitive retail energy supplier? Make sure your customers fully understand their pricing plans, potential rate changes and billing schedule, and don’t be shy in sending reminders. For a demographic that’s relatively new to paying utility bills, a little extra disclosure goes a long way.
- Make a Deal
Like other demographics, millennials ultimately want to know what’s in it for them. However, the benefits they’re looking for may differ. A J.D. Power study found millennials are more engaged with programs that allow them to take control of their energy usage, so advanced smart metering services are a must.[10] Prepay, flexible billing schedules and pick-your-own pay date options are also a plus, adding value above and beyond a reasonable rate.
Similarly, sign-up incentives will not only help capture millennials’ business, but their peers’, as well. Fee waivers and flyer miles will get you in the door. Exchanging those incentives for likes, follows and other forms of social capital will spread the word and attract more sets of eyes.
- Invest in Technology
How can a competitive retail energy supplier carry out these strategies? The most efficient path is to partner with technology providers that can deliver what millennials want. Myriad tools exist to streamline content marketing, social media posts and e-mail outreach. Likewise, the right billing software makes it easy to offer promotions, variable rates and flexible fee schedules. By investing in these solutions, you can take back-end work off your employees’ plates, freeing up resources for greater customer service and support.
SmartGridCIS offers a comprehensive technology platform that enables retail energy suppliers to attract and retain customers – including millennials. Our consumer-facing applications include a mobile app, self-service portal and a best-in-breed enrollment platform. Instant chat messaging, two-way SMS and outbound auto-dial and other communications features also make it a snap to connect to customers through multiple channels. Additional product features include prepay, true time-of-use billing and the ability for customers to pick their own pay dates – all tremendous value-adds for the millennial audience.
———–
[1] Time, The 25 Cities Where Millennials are Moving. http://time.com/4797956/cities-millennials-moving/.
[2] Census data compiled by Apartment List: https://www.apartmentlist.com/rentonomics/millennial-population-trends/
[3] Texas Comptroller: Millennials – The New Normal. https://comptroller.texas.gov/economy/fiscal-notes/2016/october/millennials.php
[4] The McCarthy Group. Millennials: Trust & Attention Survey, February 2014. https://www.slideshare.net/danielrmccarthy/tmg-millennial-survey-2014-results
[5] Entrepreneur, “10 Tips for Millennial Marketing.” https://www.entrepreneur.com/article/287905
[6] The Wall Street Journal, “Utilities Tap Power of Social Media.” https://www.wsj.com/articles/utilities-tap-power-of-social-media-1379884639?tesla=y
[7] Nielsen, Millennials on Millennials: A Look at Viewing Behavior, Distraction and Social Media Stars. http://www.nielsen.com/us/en/insights/news/2017/millennials-on-millennials-a-look-at-viewing-behavior-distraction-social-media-stars.html
[8] The Center for Generational Kinetics, Marketing & Selling to Millennials. http://genhq.com/marketing-selling-to-millennials-gen-y/
[9] Label Insight, 2016 Transparency ROI Study. https://www.labelinsight.com/Transparency-ROI-Study
[10] J.D. Power 2015 Consumer Engagement Study, http://www.jdpower.com/press-releases/2015-consumer-engagement-study
