Digital natives are no longer children in a world dominated by people over 40. Instead, their preferences are fast becoming the basic expectations of the whole marketplace, and they are catalysts in that change. In the next few years, utility customer satisfaction will rely on digital, multigenerational communications.

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Digital Natives vs Digital ImmigrantsIn his classic, much-cited, two-part article popularizing the terms, “Digital Immigrants, Digital Natives (part 1 and Part II),” educator and author Marc Prensky defined digital natives as, “‘Native speakers’ of the digital language of computers, video games, and the Internet,” they, “have spent their entire lives surrounded by and using computers, video games, digital music players, video cams, cell phones, and all the other toys and tools of the digital age,” and, “Computer games, email, the Internet, cell phones and instant messaging are integral parts of their lives,” (page 1).

In talking about generational cohorts, we are at an interesting inflection point with respect to adoption of new technologies: the attitudes and behaviors of digital natives will soon predominate among utility customers.

Using CDC projections, we can see that, by 2020 digital natives[1] will compose about 42% of people making decisions about utilities.[2] (Despite only accounting for only 22 years out of that 57-year time-span.) Almost to the year, digital natives are Millennials and younger. This currently comprises two of the largest generations in United States history. While few members of Generation Z are utility customers yet, it is important not to disregard them. They matter already for at least two reasons: (1) They prefigure  customer changes in the coming years, and (2) digital natives are influencing the rest of the population, digital immigrants.

Nationwide, Utilities are gaining new, digital native customers at the rate of nearly half a million per year. The CDC projects that the US population age 25-35 in 2020 will be 51.4 million people. In 2016, the most recent year for which data were available, Pew Research estimated that 85% of people age 25-35 had moved out of their parents’ homes. If that percentage holds roughly steady until 2020, 43.7 million young adults will have moved out and become utility customers. That’s roughly 400,000 more than the previous year.

Energy Customer Segmentation

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At the same time, the group of customers most likely to prefer nondigital forms of interaction will be shrinking. Members of The Silent Generation, the last generation research finds likely to prefer paper communications at a significant percentage, will have shrunk by 18% to 22 million, and will be shrinking at a rate over 1.3 million people per year by then. Assuming that the earlier Baby Boomers are the next most likely to prefer paper communications — that group will have also decreased in number somewhat. The earlier of Baby Boomer generation, born 1946 to 1955, will have shrunk by 5% to 33 million, and will be losing close to half a million people per year.

So utilities are gaining digital natives even while the customers who prefer traditional communication in a traditional utility-customer relationship are aging out of the customer population and reaching an age where younger generations are more likely to manage or help them with finances and housing-related matters including utilities.

It’s not as simple as just adding 400,000 per year to the population and subtracting 1.3 million and 500,000 to come up with a yearly rate of shift toward digital native customers because we don’t know what percentage of the older Americans are current utility customers. Some are going to be in situations where they do not have direct control over, or communication with, utilities that they are using.

But even with those adjustments, the final rate is unlikely to give a sufficient sense of the rapidity with which the utility-customer relationship is going to convert to digital interactions.


Digital Immigrants


The ever-youthful Baby Boomers are learning new technologies at an accelerating rate, and it is affecting their behavior as customers. Prensky defined a second group of people. They were not luddites, but they also were not born with pervasive technology at home and school. These, “digital immigrants,” learned technology as adults and they continue learning. They are a growing group of people who are already residential utility customers — and who tend to be decision-makers for businesses, government, nonprofits, and aging family members because of their phases in life and career.

Often their children are teaching them. A recent study on technology use in families found that, “both children and parents reported that children guide their parents how to use digital media, especially for newer media forms such as smartphones, tablets, and apps.” That Pew Research article cited earlier found that young adults are living at home longer. Since they are, these digital native pedagogues are set to continue teaching and influencing their parents into their mid 20s.

Whether digital immigrants have young family members to teach them or not, they continue to learn new technologies and, as they live with them, they emulate digital natives more and more.


The Millennial Mindset


Back in 2001, Prensky wrote that, “As Digital Immigrants learn… to adapt to their environment, they always [keep], to some degree…, their foot in the past.” This is less and less true. Older utility customers are changing fast!

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In a study of over 5,000 people adjusted to represent the U.S. population, Deloitte discovered an “exciting development” in customer behavior. Their analysis, “revealed a rapidly accelerating dynamic,” that they dubbed the Millennial mind-set because of the way, “demographic groups that have displayed historically lower levels of digital influence,” are emulating digital natives and, “embrac[ing]… newer digital features and functions available in the market.” And when they say, “rapidly accelerating,” they aren’t joking. For instance, they found that that compared with other generations, 10% more Millennials used digital in a shopping trip in 2015, but the gap was only 1% in 2016 — the next year!

Millennial Mindset

The Millennial mindset is about more than fashion. Their use of digital while shopping touches on technological literacy and the mobile, social, big-data, customer service (cf. clienteling), expectations that come with it. As Baby Boomers, with their youthful attitudes and any members of Generation X not already , and as more and more digital natives become utility customers, digital engagement is going to be a basic expectation for more and more people of all ages — and a phenomenal opportunity for utility customer satisfaction.


 

Find out how Brilliency can help you improve relationships with your utility customers through powerful energy customer segmentation strategies to reach digital natives and other targeted generational segments:

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[1]
 Defined using Prensky’s article which refers to “college grads.” When the article was published in October 2001 the most recent graduates were born in 1982, but we used 1981 as the starting year because he was speaking of “generations,” was not saying this was the very first year in which digital natives existed, and because it coincides with the beginning of what experts have since defined as the Millennial generation based partly on those differences in technological experience.

[2] In the U.S. in 2020, there will be 99,504,858 people age 18-39 out of 239,254,827 age 18-75 according to CDC projections. Link to the data and tool elsewhere on this page.