Generation V will be a tough customer

20 Feb 2008

Digital natives of all ages who form part of Generation V (for Virtual) will prove a tougher market to penetrate for businesses used to marketing on the basis of customer identification – and firms that fail to please should fear the wrath of the digital mob.

According to analyst firm Gartner, unlike previous generations, Generation V is not defined by age — or gender, social demographic or geography — but is based on demonstrated achievement, accomplishments and an increasing preference for the use of digital media channels to discover information, build knowledge and share insights.

Generation V, Adam Sarner principal analyst at Gartner says, is the recognition that general behaviour, attitudes and interests are starting to blend together in an online environment.

This will throw up fresh challenges to companies who use CRM systems and who currently target customers based on metrics like geography, age, gender and social demographic.

“Conventional wisdom has focused on customer identification as the foundation for one-to-one marketing campaigns,” said Sarner.

“The reality of Generation V creating anonymous online personas and the sheer power of their growing influence in an online environment, means companies must change their methods of acquisition and relationship building.

“CRM-focused companies and particularly their marketing departments must take notice of this change and engage with online personas,” Sarner said.

“Businesses need to adapt and attune to the needs of Generation V, or face the wrath of ‘virtual mobs’ and a mass exodus. Going forward, customers’ true identities will have less importance and instead companies will need to understand the role or persona that customers are playing at any given time and treat them accordingly.”

But could this mean befriending on Facebook, capturing territory on MySpace or keeping up with the Beboers? The answer is using new technology tools to engage in a more subtle and clever way with the virtual mobs.

Gartner said that providers of third-party customer data, business intelligence and analytic tools will shift toward consumer applications and eventually arm companies with automated, artificial intelligence and self-learning ‘persona bots’ to seek customers’ needs and desires.

Savvy marketers may need to focus on social sciences, anthropology and game design – skills that will attract, connect with, contribute to and gain insight into online personas and virtual environments.

CRM-focused companies will need to move away from product-based segmentation towards wants-based segmentation. Virtual worlds like Second Life already provide sandbox scenarios where multiple personas can explore wants and desires that companies are attempting to fulfil.

The rise of the virtual machines – as in persona bots – will also present some interesting opportunities and challenges.

Persona bots are automated, personality-infused, self-replicating, virtual representatives that will be used as a tool to facilitate life events in an online environment.

Gartner predicts that by 2017 the persona bot will be mass-adopted, with more than 20 million active persona bots in the US alone.

To fully engage with Generation V, companies will have their own automated bots for critical relationship handling, such as sales, customer service and marketing. Key drivers, such as 24/7 presence and the capability to communicate domain expertise, will help customers navigate their way toward purchases.

By John Kennedy