By Andrea Ayers, president, customer management, Convergys

Despite sweeping advances in communications technology, for centuries the basis of customer service remained the same: One-on-one interaction with a company representative.

Today, a generation of Internet-bred, Wiki-savvy millennials – who happen to control as much as $1 trillion in purchases in the U.S. – are driving the biggest shift in customer service ever.

Nearly one-third of the US population was born in the 80s and 90s, and the members of this boomlet, now in their teens and 20s, use technology to communicate and make buying decisions more than ever before. Our annual customer scorecard research found that millennial consumers are 43 percent more likely to use automated, technology-enabled channels for customer service. Web-portals, instant messaging, company blogs, mobile alerts and automated phone responses are also each important ways for brands to communicate with a majority of millennials.

For businesses, this is reason to rejoice.

The Y-generation’s preference for highly automated communications is more cost-effective and scalable than sponsoring a massive number of one-on-one live agent conversations with customers.

Automated communications and mass-messages transmitted through blogs, podcasts and social media sites also present companies with opportunities to present their customers with unique brand “personalities.” And these tools allow companies to respond in real time to millennials’ requests, a fitting match for the Y-generation’s need for instant response. 

Dude, where’s my customer service?

Gen Y customers present their own challenges and drawbacks as well. While these methods of customer interaction may be more cost-effective for companies, their Y-generation customers also expect genuine personalization. Inadequate efforts often face the wrath of Gen Y’ers, who, our research shows, are not shy about spreading the news of their poor experiences, often through blogs, Tweets, and forums that threaten the company’s online reputation.

The need for live agent assistance won’t disappear. In fact, live agent calls are about to get much more complex.  Gen-Y customers reach out to a live agent only after they have exhausted all self service options, and thus, the call may involve a difficult issue. Meanwhile, the caller will expect a high-level of convenience and personalization at a time where the company’s response is critical to keeping the customer.

A retail client of ours had Gen Y in mind when it set up its customer service operations. This client uses our live agents to handle calls, online chats and email. The company also distributes digital newsletters and has a presence on social media sites for customer contact. For this company, our customer service agents speak with our client’s customers using Generation Y lingo that appeals to the client’s youthful, trendy customer base. This cuts to the essence of good customer service – we need to interact with consumers in the venue, style and personality that is most comfortable and personalized to them to create a connection that fosters brand loyalty.

Historically, personalized customer experiences were the responsibility of sales and support staff who memorized hundreds of customer names just to be able to say “Hi, Jill” to impress her and win her loyalty. But when human interaction is limited and millions of customers are involved, complex technology comes into play.

Customer care goes ultra high-tech

Consider how the web-browser memorizes your usernames and passwords or how some ATMs feature hotkeys to common transactions based on the individual’s usage history. The next-generation will expect us to take these features further.

In the near future, it will be commonplace for digital customer service agents to use voice biometrics to confirm your identity, data intelligence to determine the most likely way to route your call, and sophisticated software that analyzes customer behavior to help companies determine when you may be considering leaving for the competition.

Today, it’s a common complaint that it takes too long to reach a “real person,” but millennials will be happy with a computer that can better serve their needs and – when necessary – automatically offer up a speedy connection to the department the customer needs to reach.

The way companies use technology to deliver solutions to their customers will become even more critical as the Y-generation grows up. The opportunity is there to save money – and win customer loyalty. Are you prepared for it?

Ayers heads customer management at Convergys, (CVG) a Cincinnati-based provider of relationship management resources and technology.