Charting the Path Forward: How Past Benchmark Data Can Shape Your 2025 Customer Conversation Strategies
By Smart Communications
This year’s Benchmark report provides valuable insights into evolving customer expectations, behaviors, and the resulting impact on customer communications and data collection strategies. Using our extensive research, we’ve compared this year’s data with findings from 2023 to uncover notable shifts that organizations need to address to be aware of as you head into the New Year.
As we prepare for 2025, let these YoY trends be a guide in how you can structure your customer communications and data collection efforts to account for the shifts.
Customer Churn & Generational Shifts
Overall Churn: Over 50% of customers across sectors (Financial Services, Healthcare, Insurance) would consider switching companies due to poor communication, a slight increase compared to last year’s 48%.
Generational Trends:
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Millennials: This demographic continues to lead with the highest likelihood to switch due to poor communication. This year, 63% of Millennials stated they would leave, up from 60% last year.
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Gen Z: Showing a more dramatic increase, 50% of Gen Z respondents would leave a company due to poor communication—up from 45% in 2023. This highlights the growing importance of clear, responsive communication for this younger generation.
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Silent Generation: This cohort has remained fairly steady, with 32% indicating they would switch for poor communication (compared to 31% last year), but this remains a much lower figure than younger generations.
Frustrations with Customer Communications: The Gaps Continue
“High Contact Frequency” frustrations have seen slight increases across all sectors, especially in Financial Services (55%, up from 51% last year) and Insurance (54%, up from 52% last year), signaling that customers are feeling more overwhelmed by excessive communication.
“Lack of Sensitivity” remains a prominent issue across Healthcare (58%) and Insurance (62%), with Financial Services seeing a modest uptick (61%, up from 59% last year).
“Irrelevant Messaging” continues to drive frustration, with 56% of customers in Healthcare, 56% in Financial Services, and 55% in Insurance all citing this issue—no major shift across industries from last year, underscoring the ongoing challenge of delivering targeted, meaningful content.
“Channel Preference” remained fairly consistent across all industries, with 49% of Healthcare customers, 51% of Insurance customers, and 52% of Financial Services customers preferring communication on their chosen channels. However, there are minor increases in demand for SMS/Text, with 37% in Healthcare (up from 35%) and 31% in Insurance (up from 27%), reflecting a slight shift toward more immediate, mobile communication.
Difficult Data Collection Processes: Impact on Customer Experience
We took a demographic approach to find out which cohort is most likely to end their interactions with your brand if the way you collect data is cumbersome.
Millennials: This year, 61% of Millennials will abandon a difficult interaction, showing a notable 6% increase from 55% last year.
Gen Z: 48% of Gen Z customers will also abandon interactions due to complex forms, up from 45% last year, continuing a steady increase in expectations for ease and accessibility.
Gen X and Baby Boomers: The abandonment rate for Gen X has risen to 53%, while Baby Boomers are slightly more patient, with 49% reporting abandonment. These numbers are relatively consistent with 2023, where 52% of Gen Xers and 48% of Baby Boomers abandoned due to difficulty.
Channel Preferences: Shifts in Communication
Insurance: 72% of insurance customers prefer email for communications, up only slightly from70% last year. This highlights the ongoing importance of email for clear, documented communication.
Healthcare: In healthcare, 73% prefer email, up slightly from 70% last year, which shows an increasing desire for digital, asynchronous communication in the healthcare sector.
Notably, there has been a slight increase in the preference for text messaging in insurance and healthcare sectors. For insurance, 31% of customers prefer text, compared to 27% last year, and in healthcare, it rose from 35% to 37%.
Financial Services: Email continues to be the dominant communication channel, with 72% of customers preferring this method. This figure is consistent with last year’s preference of 71%, showcasing the sustained importance of email as a clear, formal, and secure mode of communication. Text messaging is also seeing a slight increase, with 31% of customers now preferring SMS communications, compared to 28% in 2023. This change reflects the growing desire for more immediate, concise updates in addition to traditional email communication.
Customer Trust: What Really Matters
Financial Services: When it comes to building trust, 62% of customers cite data security as the top priority, unchanged from last year. However, more customers in 2024 are emphasizing ease of contact (53%) and transparent communications (46%) compared to 50% and 42% in 2023, respectively. This shift highlights a growing demand for clear, accessible, and open communication in the financial services sector.
Insurance: In the insurance industry, data security remains a top concern for 44% of customers, but like financial services, ease of contact (53%) and clear, empathetic communication (40%) have gained more emphasis this year. In 2023, there were fewer customers highlighting these factors as top priorities. The increased focus on ease of contact and empathy this year suggests an evolving expectation for insurance companies to foster a more personal, responsive experience for consumers, in addition to safeguarding their data.
Healthcare: 62% of consumers still rate data security as essential for building trust, showing consistency from last year. However, there is a growing emphasis on transparent communications (53% this year, up from 50% in 2023) and ease of contact (53%, matching last year’s figures). Healthcare consumers are increasingly prioritizing clear and open communication with providers regarding their care, benefits, and billing. The year-over-year rise in emphasis on transparent communications indicates that healthcare consumers are more concerned with having straightforward, accessible information than in previous years.
As AI increasingly plays a part in communications, the need for trust and transparency will inevitably grow.
Regional Trends in Customer Communications
Asia-Pacific continues to lead in potential customer churn, with 56% of customers likely to abandon interactions due to poor communication, slightly up from 54% last year. This highlights the unique challenges facing companies in APAC when it comes to aligning customer expectations with communication strategies.
US and UK potential customer churn rates have remained relatively stable, with 49% of US customers and 46% of UK customers likely to switch for poor communication (compared to 48% and 45% in 2023, respectively).
Conclusion: Informing Your 2025 Customer Communication Strategy
These insights underscore the increasing intolerance of poor communication, particularly among Millennials and Gen Z, who are now key drivers of customer expectations across sectors. Companies that continue to rely on outdated communication practices or fail to address the growing demand for personalized, efficient, and transparent interactions risk falling behind.
For 2025, it will be essential for organizations to not only refine their messaging to meet customer needs but also enhance the overall experience by adopting more streamlined, user-friendly data collection processes and embracing the growing demand for multi-channel communication. With rising expectations for immediacy and relevance—particularly through mobile channels like SMS and text—companies must invest in technologies and platforms that deliver faster, more personalized interactions.
Moreover, the widening gap between how companies perceive their communication effectiveness and how customers perceive it should serve as a wake-up call. In the new year, your organization will need to bridge this gap by actively listening to customer feedback and aligning their communication strategies with evolving expectations.
By incorporating these insights into your strategic planning, you can better position your organization to foster stronger customer relationships, reduce churn, and build the trust that will be paramount in the years to come.
To learn more about how your company can enhance its customer communications strategy and minimize churn, access the full Benchmark Report today.