Wielding a hefty $150 billion (and growing) in buying power in the U.S. alone, this digitally native, selectively loyal and socially conscious 13-25 year-old consumer segment is rapidly becoming a priority audience for companies and their relationship building efforts.
Gen Z is the first born into a digitally connected world and their maturation into adulthood is bringing to the forefront behaviors and preferences that are reflective of broader ongoing shifts in how consumers want to engage with brands. While Gen Z consumers may be a bit more opinionated than their older peers, their wants and needs are not unique to them.
As Gen Z customers continue to enter the workforce and grow their purchasing power, so too will the influence of their behaviors. Companies who develop a deep understanding of Gen Z behaviors will be well positioned to differentiate in a global market that is increasingly shaped by them. This has significant implications for contact centers, which are rapidly evolving to fill an elevated role in customer experience (CX), loyalty, and retention.
To help arm companies with insights needed to effectively engage Gen Z consumers and create effective CX across most segments, Talkdesk recently surveyed over 5,500 consumers across the globe and across generational cohorts. Below are three key findings and takeaways for companies to help create enduring CX that addresses the needs of Gen Z and consumers more broadly.
It’s Never Too Early to Invest (In Customer Loyalty)
Most consumers consider themselves selectively loyal to only a handful of companies, making it challenging for companies to create loyalty from the ground up when allegiance has already been established. Gen Z is especially selective with their loyalty, with 88% saying they are loyal to five or fewer brands.
While the number of companies receiving their loyalty is small, younger consumers — many of whom are still sorting out what brands align with their values — appear more flexible and dynamic; In the past year, close to one-third of Gen Z and Millennials said that they had become loyal to at least one new company. But this younger cohort is also more likely than other generations to abandon companies; 54% of Gen Z and 56% of Millennials said they have stopped buying from a company due to a single instance of poor customer service.
Takeaways: Gen Z consumers have a higher likelihood of becoming loyal to a new brand, but less patience for poor customer service. Plan your CX initiatives with Gen Z in mind. Allow them to conveniently and easily resolve their service issues while speaking to their interests and priorities beyond the context of customer service alone.
Human-based Support Gives Way to Digital Channels and More Choice
Growing up with smartphones and the internet in the palms of their hands, it should come as little surprise Gen Z customers feel fully empowered and confident in resolving issues without the aid of another human. Less than 1/4 of them say they prefer to use the phone for customer service (for comparison, 56% of Boomers do) and, instead, are likely to engage a broad range of service channels, ideally digital and AI-enabled.
When asked which digital channels they’ve used in the past year to engage with companies, Gen Z held the highest percentage of any generation across the following:
- Virtual agents: 85%
- Virtual chat automated with AI: 78%
- Social media; 76%
- Text message: 76%
- Video chat: 60%
Takeaways: Omnichannel deployment of issue resolution capabilities is crucial for Gen Z. However bringing disparate channels together requires thoughtful internal coordination on desired metrics, outcomes and measurement. Gen Z’s appetite for AI-enabled self-service channels also presents companies with opportunities to reduce the cost of issue resolution and involve Gen Z agents in the identification of the intents and behaviors of their peers. Should companies and contact centers deliver a clunky CX or AI experience, however, Gen Z consumers may be quick to abandon their loyalty.
Consistent Messaging on Social Issues Necessitates Agent Enablement
Being more digitally savvy than prior generations, Gen Z consumers also tend to be more connected to online conversations and aware of companies’ stances on social issues. According to our research, they hold a heightened attentiveness towards companies’ positions within broader political and social discourses, raising the stakes further for companies and the customer support.
Nearly half (46%) of Gen Z respondents said that they stopped buying from a company in the past year due to its stance on social issues, followed by Millennials (44%) and Gen X (35%). Gen Z also values alignment on sustainability; 40% said they’ve stopped buying from a company in the past year due to its stance on sustainability, which only slightly trails Millennials at 42%.
Takeaways: With significant scrutiny by Gen Z on a company’s social and sustainability issues, organizations should make efforts to ensure contact center agents understand their core values and are able to clearly and consistently communicate them. Agents should have visibility into how they are being messaged externally to be able to deliver a consistent message that ultimately leads to a more coherent brand experience.
The youngest Gen Z customers are not far off from joining their slightly older peers in the workforce and adding even more heft to their already strong purchasing power and influencing other generations of consumers who will embrace those of the increasingly powerful Gen Z. The contact center will play a critical role in this in-progress shift, bringing it out of its traditional role as a cost center and elevating it to a central piece of all customer growth strategies.