There is hardly any industry immune to changing customer behaviours. Numerous events have influenced the way consumers interact with brands throughout time – gone are the days when the product was the only important aspect for customers.
Having been born into a digitally connected world, individuals aged 18-24, also known as Gen Z, have taken digital customer behaviours to a new level. Around ten years ago, Millennials began to pave the way for digital transformation, but Gen Z has considerably raised the bar for organisations looking to meet consumer expectations.
With Generation Z entering the workforce and becoming full-fledged consumers, brands have seen a significant change in how their customers want to interact with them, making loyalty all the more complex to secure.
Understanding new preferences
The latest Talkdesk Research report, entitled Winning Gen Z Through Exceptional Customer Service sheds insight into Gen Z customer behaviours, highlighting the differences in engagement of this young population. Gen Z carefully chooses their favourite brands, yet, their trust and loyalty can take a sudden turn with the smallest inconvenience.
With 86% of customers, regardless of generation, saying they are loyal to five or fewer brands, maintaining customer loyalty has become a challenge for many companies. Gen Z is even more selective in brands, with 88% of them being loyal to five or fewer brands. However, compared to other generations, Gen Z consumers are more likely to have become loyal to a new company in the past year.
While Gen Z consumers present an opportunity to build new relationships, they have high standards that must be met. Gen Z seems to be less forgiving of brands’ mistakes, with a majority surveyed saying that they have stopped working with a brand in the past year due to an instance of poor customer service.
Discussing the opportunities and risks of this age group, Antonio Gonzalez, the Senior Manager for Industries Research & Insights at Talkdesk, says:
“Consumers in general have a fixed perspective on their universe of companies they trust and work with. However, I think younger generations are still in a process of learning and discovery, and as they get older, they find what they like and are willing to stick with that.”
Of course, the amount of information Gen Z has at their disposal influences the frequent shift in their consumer preferences. Gonzalez continues:
“There’s also a certain element of the fact that Millennials and Gen Z are more engaged with information or more comfortable seeking out and learning about services and companies on their own. As a result, they are still considering and evaluating new companies. The downside to this may be that their expectations are increasing because of the comparisons that they’re actively doing while considering new companies.”
Convenience their way
Two things are critical to developing and maintaining loyalty with Gen Z:
- Allow them to resolve their service issues easily and conveniently
- Speak to their interests and priorities beyond the sole context of customer service
Growing up with phones and the internet at their fingertips, Gen Z heavily relies on digital channels for issue resolution or interaction with brands in general. In fact, 85% of Gen Z have chosen to interact with a virtual agent in the past year, while only 24% say they prefer to pick up a phone for customer service.
Compared to 56% of Boomers who would rather chat over the phone, Gen Z leans towards chatbots, social media, text and any other means of digital communication. Commenting on this notable difference, Gonzalez says:
“A lot of people assume that at the end of the day, people want to quickly and easily talk to someone and resolve an issue. For a decade or two, there have been alternative digital channels that you can use to resolve issues, but people perceived them to be pretty simple and eventually they were just going to pick up the phone to solve the problem.”
“In this sense, Gen Z is quite different. Because they have grown up with digital avenues of resolving the issues that they’ve seen have worked in other places, they don’t feel they should just have to pick up the phone and solve an issue.”
Understandably, as AI and automation were present practically since their birth, Gen Z prefers to do things digitally. Companies that want to fulfil Gen Z expectations will need to dedicate time and effort into thoughtful deployment of omnichannel capabilities.
Looking at the broader context
Before the initial contact with a brand, Gen Z consumers will take the time to do their research and educate themselves about brands beyond the information that’s on their websites. This includes reviews about the product and the service, as well as brands’ positions on issues that matter to them. Gen Z consumers are more engaged with brands on social media, and will often use it to raise and resolve service issues. share the often answers to common brands’ questions.
In contrast to older generations like Gen X or Boomers, Gen Z is much more mindful of broader social and political discourse when it comes to choosing brands. Notably, 46% of Gen Z stopped buying from a brand in the past year due to its stance on social issues. To compare this with only 22% of Boomers who did the same, Gen Z is significantly more attentive. Gonzalez explains this in more detail:
“Social media before was more in the realm of the marketing department, but now brands have been getting hard questions from consumers on their social media channels which are in a way considered public places. Often those questions are related to brands’ stances on issues in the public sphere.
“Because of that, agents are expected to have an articulated and consistent response in a point of view that is satisfying to consumers and isn’t necessarily a boilerplate response.”
Agents are now often serving as brand ambassadors and should be equipped with the means to understand a customer’s past interactions with the company, including how they may have engaged with the company on social media.
As Gen Z calibrates their needs and wants with more buying power, the shifts in consumer preferences will continue to develop. Contact centres will need to go beyond their traditional format to accommodate the newest trends in customer behaviour.
Learn more about the Gen Z consumer preferences in Talkdesk’s latest report by clicking here.
