While 88 percent of Gen Z consumers are loyal to five or fewer companies in total, nearly a third (31 percent) have become loyal to a new company in the past year, new research from cloud contact firm Talkdesk reveals. As their buying power grows, this presents both an opportunity—and major challenge—for brands to win with these coveted consumers, according to the firm’s latest research report, Winning Gen Z Through Exceptional Customer Service.
“Consumers of all ages consider themselves to be loyal to only a few companies. This is even more so with the case for younger consumers who are establishing their own brand loyalties,” said David Gardner, vice president of research and insights at Talkdesk, in a news release. “Locking in loyalty requires investment. Our research shows that companies must be aware of the impact constant digital engagement has on their approach to customer engagement and service when looking to win with Gen Z.”
According to the research, two things are critical to develop and maintain Gen Z loyalty:
- Allowing them to easily and conveniently resolve their service issues, and
- Speaking to their concerns and priorities beyond the context of customer service alone.
The Talkdesk research also finds that Gen Z’s changing preferences for developing relationships and engaging with brands puts a greater imperative on organizations to have an authentic and cohesive omnichannel support strategy. Gen Zs put little premeditated thought into channel preference and expect to be able to engage wherever they are to get what they need.
When it comes to providing convenience for consumers to connect with brands to resolve issues, CX leaders need to think beyond channel siloes. Omnichannel engagement, intelligent self-service, and agent enablement increasingly form the fundamental basis of building and maintaining consumer relationships with Gen Z. Less than a quarter (24 percent) of Gen Zers prefer to use the phone for customer service, compared with 40 percent of Gen Xers and 56 percent of Boomers.
“Gen Z consumers are open to engaging with companies through a broad variety of different service channels and are more likely to have engaged with AI-enabled channels, like virtual chat or voice support, as well as through social media,” said Gardner. “Customer loyalty will be built and solidified by the brands that are thoughtful in their deployment of omnichannel capabilities.”
Strategic deployment of AI to resolve table stakes issues is critical as younger consumers prioritize expediency and convenience. A majority (78 percent) of Gen Z consumers have reached out to and engaged with virtual chat automated with AI, as opposed to only 38 percent of Boomers.
Beyond the convenience of digital experience alone, Gen Z is more likely to take into account a company’s messaging and communication around issues that matter to them. In fact, 46 percent of Gen Z consumers stopped buying from a company in the past year due to its stance on social issues, compared with only 22 percent of Boomers. This presents an imperative for brands to enable their customer support agents to understand and align with the company’s core values.
This report is based primarily on a quantitative online survey of consumers fielded in October 2021. The sample includes 12 different global markets including: U.S. and Canada (North America); Australia and New Zealand (Asia-Pacific); France, Germany, Italy, Spain, and the U.K. (Europe); Mexico, Brazil, and Argentina (Latin America). Survey results were bolstered with qualitative interviews with customer service/CX leaders at major consumer companies and consultancies with a global presence.