The customer experience (CX) has entered a new normal in this post-pandemic time where things have been shaken up and reinvented. Not to mention the fact that all generations of consumers have very different expectations.
Let me explain. Consumers from different generations have different identities that factor into their buying practices and expectations. Each generation has a distinct value set and criteria that inform buying decisions, brand affinity and communication preferences. In the blink of an eye, the next generation of consumers has come to age, Generation Z has surpassed Millennials as the youngest and most influential consumer demographic that has begun compelling brands to reconsider their customer experience strategies in order to remain relevant.
Gen Z is the first generation not to experience life without a smartphone. This means they were exposed to digital ads, social networks, and mobile everything from the earliest parts of their youth. They were practically born with a mobile device in hand. Buying practices are heavily influenced by their peers, what’s trending on social media, and what is perceived as ethical. They view purchasing as an expression and extension of their identity. Ethical concerns are the highest priority when deciding which business they patronize and they value a customer experience that is digital-first, responsive, empowering, and transparent.
I spoke with Chris Johnson, CEO of Experience Dynamic, Leah Leachman, Director Analyst for Marketers at Gartner, and Dipanjan Chatterjee, Vice President and Principal Analyst at Forrester, in order to understand how brands and businesses need to rethink the customer experience —especially through the eyes of Gen Z.
I began by inquiring how brands should strategize and think about their customer journey when looking at the Gen Z demographic.
“The incoming generation often drives change, and older generations adapt accordingly. As smartphone natives, Gen Z has distinct expectations, having always experienced the conveniences that other generations have grown to enjoy. Our study revealed that Gen Z is notably less satisfied with current customer experiences, with just 50% satisfaction compared to 71-72% for previous generations. This highlights the need to better understand and address Gen Z’s unique needs to close the satisfaction gap and enhance their experiences,” said Chris Johnson.
For further perspective, Leah Leachman had this to say: “Whatever generation you belong to is only part of the puzzle. So it’s really important that brands use that information along with other important contexts like customer research and data. Otherwise, you risk some over-generalizations. We do see some important generalizations in the Gen Z generation that I think is important to pay attention to. And one of the things that we find in our Gartner analysis on Gen Z is that they are more likely to turn to third-party resources or sources like TikTok or YouTube to solve an issue or consult with first versus over a brand’s direct website itself.”
Leah also continued. “We’re also seeing emerging values for Gen Z as well. One of the interesting things is that they’re savvy at manipulating and conditioning algorithms to dictate their lives online. So it’s not just for better personalization, but they’re also wrestling the control away of platforms that are trying to collect their information. So the values we see have been rising more than perhaps other consumers in different generations are like purpose, control, and individuality.”
“Most, including Gen Z, are coming out of the pandemic with a heightened appreciation for hybrid, digital, and physical experiences. Brands need to recalibrate their CX accordingly,” said Dipanjan Chatterjee.
With these perspectives, it’s evident that this digital transformation is forcing brands to change their business models and adapt to the new market reality. What’s interesting about this is that it’s not the brands that are driving this change. Instead, this change is being driven by the customer–all due in part to Gen Z.
All this change can only mean that there are challenges that brands will now face. So what kind of struggle are they now being faced presented when looking at the overall customer experience?
“There are a couple of things. One thing that is really important for brands to consider is that your CX delivery doesn’t always align with brand trust. But on the flip side, when brands focus on something a little bit different than they normally have, they’re generally focused on what customers think of them versus supporting what customers think of themselves. And that’s really what moves customers. What we found is that 15% of audiences don’t report a strong commitment to a familiar brand. So that’s a big untapped opportunity because a strong brand commitment means a high brand connection, preference, advocacy and willingness to pay more or a premium for a brand. But those experiences are few and far between. We found that there are these specific types of experiences in Gartner research that are more unique; they’re emotional, they have a personal impact on customers’ lives and that specific type of experience has double the impact on brand commitment. So it’s really about how you can help a customer reflect on themselves, have more confidence in themselves, and meet those objectives and needs,” Leachman said.
There’s a gap that brands need to make up and that gap is what Gen Z expects and what everyone else is seeing. Brands have a lot of work to do in figuring out what specifically we need to do to make that gap up in expectations. Specifically, for Gen Z, we found that their needs are more emotional in nature,” chimed in Johnson.
“Because of this, brands must figure out where these emotional needs live within the customer experience. As a result, brands must adapt to their needs and provide them with a digital-first customer experience that identifies opportunities to pepper in a personal touch. In our research, we found that 53% of Gen Z say an interaction/experience that leaves them feeling worse causes them to remember a bad experience. On the flipside, Gen Z is more forgiving after a bad experience as compared to older generations. They’re willing to give companies 2.6 chances to make up for a bad experience as opposed to the 1.1 chances that Boomers are willing to give. It’s safe to say that the younger generation is giving customer experience leaders a greater chance to get it right and make it right,” Johnson explained further.
“Customer experience is critical to companies because brand preferences and brand asset value are shaped by brand perception, which in turn reflects the accumulation of experiences that the customer has with the brand,” Chatterjee said.
Finally, I asked, what does the future of CX look like, and what will be the best practices to put in place?
Leachman said, “Brands need to rethink their thinking about the future. They must also harness the new innovations that can enhance and transform CX in meaningful ways. As a result, we’ll see progressive organizations really think about investing in fundamental customer experience competencies like customer journey mapping and seeing that tie between commercial value and long-term value. It’s looking at and creating different operating models that bring together teams that have classically stayed in their own swim lanes. I think when you have those silos, you may have teams that say they’re customer-centric, but they’re delivering a different version of CX, and that leads to a very poorly coordinated and inconsistent experience.
That said, I love technology, and there’s a lot of future in the digital aspect of the customer experience. But without consistent investment in some of those core capabilities, we’re just going to keep spinning our wheels and staying in the same place.”
“In marketing, our primary objective is to set accurate expectations and consistently deliver on the promises we make, as this is essential for securing repeat customers and fostering brand loyalty. Our national study found that 85% of consumers are willing to switch from well-established brands to newer, challenger brands if they’re provided with a superior experience. Additionally, we found that 76% of customers would recommend a brand that offers an exceptional digital experience. Therefore, it’s crucial for us to ensure our marketing strategies are in sync with the experiences we can genuinely offer, and by doing so, we can not only attract new customers but also cultivate long-term success and growth for our brand,” Johnson concluded.
Gen Z is a goldmine of possibilities. Their growing influence on each other and the generations before and after represent both a challenge and an opportunity for brands to adapt their customer experience. They demand a seamless cross-channel experience, expect companies to align with and speak on the issues that matter to them, and are fiercely loyal to the brands that win them over. As Gen Z brings new challenges to perfecting the customer experience, there is no question that the time is now to mold your business to the new wave of customer experience.