7 Leadership capabilities to retain Gen Z customers

Whether it’s their penchant for social media or their demands for efficiency and ease, there’s something different about the customer experiences (CX) generation Z demands.

So compelling are the trends, that recently, consultant, former university instructor and author Jeofrey Bean published a book – his third about customer experience leadership –  that outlines seven CX capabilities that companies need to bake into their leadership in order to attract and retain Gen Z’s customers.

The book is called Next Generation Customer Experience: How Companies Like ServiceNow, Netflix and Intuit are Creating Next-Generation CX Now and the seven capabilities it outlines are: 

1. Understanding the value of CX (The Customer Experience Effect)
2. Understanding Gen Z
3. Utilizing customer experience intelligence (CXI)
4. Behavioral Economics for Customer Experience
5. Accumulating and acting on best practices
6. Developing strategies and tactics for customer interconnection; and
7. Innovating customer experiences 

Written in collaboration with Vineetha Raveendran, the book breaks down what it takes to deliver an excellent experience for the new kids on the block, with a chapter dedicated to each of the seven capabilities. 

“Vineetha and I wanted to explore the characteristics of the companies that are already doing it right for Gen Z,” says Bean. “There will always be people who don't think customer experience is a real thing, but then there's a small group of companies that do get CX, and as a result, when they go into a market they dominate it.”

Some of the capabilities are self-explanatory, but others naturally demand deeper discussion. For example, CX intelligence – or CXI as Bean calls it – is a “portfolio approach” to amalgamating various inputs, from figures to feedback and observations, then creating insights on which to base a strategic approach and develop, improve or innovate customer interactions. 

“The companies that do this have these ways of making insights out of all this information to say, what's our strategy for Gen Z, how do they want to engage, and then what are the interactions they want to have,” Bean says. “CXI goes beyond ‘we need to fix that’, to being predictive. I love it when I walk into a place that knows me well and they can show me something new that I didn't know I wanted. Gen Z wants this, too, so they need to predict those needs,” he explains. 

Some capabilities are drawn from existing business models and analysis, for example behavioral economics, which was first put on the map by American economist Richard H. Thaler. “Until Thaler showed that people’s behavior can be complex and irrational, many important economic decisions assumed that people are essentially rational and make monetary decisions specifically to optimize their well-being. This idea, or simplification, allowed for the creation of economic models and decisions separated from human behavior,” Bean says. 

“Companies big and small could see they needed to adopt this, and they started to experiment with different experiences using behavioral economics to see how those differences influenced customer behavior,” he adds. 

On customer interconnection, Bean is quick to distinguish from business and marketing strategies, where a connection strategy exists and is being executed on. 

“Instead, this is about understanding what customers, or users, really want so an interconnection can be made. When you have at least four dimensions for understanding people and how they want to interact, I call it the CX4 – for example by looking at how they are when they engage emotionally, how we're using their time, if they found an interaction valuable and what it did for them – you find out how they want to be engaged, and this is how we interconnect. That's going to create more advocacy and more money.”

Finally, innovation may sound clear-cut, but in a world where thousands are trying to be unique, it’s more than testing an idea or invention. 

“One characteristic of the companies that have already innovated successfully for Generation Z is that they understand they have the CXI, but they also understand what it takes to bridge the differences between an idea and an invention, and then into successful innovation. Intuit, ServiceNow and electric bike maker Pedego are great examples” Bean says.

The characteristics of Gen Z

Capabilities covered, the next consideration for next generation CX is understanding the key  behaviors that define them as customers. 

Inspired by the book iGen by generational expert Jean Twenge, Bean started to explore the key behaviors and needs that organizations need to consider when designing experiences for Gen Z customers. Bean and Raveendran conducted their own research to address the question, Bean says that one certainty is clear: this generation is more different than any two generations compared or combined. 

There are several reasons for this: Gen Z wants privacy and work-life balance, they set goals, they care about social causes, and they want genuine experiences with those they buy from. 
“This isn't the generation that you want to make promises to then sell them something else,” Bean says.

“This is the generation where, if you message them with certain promises, you want to make good and deliver on those promises, whether it's the interactions, or the products and the services themselves.”

Bean’s observations are not too dissimilar to CX Network’s own research into the top customer behavior trends.

For our 2025 Global State of CX research, we asked the practitioners in our network to select three customer behavior trends, across all generations, that are influencing their work at present from. From a list of more than 20 choices, the top responses included awareness of how AI works / uses their data (selected by 38 percent of practitioners), customers also using AI for their service and sales interactions (21 percent), awareness of ethical working conditions (13 percent) and demand for sustainable/ethical products and brands (11 percent). 

Bean says that those who address these demands most successfully will be rewarded “with some great social media recommendations that can scale up and of course, create a multiplier effect”. 

“Once Gen Z customers find a company that they can trust, because the interactions have been good and the promises have been kept, then they are going to work for you. They're going to use social media as well as word of mouth, which is still very valued, to help you grow your business with the customer experience effect,” he says. 

Mess it up, however and, even under a different name, it may not be possible to return to the market. 

“The upfront costs of developing the correct interactions, making sure your products and services can meet the promise, that's where you're going to build trust, but there's a danger there if you get it wrong,” Bean adds. 

Understanding how Gen Z shops 

Combining his observations of how the most successful companies ae engaging Gen Z with the behaviors outlined above, Bean is able to say with some certainty how Gen Z shops and, therefore, how to interconnect and deliver a purchase experience that matches their expectations. They won’t be swayed by fake reviews or glossy adverts – and not all their behaviors and preferences can be traced back to them being “digital natives”. 

“This is my recommendation to companies: understand the processes of Gen Z and how carefully they choose who to buy goods and services from. We have to do some careful customer experience intel on how they make their decisions, how they use social media and influencers like close friends to make purchasing decisions. The list is long, but when you know that process for a particular Gen Z customer, you can put yourself in that process in a positive way,” Bean explains.

One common myth that needs busting, however, is that everything must always be online. “They still love to shop offline,” Bean says.

“I always say blend the digital and offline experiences, because that's how people use them. So many times Gen Z consumers have told me, ‘well, I'm in the store, but I'm also looking and comparing prices online’,” Bean explains. “It's very, very important to give Gen Zs – with your understanding of Gen Zs and your business goals and their goals – reasons to trust you. That's going to make things a lot easier for businesses.”

Some Gen Zs are starting to have children of their own, meaning their purchasing habits could still – to borrow from the Gen Z vernacular – go viral. However, one thing businesses should not do is assume that the habits of Gen Z will rub off on Millennials, Gen Xers or Boomers. 

“Look at this generation totally separate to other generations,” Bean reinforces.

Although they will become the dominant generation in the coming years in terms of both total numbers and purchasing power – “and their demands are quite different,” Bean says – the other generations still need to be invited along for the ride.

“The difference with Gen Z is the need to emphasize the CXI as much more a part customer experience development and decisions. Understanding Gen Z is really the foundation for advanced marketing, customer experience and user experience,” Bean clarifies. 

The next generation and the future of CX

On how all this will influence the future of CX, Bean says the main changes will be around AI and the importance of value builders, such as experience, to customers. 

“I don't see a revolution where AI is concerned, but AI done right is creating a very fast evolution”, he says. The most effective way to use AI in future will be to better understand customer segments and then use real-life customers to help test the more transactional AI – such as new bots – before launch. 

Tech is changing CX fast and, in this respect, Bean says it’s worth remembering how Steve Jobs’ viewed change: figure out the kind of experience customers want and then figure out technology can give it to them. 

“As Gen Z becomes a larger percentage of any customer base, there's going to be more what I call CX-first markets. If your market is dominated by Gen Z customers, they're going to demand a great CX and UX before they will buy,” Bean says.

But you can’t fake this part. He also believes the companies that say they work for their customers but don’t show it will – to borrow another Gen Z phrase – be seen as cheugy. That is, very much out of favor. 

“The research company JD Power told me many years ago in an interview for the first CX leadership book that around one third of companies are lip service companies. They'll tell you they like their customers, but they don't show their customers they like them. Those are the companies that are most likely to be squeezed away by Gen Z,” Bean says. 

This will put many at a crossroads where they can either be recognized by Gen Z as the real deal, or outed as fakes and “lumped in with the majority of companies, who people buy from based on price, but they’re not going to recommend them,” Bean says. “There will be less of a middle ground. You won't be able to fake it as much with lip service messages, you're going to have to pull through.”

Next Generation Customer Experience is available on Amazon US and Amazon UK with links for other markets available here. 

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