Gen Z (Generation Z) is the first truly online generation and Asia’s Gen Z is no exception, but as younger subscribers come online, what should telcos expect and how will they cope?
Between 2022 and 2025, an additional 200 million Asians will become mobile subscribers – taking the total to over 1.8 billion or 62% of the population (GSMA). This forecast excludes China, which itself has enormous growth potential. But outside China – and despite those extra 200 million subscribers – growth is beginning to slow. The next billion subscribers will be increasingly hard-to-connect or, quite simply, are still too young to own a phone.
Gen Z’s lives are digital and the gender gap is evaporating
GWI data shows that in 2021 humanity spent 12 trillion hours online, or around 7 hours per day per person. But people in South-East Asia spend far longer than average. Filipinos emerged as Asia’s biggest online addicts – spending an average 11 hours per day online, a whopping 60% more than the global average. Malaysians, Indonesians and Thais are not far behind, with only the Vietnamese spending less time online than those in other regions.
Dig a little deeper and you’ll quickly discover that the youngest age group (16 to 24) are amongst the heaviest internet users, spending roughly 60% of their waking lives online or 10 hours per day.
Generation Z is, in fact, the first truly online generation. For them, there’s no dividing line between work and play –the internet is for education, work and leisure – and they think nothing of having friends spread across the globe, creating communities that are connected by interests rather than proximity.
What’s more, there’s no gender divide here. Despite the GSMA pointing out a gap between the sexes in terms of getting women online, once they are online, young women spend even longer per day using the internet than their male peers.
Gen Z are multi-platform but use platforms differently to Gen Y
What are the young people of South-East Asia doing online? Mainly using multiple social media platforms. Young adults in Malaysia, the Philippines and Singapore use an average of 8 platforms, the most popular of which are YouTube, Facebook, Instagram, Twitter and TikTok. Facebook Messenger continues to be the most popular messaging platform, according to GSI and is still used more often than either WhatsApp or Telegram.
A study by HILL Asean (Now you Z me: Debunking myths about Asean’s Generation Z) found that Generation Z displayed different behaviour online compared to Gen Y peers. They were less likely to enjoy sharing texts and photos (60% compared to 65% for Gen Y), but more likely to share videos (52% v 49%) and stories (46% v 41%).
For CSPs thinking about how best to support young people online in the 5G era, there are 5 key points they need to consider in order to meet their expectations.
1. The customer service gap must be closed
The importance of getting customer service right is underlined by research from Zendesk in Australia, Japan, India, Singapore and Korea. This found that 8 out of 10 customers say it influences their purchasing decisions, while 7 out of 10 would shift to a competitor after a single bad customer service experience. Despite this intolerance of poor customer service, 7 out of 10 respondents felt that customer service was often an afterthought.
The lesson here is that the more time customers spend online, the higher their service expectations become. With Gen Z spending so much time online, inevitably they have a very low tolerance for poor service.
2. Customers want digital autonomy
Research by Subtonomy in the Nordics uncovered a complex pattern of channel behaviour amongst customers. Many customers that encountered problems wanted to try and fix the problem for themselves – either by searching for answers on their telco’s website (34%), looking for answers online (31%), using self-help or chatbots (14%) or even watching YouTube videos (6%). Customers often used multiple methods to try to fix their own problems – only calling the call center when they couldn’t resolve the issue themselves. This desire to be digitally autonomous and self-sufficient is just as true of young Asian customers as it is of those in the far north of Europe.
Telcos need to ensure that customers are supported in the channels they find convenient. Chatbots – which are often touted as a cure-all – are undoubtedly an effective method of answering simple well-understood queries, but they are not suitable for all customers or all support issues. They’re also only as good as the data they’re given. Providing world-class customer support means ensuring all channels are working from the same, accurate, timely and consistent data, in order to deliver the seamless and consistent omnichannel experience customers now expect.
3. Relevancy and proactivity are vital
According to Subtonomy research, virtually all customers want to receive personalised notifications before planned engineering works or to keep them up-to-date if there’s a fault. Legacy support tools usually didn’t allow precise targeting of such communications, meaning that customers would often be informed about disruptions that didn’t even affect them.
So what would customers like their telcos to do if there’s a fault? Firstly, they expect hyper-personalised and accurate communications, and secondly, they expect faults to be fixed proactively. Interestingly, if fixing a fault requires a patch to be applied, half of the customers say they want to decide when to apply it so that it doesn’t interrupt their current activities.
4. Great service is not just differentiating, it’s revenue-generating
In the advanced mobile markets of the Nordics, guaranteed service quality is vital – just as in Asia – with 8 out of 10 customers saying that the offer of a service guarantee combined with compensation for non-performance would influence their choice of supplier. Staying connected is now so important to customers that around half (45%) are prepared to pay extra for guaranteed service quality. The youngest customers (those aged 18-39) are the ones most likely to be willing to pay more for service guarantees, which undoubtedly reflects their increasingly digital lifestyle and reliance on their connections. Young people are also the ones most likely to be using quality-sensitive services such as video streaming or gaming.
Delivering guaranteed service quality means having unprecedented insight and control of what’s happening on the network. This means being able to monitor not just the macro network experience but also the experience of individual users.
5. High levels of automation and digitalisation are required to support the next billion customers
As Asian telcos prepare to connect the next billion – mainly low ARPU – subscribers, automation and digitalisation become essential to keep support costs as low as possible. The good news is that telcos can have their cake and eat it. Experience from the Nordics shows that 9 out of 10 problems and enquiries can be dealt with automatically or via digital channels. Once CSPs can provide highly efficient self-service or digital support, they can meet their customers’ expectations of digital autonomy, lower their support costs, and increase the number of experience-enhancing interactions they have with their customers.
Telcos need to stop seeing silence as a virtue. Having more interactions with customers provides more data points to understand their experience and helps telcos detect problems and prevent silent churn. The key to success is to provide more points of interaction at a low cost.
To gain further insight into current expectations of customer service why not download Subtonomy’s new report, and subscribe to the mailing list for more hints and tips.