How the Gen Z Marketing Funnel Has Changed: Why Loyalty Is Now at the Top

The marketing funnel has long been a staple of business strategy. Traditionally, it operates with awareness at the top, followed by interest, consideration, and finally, purchase and loyalty at the bottom. But with the emergence of Gen Z—those born between 1997 and 2012—a major shift has occurred. For Gen Z, loyalty is no longer at the bottom of the funnel—it’s at the top.

This change has significant implications for brands and marketers trying to connect with this powerful demographic. In this blog post, we’ll explore how the traditional marketing funnel has evolved, why loyalty now starts at the top for Gen Z, and what this means for brands looking to cultivate long-term relationships with this generation.

Understanding the Traditional Marketing Funnel

Before diving into the changes, let’s briefly revisit the traditional marketing funnel model:

1. Awareness: The customer becomes aware of your brand through advertising, social media, or word-of-mouth.

2. Interest: The customer starts showing interest in your product or service, perhaps by following you on social media or visiting your website.

3. Consideration: The customer compares your product with competitors, evaluates reviews, and decides if your offering suits their needs.

4. Purchase: The customer makes the decision to buy.

5. Loyalty: After repeated positive interactions with your brand, the customer becomes loyal, promoting your business to others and making additional purchases.

This traditional funnel assumes that loyalty is earned after the purchase. But Gen Z’s behavior shows us that loyalty is often the very first step in their decision-making process.

The Shift: Why Loyalty Now Sits at the Top

For Gen Z, loyalty isn’t something that comes after purchase—it’s something that drives their buying decisions from the very beginning. This is because Gen Z, more than any previous generation, cares deeply about aligning their spending habits with their personal values. They are hyper-aware of a brand’s reputation, its mission, and its community.

Key Reasons for the Shift:

1. Value-Driven Consumers

Gen Z is highly conscious of the social, environmental, and ethical stance of the brands they support. They’re more likely to engage with a brand that aligns with their personal values, whether that’s sustainability, social justice, or mental health advocacy. They seek out brands they can be loyal to from the start—brands that share their worldview and commitment to making a difference.

- Example: Gen Z shoppers are more likely to support companies that have strong sustainability practices, such as Patagonia, which is known for its commitment to environmental activism. Even before a purchase is made, loyalty is established based on shared values.

2. Influence of Social Proof and Word-of-Mouth

Gen Z is deeply influenced by their peers and online communities. They turn to user-generated content (UGC), peer reviews, and social media influencers for validation before making a purchase. They are loyal to what their community trusts, and they often seek out these trusted recommendations before they even become aware of a product or brand.

- Example: A Gen Z consumer is more likely to buy skincare products from a brand they see their favorite influencer recommending or a product their friends are raving about in online reviews. The trust and loyalty to the influencer or the community’s opinion lead them to the brand.

3. Expectations of Transparency and Authenticity

Gen Z has grown up in the digital age, and they’ve seen the good, bad, and ugly of corporate transparency. They are quick to reject brands that are inauthentic or that try to manipulate them with over-polished advertising. Loyalty comes from a place of trust, and for Gen Z, trust is earned through authenticity and openness from the get-go.

- Example: Brands like Glossier have thrived with Gen Z because of their transparency and direct communication with their audience. Glossier doesn’t rely on traditional advertising; instead, they build loyalty through direct engagement and open conversations with their customers.

4. The Importance of Community Building

Gen Z doesn’t just want to be sold to—they want to be part of something. They gravitate toward brands that create a sense of community, whether through social media engagement, collaborative projects, or shared experiences. They’re looking for brands they can join, not just buy from, and they often build loyalty through these communities before ever making a purchase.

- Example: Nike has successfully built a community around its brand by engaging with customers through fitness challenges, exclusive online groups, and a commitment to diversity and inclusion. Gen Z loyalists participate in Nike’s community, long before they may even consider purchasing a product.

The New Gen Z Marketing Funnel

Given these behaviors, the Gen Z marketing funnel looks more like this:

1. Loyalty: This is the starting point. Gen Z builds relationships with brands they already trust or that align with their values.

2. Awareness: Awareness is no longer the first step, but a continuation. Gen Z actively seeks out brands they want to be loyal to, often through social media, peer recommendations, or influencer endorsements.

3. Engagement: Once they are aware of the brand, engagement follows. This is where Gen Z interacts with the brand on social platforms, follows them on Instagram, watches TikTok videos, and engages in community-based activities.

4. Consideration: Gen Z carefully considers the brand’s values, mission, and how it fits into their lives. They research the brand’s reputation and product quality through peer reviews and social proof.

5. Purchase: Only after these steps do they make a purchase, and because loyalty is established from the beginning, the purchase is often the start of a longer relationship.

How Brands Can Adapt to the New Funnel:

1. Start with Transparency

Loyalty begins with trust, and trust comes from transparency. Gen Z wants to see behind the curtain. They want to know how your products are made, where your materials are sourced, and what your brand stands for. Share your story, be open about your values, and don’t shy away from showing both the good and the bad.

- Actionable Tip: Use social media platforms like Instagram Stories or TikTok to give a behind-the-scenes look at your brand’s operations. Be transparent about your sourcing, manufacturing, and values.

2. Engage Through Social Media Communities

Gen Z thrives in digital communities. They don’t just follow brands—they want to feel like part of the conversation. Building a strong, engaged community on social media allows you to foster loyalty early on.

- Actionable Tip: Create interactive social media campaigns that encourage user participation. Use hashtags, challenges, and UGC to get your audience involved in creating content for your brand.

3. Prioritize User-Generated Content and Peer Validation

Instead of focusing all your efforts on polished brand messaging, encourage your customers to share their experiences. Gen Z puts more trust in UGC than traditional ads because it feels more genuine.

- Actionable Tip: Encourage your customers to share reviews and images of your product online. Feature UGC on your own social media pages, and create incentives for customers who share their positive experiences with your brand.

4. Align with Social Causes

Gen Z is deeply value-driven. They want to support brands that are making a difference in the world. By aligning your brand with causes that matter—whether it’s sustainability, diversity, or social justice—you can build early loyalty with this demographic.

- Actionable Tip: Partner with nonprofit organizations or social initiatives that reflect your brand’s values. Make sure your efforts are authentic and ongoing, not just one-time marketing stunts.

5. Focus on Building Long-Term Relationships

With Gen Z, marketing doesn’t end at the sale. Because loyalty is already in place before the purchase, the goal is to nurture and deepen that loyalty over time. Brands that focus on long-term relationships rather than one-time transactions will see greater success with this audience.

- Actionable Tip: Invest in post-purchase communication that reinforces your brand’s values and commitment to the customer. Offer loyalty programs that reward repeat purchases, and stay engaged through personalized email marketing and social media interaction.

Conclusion: Navigating the Gen Z Marketing Funnel

The Gen Z marketing funnel has fundamentally changed, with loyalty at the top driving the entire customer journey. To succeed with this generation, brands need to focus on building trust, aligning with values, and fostering community before ever trying to make a sale.

This shift may seem overwhelming, but it’s an exciting opportunity for brands to forge deeper, more meaningful connections with their audience. If you’re looking for guidance on navigating this new marketing landscape, Golden Hour Co. is here to help. We specialize in understanding the needs of Gen Z and crafting marketing strategies that build long-term loyalty.

Learn more about how we can help your brand succeed in this new era of marketing. Get in touch by emailing us at danielle@goldenhourcodigital.com.