Today's loyalty programs need to resonate with millennials and speak to their values.
There have been enough reports and surveys that indicate how millennials are some of the most socially connected and loyal customers around. They are particular about the quality of the products they buy and are even more particular about corporate social conscience. Apparently, they are also concerned about developing meaningful connections with their brand, which plays a key role in driving them towards making a purchase.
But, these reports leave out another important factor. The above aren’t the only thing that millennials are concerned about. They are also loyal to businesses that provide them with high value discounts. In fact, they approve of loyalty programs and discounts much more than baby boomers or generation X did.
Millennials are also the only group among the three generational demographics to be concerned about how much they spend on fuel.
These new findings were identified in a U.S. survey conducted by ipsos eNation and Excentus, last year. The survey was conducted to identify customer preferences with regard to brand loyalty and loyalty programs and their reasons for engaging with such programs.
As we at Fifth Quadrant have preached quite often in our blog stories, it's incredibly important to know your customer. Understanding what motivates millennials and accepting that traditional marketing techniques need to be modified is one of the first steps in creating a customer centric strategy that can help drive brand loyalty.
Who are the Millennials?
The millennial group are aged between 18 and 34 and they currently account for 25% of the American population and just over 20% of the Australian population. They contribute over $200 billion in annual spend. According to the survey, 80% of them would switch brand references and 75% would make purchases at a different outlet as long as long they receive benefits or rewards on their fuel expenses.
To put it simply, their brand loyalty is determined by the loyalty programs that a brand offers, rather than by the product or brand itself.
In comparison, only 69% of Generation X (aged 35 to 54) and 59% of Baby Boomers (aged over 55) would change brands, while 64% of Generation X and 51% of Baby Boomers would change stores in order to receive discounts.
What we can deduce from this is that a higher level of brand loyalty can be achieved among millennials as long as businesses provide them with better means to save money.
A Final Point
It was also found that millennials look for a wide range of loyalty programs. In the order of preference, 26% would like retailer or brand coupons, 25% preferred fuel saving rewards, and 23% preferred cash-register discounts.
Millennials were also likely to earn fuel saving rewards through retail store programs than through grocery store programs, which is the exact opposite for the older demographic.