Marketers spend a lot of time thinking about how to attract and retain the brand loyalty of different people. These potential consumers are often placed into three generational segments, which include Baby Boomers, Generation X, and Millennials. But these segments are not static. Things change, behaviors evolve, customer loyalty fluctuates, consumers age, and, of course, new people are born.
So there is now a new generation on the horizon, and the Centennials are beginning to make their mark on the customer loyalty and marketing landscape. And much like this burgeoning generation itself, our understanding of Centennials is still nascent.
As part of an exhaustive report titled, “Capturing Loyalty Across the Generations: Demystifying Brand Loyalty Among Millennials, Generation X, and Baby Boomers,” CrowdTwist, a leading provider of multichannel customer loyalty and engagement solutions, offered a glimpse into the loyalty behaviors and customer experiences of this up-and-coming group.
Also known as Generation Z, Centennials are defined as those born during and after 1998. Currently comprising 20% of the population, they are also recognized as the fastest growing generation and command an impressive $44 billion in spending power.
Much like their slightly older millennial counterparts, Centennials were raised on technology. They regularly engage with multiple screens simultaneously and they intimately understand social media as a normal part of life.
In this respect, it might be tempting to think that millennials and Centennials might perceive brand loyalty similarly. However, CrowdTwist found some vast differences between them.
“Millennials are, by far, the most brand loyal generation,” Geoff Smith, CrowdTwist SVP of Marketing, told Loyalty360. “They stick with the brands they love and they have a lower tendency to switch. In comparison, Centennials tend to lack brand loyalty. They will move from brand to brand and take time before deciding which companies will earn their devotion. They are more focused on actual products, rather than the brands themselves. Getting Centennials to become brand loyal requires that companies offer convenience, such as online ordering and delivery, unique experiences, and authenticity.”
Understanding these nuances will help marketers gain the loyalty of these important groups. And winning the brand loyalty of Centennials might be difficult, but the research suggests that successful attempts could be worth it in the end.
The report says that once Centennials actually find a brand they like, over 60% stick with it. Furthermore, another 60% said they regularly share knowledge about products and experience with friends online, which means most rely on their peers to make purchasing decisions.
“Since Centennials are connected nearly all waking hours of the day, it’s more important than ever for brands to leverage social media as part of their loyalty marketing outreach,” Smith said. “Unlike Millennials who tend to conform to their peer group's sense of normal, Centennials are supportive of individuals, their quirks, and styles. So while Centennials rely more heavily on their peers versus other generations to make purchasing decisions, it's still important for brands to personalize and differentiate the experiences customers have.”
This is one trait that Centennials seem to share with every other generation. Across the board, all consumers today are increasingly seeking a more relevant, meaningful, and 1:1 customer experience. The goal, of course, is to understand what that means for each specific group.
For Centennials, this means that socially conscious brands often get a larger response. Centennials like to engage with brands that are authentic, sustainable, and ethical, which are those that also demonstrate strong values and make beneficial contributions to society, the environment, and other various causes.
Centennials have greater expectations, and to win their customer loyal brands have to differentiate themselves through a variety of fun, relevant, and socially conscious strategies.
Overall, however, brands must understand that Centennials are also very young. They are still developing, finding their way, and crafting personal identities. Their consumer behaviors are still evolving.
But this is also true of customer loyalty in general. Loyalty changes over a lifetime, and this is just as true with baby boomers. As consumers age, loyalty to a particular brand may change, especially if new brands offer greater value or begin to align with new needs.
“With Centennials being as young as they are, this is no different,” said Smith.
“For these young consumers, brands are replaceable. Their loyalty will continue to fluctuate and will further be acerbated by the pace of technological change. To remain top of mind, companies must stay informed about new technology and emerging platforms, and create ways to monetize consumer interactions from the very start. This will allow brands to build audiences and profit harmoniously while keeping customers engaged.”