The millennial generation will soon pass the baby boomers as the largest representative age group in America. This means that they are also one of the most studied demographics, and are increasingly attracting the attention of customer experience marketers everywhere. Brands across virtually every industry are wondering how to best capture and retain the customer loyalty of this highly coveted segment.
Recently, CrowdTwist, a multichannel customer loyalty and engagement solutions provider, set out to answer this question and discovered some very interesting findings in the process.
The 2015 CrowdTwist Loyalty Program Report: Demystifying Loyalty Among Millennials, is the first in a three-part series. The research was conducted to gauge how millennials feel toward loyalty programs and to explore what customer engagement initiatives best influence their behavior. Defined as anyone born between 1981 and 1997, this initial study solicited the thoughts, opinions, values, and attitudes of 402 millennials.
The overall takeaway was that there is a profound generational difference between the way millennials and baby boomers both perceive and engage with loyalty programs. Most notably, millennials not only expect to be rewarded for their participation with a brand, they also expect these brands to reward them with incentives that are relevant, meaningful, and compelling.
They certainly still appreciate traditional discounts and offers, just like baby boomers, but that alone is not enough to drive engagement and win loyalty.
“Millennials appreciate offers and bonuses, but they don’t want to be pandered to,” Geoff Smith, CrowdTwist SVP of Marketing, told Loyalty360. “They want to be respected. So it is more important for brands to get more personal, and develop one-to-one relationships with this age group.”
CrowdTwist cites the rise of social media and the ubiquity of continuous online interaction as one of the main reasons for this shift. In this new age of the consumer, millennials are one of the most socially and technologically enabled groups in history, and, as a result, their perspectives and relationships with brands have changed dramatically.
Even beyond demanding more personalized and one-to-one interactions, millennials also expect to be actively and continuously engaged across multiple channels and touchpoints.
“It is important, particularly with respect to loyalty, to integrate all of the other social and digital channels on top of just the spend or purchase channel into a loyalty program,” Smith continued. “Because millennials are very active in all these channels, brands looking to become more consistent and personalized in their messaging need to be involved as well. If their traditional loyalty program only engages that consumer in that purchase cycle, they are missing an opportunity.”
The study revealed that the vast majority (67.9%) of millennials say that they do not currently earn points or rewards for engaging with a brand through their preferred digital or social channels. And most (60%) said they would like to earn rewards for these activities.
This would suggest a huge opportunity for brands to engage this group by rewarding them for doing things that they already do. That is, heavily engaging in online behaviors.
“We really see loyalty differently,” Smith said. “Loyalty can extend the relationship across all channels a consumer has with the brand. So we can recognize and incentivize and reward people for tweeting, for watching an online video, posting on Facebook, loading an image on Instagram, writing a review, opening an email, and all sorts of behaviors that are above and beyond just the purchase.”
Not enough brands appear to be doing enough to engage millennials on this new digital front. And it certainly does seem to be in their best interests to do so. Not only does it present a tremendous opportunity to win customer loyalty, neglecting that opportunity might actually prove to be even more detrimental.
The CrowdTwist study also found that 65% of millennials reported being “quite loyal” or “extremely loyal” to their favorite brands. However, even this high level of loyalty might not be enough to keep these customers around forever because 36.6% said they would be willing to forsake their favorite brand.
What was one of the main reasons given for this potential abandonment? It was, of course, that loyalty program rewards are not compelling, relevant, or meaningful enough.