To compete in today’s marketing-saturated world, your loyalty program needs to stand out. A cookie-cutter approach won’t move the needle with today’s selective consumers. Rather, your program needs to be differentiated and speak to diverse market segments in the manner they expect.

Generational differences, for example, matter when it comes to loyalty.  Different generations — Gen X, Millennials, and Gen Z — are attracted to different marketing communications and loyalty program strategies.

While it’s true there is some crossover in what these different generations respond to — such as embracing digital and mobile technology and expecting personalized communications — don’t be fooled into thinking you can always throw the same loyalty tactics at all three of these demographics and expect the same results and reactions.

As the saying goes, the devil is in the details, and knowing the details of generational marketing and communication strategies can make or break success with these generations. We’ve broken down these age groups to help you understand what drives their loyalty and truly target with success.

Generation X

Fast Facts

Gen X (born between 1966 and 1976) earn 31 percent of the household income in the U.S., making them the most powerful generational consumer segment (Source: Yahoo, Audience Theory and Ipsos).  

Furthermore, approximately 70 percent of U.S. respondents and 30 percent from other English-speaking countries reported that brand loyalty was the highest in Gen X consumers (Source: eMarketer 2018).

Loyalty Tactics that Work for Gen X

Traditional Stamp Cards – Despite being generally tech savvy, Gen Xers respond well to traditional programs (such as stamp cards) and exclusive offers.

Time-saving and Value – Most of all, Gen Xers are very busy, so make sure your loyalty program is quick to learn and easy to use. And studies have shown that 88.6 percent of Gen X join rewards programs to save money, with 71.2 percent joining to receive rewards — they are concerned about value.

Customer Service – Exemplary customer service and support is also vital to this group (Source: Modern Marketing Management).


Fast Facts

Millennials (born between 1977 and 1995) are now the largest generation living in the U.S. – approximately 80 million strong – and collectively have an annual spending power of $600 billion (Source: Accenture).

Some argue that it’s actually Millennials who are the most brand-loyal generation, but it is important to point out that their loyalty is highly selective and they aren’t as excited about traditional card-based loyalty programs (Source: Modern Restaurant Management).  

Loyalty Tactics that Work for Millennials

Points and Rewards – 80 percent of Millennials already participate in loyalty and rewards programs (Source: Chief Marketer) and 80 percent of Millennials find points or rewards for purchases made in-store, on a website or mobile device appealing. They also appreciate the ability to choose among several types of rewards (81 percent), and opportunities to earn bonuses by doing some specified activity (81 percent) (Source: Nielsen).

The Customer Experience – What really attracts Millennials is genuine experiences, customer engagement and convenience — these are far more important loyalty program traits than the transactional purchase and reward system (Source: Chief Marketer).  Putting more thought into how to enhance Millennials’ brand experience and make their life more convenient will go far.

Discounts – But no mistake, Millennials are children of the recession. Tying discounts into loyalty is key; 80 percent of millennials are willing to switch their brand if they can save money (Source: Modern Restaurant Management).  

Mobile-readiness – 97 percent of Millennials said they’d be more likely to participate in a loyalty program if they could access it from their smartphone, compared to 69 percent of non-Millennials. (Source: CodeBroker).  And 13 percent of millennials are more likely than older generations (i.e Generation X at 10 percent) to interact with their rewards program daily – especially if it’s mobile-based.

Social Media – Millennials want to engage with brands on social networks. 62 percent say that if a brand engages with them on social networks, they are more likely to become a loyal customer (Source: Elite Daily).

Reviews and Word of Mouth – Studies by the National Retail Federation and Boston Consulting Group have found Millennials trust user-generated reviews and word of mouth much more than traditional media and advertising. These could include sources such as social media posts, vloggers and brand ambassadors.

Social Consciousness – Globally, 66 percent of consumers are willing to spend more on a product if it comes from a sustainable brand but 73 percent of Millennials indicated a similar preference. In addition, 81 percent of Millennials expect their favorite companies to make public declarations of their corporate citizenship (Source: Nielsen).

Overall, Millennials expect brands to be loyal to themMarcie Merriman, executive director of growth strategy at Ernst & Young said it best: “…expect businesses, brands and retailers to be loyal to [Millennials]. If they don’t feel appreciated, they…move on. It’s not about them being loyal to the business.”

Generation Z

Fast Facts

Generation Z (born between 1996 and 2011) is projected to account for almost half of all U.S. consumers by 2020 (Source: Adweek).

Unfortunately, according to an Ernst & Young report, only 30 percent of Gen Z consumers see loyalty programs as a positive thing and a study by Lab42 found that less than half of Gen Z shoppers were influenced to purchase based on a loyalty program— compared to nearly three-quarters of millennials.

The Lab42 report also found that brand loyalty for Gen Z is less about a “program” and more about how the brand experience aligns directly with their lives.

Loyalty Tactics that Work for Gen Z

Instant Gratification – Gen Z consumers grew up in an entirely digital world and look for instant gratification. They tend to have a short attention spans than older generations and are fluent in text shortcuts and Twitter character limits. Long posts and wordy brand messaging probably won’t hold their interest – keep it short and sweet.

Social, Mobile, Video – To build loyalty, brands should take advantage of mobile and video communications as well as Instagram and Snapchat. Social media platforms should be used not only to post your brand messages but also to encourage these customers to post about their brand experiences. Like Millennials, Gen Z values a social community and look for numerous opinions and reviews before making a purchase decision.

Real World Brand Interactions – Interestingly, despite being the digital generation, Gen Z appreciate real-world brand interactions.

A report by PwC found that 81 percent of Gen Z respondents preferred to shop in stores. Note that a separate study by Adyen found that retailers who provide in-store technology and an engaging customer experience are vastly preferred. Overall, tying in-store and digital experiences together cohesively matters to Gen Z.

Discounts – Like their older Millennial siblings, 80 percent of Gen Z consumers are willing to sign up for loyalty cards in exchange for deals/discounts (Source: Interactions). Really, who doesn’t love a good discount?

Social Consciousness  – Finally, also like Millennials, Gen Z are socially conscious and will be drawn to and loyal to companies that reflect that attitude. According to a survey by Mattersight, 84 percent of Gen Z will actively promote a brand that stands up for something they believe in.  Overall transparency, authenticity and purpose are critical in building trust with this generation.

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