Millennials' Loyalty Program Preferences
But did you also know that the availability of high-value discounts can influence millennials' loyalty to retailers and brands, and that their embrace of discounts is stronger than it is among Gen- Xers and baby boomers?
Or that among all three demographic segments, millennials are more enthusiastic than older generations about saving on fuel?
Those somewhat surprising findings emerge in a 2015 summertime U.S. survey* by Excentus and Ipsos eNation about consumers' loyalty program preferences and their reasons for joining, engaging, and earning and redeeming rewards.
Millennials – the 18-34-year-olds who make up 25% of the U.S. population and generate more than $200 billion in annual spending -- are willing to switch brand allegiance (80%) or shop at a different store (78%) if by doing so, they can also earn rewards that can be redeemed on gasoline purchases. In effect, their loyalty can often be tied to the discount rather than the brand. By comparison, 69% of Gen- X shoppers (ages 35-54) and 59% of boomers (55+) are willing to change brands, while 64% of Gen-X and 51% of boomers would shop elsewhere to earn the same type of rewards.
The ability to save money, it turns out, can serve as avenue for deeper brand and retailer loyalty among millennials who are ready to save money any way they can.
Other survey highlights:
-Millennials tend to rely on a range of loyalty programs to save money, including (in order of preference) retailer/brand coupons (26%), fuel savings rewards (25%) and instant cash-register discounts (23%)
-While all three demographics tend to earn fuel rewards primarily from grocery store programs, millennials are more likely than older groups to earn from a retail store program, an oil/gas brand credit card, a travel rewards program or a professional/industry association
-Millennials are plugged in to technology and Internet-connected, with 33% checking their rewards on a mobile app (vs. 16% Gen-X and 6% boomers); 27% checking on a smartphone/tablet (vs. 14% Gen-X and 7% boomers), and 7% checking on a wearable device (such as an Apple Watch, vs. 2% Gen-X and 0% boomers).
-A sign of their always-on connectivity, millennials are more likely to check their rewards balances daily (13%) compared to Gen-X (10%) and boomers (7%).
-Known for their social networking prowess, millennials are also more likely (19%) than Gen-X (8%) or baby boomers (7%) to join a fuel savings reward program based on a family member's or friend's recommendation.
Indeed, the survey findings reinforce for retailers the importance of "knowing your customer."
Generally more enthusiastic than older populations about saving on the cost of gasoline, millennials emerge as ripe targets for loyalty program partnerships and discounts that meet their needs and match their lifestyles. And the brands that offer them are well-positioned for competitive advantage with this influential population.
Loyalty and marketing professionals can learn more by downloading Excentus' "What Drives Millennial Loyalty?" white paper, and the broader "Road to Rewards" report. Both documents can help guide the creation of loyalty-building opportunities and rewards programs that cater to millennials' unique preference and behaviors.
*The July 10-13, 2015 survey of 1,016 U.S. consumers has a margin of error of +/-3.1%.
Brandon Logsdon is the President and CEO of Excentus, which creates programs that help lower the cost of everyday life. Whether through direct-to-consumer programs like the Fuel Rewards program and fuelperks!, or through its Centego products and services, Excentus proprietary software is the engine that helps numerous loyalty and marketing programs drive down the cost of everyday commodities like gasoline. Logsdon is a member of the Excentus Board of Directors, with oversight of the firm’s coalition loyalty program, enabling technology arm, and IP portfolio. www.excentus.com