Millennials have begun to redefine how brands across industries engage with consumers. Because Millennials typically focus on the personal benefits behind their brand relationships, they frequently weigh their options instead of relying upon former affinity to guide their decisions. Such somewhat unpredictable behaviors can make it rather difficult for companies to develop long-term loyalty.
Excentus' recent "The Road to Rewards: What Drives Millennial Loyalty?" report examines how the demographic, which currently represents 25 percent of the U.S. population and more than $200 billion in annual spending, embraces loyalty initiatives. Conducted by Ipsos eNation, researchers polled 1,016 U.S. consumers to compare Millennial loyalty preferences with those of their Generation X and Baby Boomer counterparts. Overall, Millennials are more willing to use technology to track and redeem their loyalty program rewards, emphasizing the idea that brands must integrate and advertise these new tools to capitalize on emerging behavioral trends.
The following statistics demonstrate how Millennials' loyalty program preferences impact their brand interactions:
- Millennials are more likely to earn rewards from retail store programs (30 percent), oil or gas brand credit cards (26 percent), travel rewards programs (14 percent), and professional or industry association programs (14 percent) than Generation Xers and Baby Boomers.
- While Generation Xers (40 percent) and Baby Boomers (42 percent) join fuel savings rewards programs more than any other type of program, Millennials prefer retail and brand coupons (26 percent), fuel savings rewards (25 percent), and instant discounts at the cash register (23 percent) in that order.
- Overall, Millennials prefer to check their rewards status via mobile app (33 percent) more than their Generation X (16 percent) and Baby Boomer (6 percent) counterparts, emphasizing the younger crowd's willingness to embrace and adopt new technologies.
- Millennials (69 percent), Generation Xers (68 percent) and Baby Boomers (67 percent) all check their rewards status at least once per month. However, Millennials (13 percent) are more likely to earn, check, or redeem their rewards daily.
- Millennials are more likely to switch brands (55 percent), switch retailers (78 percent) dine out more (78 percent), and switch grocery stores (56 percent) in exchange for improved fuel rewards. However, these consumers (54 percent) are less likely than Generation Xers (67 percent) and Baby Boomers (78 percent) to pay attention to the price of gasoline.
Key takeaway: Millennials, Generation Xers, and Baby Boomers all join rewards programs for common reasons: to save money any way they can; to earn points and rewards from everyday purchases; and to free up household budgets by reducing the everyday cost of gasoline. However, from these similarities, companies must recognize that the behaviors leading up to these actions continue to divide the generations. While Millennials are willing to join loyalty programs in exchange for clear benefits, they remain engaged and vigilant in their pursuit of the best deal. Millennials are well aware of the harsh financial realities they face thanks to their experience with the Great Recession, which is why this age group has been conditioned to save money in any way they can. Companies must understand and embrace this mindset as they develop rejuvenated loyalty strategies that appeal to this younger demographic.