Millennials: Too Powerful for Loyalty Programs to Ignore
Business Solutions "Millennials” is an overused buzzword these days, but that doesn’t mean customer loyalty and engagement programs can tune it out.
Figuring out how to connect with millennials—those born between 1981 and 1997—is critical to keeping loyalty fresh and relevant. There are 80 million of them in the United States, according to the U.S. Census, making the group bigger than any other demographic. They have $600 billion in annual buying power and, by 2020, are expected to represent 30 percent of total U.S. retail sales, $1.4 trillion in expected spending, according to Standard & Poor’s.
The unique slice
Millennials don’t behave quite like other consumers. A recent survey of loyalty members by LoyaltyOne found that millennials value program exclusivity and a sense of fun more than other members. In fact, 25 percent had joined a program in the past year because it offered member-only events, compared to 16 percent of all respondents. And 40 percent joined for access to member-only sales, products and services, compared with 33 percent of the general respondent base.
"Forty-two percent continue to participate in a program because it has a mobile payment option..."
Those that fail to make them feel special will feel it: When asked why they stopped using a program, one-third said they did so because it didn’t offer members-only exclusives.
Millennials also demand a high level of tech-savvy. Forty-two percent continue to participate in a program because it has a mobile payment option, for example, while just 15 percent of baby boomers said the same.
And they love gamification, with 27 percent saying they continued participation in a program because it featured a game or social element such as badges, leader boards or communities. Only 7 percent of boomers stayed for those reasons.
Any way you cut it, the future is clear: Loyalty can’t thrive unless it wins with millennials.