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5 tips for a millennial-friendly loyalty program, backed by data

There’s a lot of research out there about millennials and loyalty. Making up nearly a quarter of the population in the US, with around $200bn in buying power, it’s no surprise that marketers are searching for the right way to connect with this generation and earn their ongoing business.

But there’s also a lot of contradictory data out there – and it can leave marketers wondering: What does Gen Y really care about when it comes to loyalty programmes?

Generalisations can be risky (especially when it comes to millennials), but there are a few things that seem to be true for the majority of this generation. So we’ve sorted through the latest research and distilled five of the most consistent findings into actionable take-aways…

1. Ensure a personalised experience throughout the customer journey

I know what you’re thinking – Personalisation, again? All we ever hear about these days is personalisation…

But is it really that important? Turns out, for the millennial consumer, it certainly is.

According to a study by consulting firm Rare, 52% of Gen Y respondents said personalisation is important to their sense of brand loyalty (a higher percentage than their older counterparts).

Additionally, research from Colloquy found that millennials are more likely to disengage from a loyalty programme if they receive generic or irrelevant communications. 63% of respondents in a NewsCred survey said they prefered branded content that was tailored to their cultural interests. Content tailored to their location and age also garnered a positive response.

So to avoid turning millennial consumers off, make sure you personalise the content you send, the products you promote and the rewards you offer.

2. Make participation in your programme enjoyable

For millennials, truly engaging loyalty programmes aren’t just practical – they’re also fun. In the Colloquy study above, 34% of millennials described their favourite loyalty programme as “fun”, compared to 26% of the overall respondents.

And in the Rare Consulting survey, 60% of millennials aged 22 – 35 described their favourite brand itself as fun. Younger millennials (aged 16 – 21) were even more likely to say this.

So to appeal to Gen Y, make it easy and enjoyable to redeem rewards. In fact, successful reward redemption is an essential part of keeping any loyalty member active. Research has found that the experience of a successful redemption makes members more likely to try to redeem another reward.

And successful in this case doesn’t just mean they reached their reward – getting there needs to be a simple and enjoyable process. When redeeming the reward is fun, people are more likely to try to do it again – in other words, they’ll keep spending to earn more points.

To make a programme especially appealing to millennials, consider how you can incorporate elements of gamification throughout. When earning points and interacting with the programme is almost as good as the reward itself, your millennial consumers will keep coming back.

3. Invest in the causes they care about

This is one thing about millennials that everyone seems to agree on: they prefer brands that are “good citizens”.

From sustainable production practices to community initiatives, Gen Y loves companies who care about the social issues and causes that matter to them.

In a SquareSpace survey, over 85% of millennial consumers said their decision to buy from and recommend a brand was linked to the company’s social responsibility efforts. Additionally, Nielsen found that 73% of this generation would pay more for products from a “sustainable brand”.

So what does this mean for your loyalty programme? Reward millennials by rewarding the causes they care about – and get them in on the action. For example, you could donate a certain amount of money for every 1000 points they earn. Offer three or four different charities and allow them to choose which one they’d most like to support.

They’ll not only feel like your company is supporting the causes they care about, they’ll feel like you’re doing it together. And that builds the positive emotional connections that drive long-term loyalty.

4. Reward them with experiences that create value

It’s fairly common knowledge that millennials value experiences. Fueled by “fear of missing out” millennials often seek to do and participate rather than own – and then share evidence of these experiences on social media.

One study found that 72% of millennials prefer to spend their money on experiences rather than products. And according to Synchrony Financial, 69% will pay more for experiences that provide value.

‘Unique’ and ‘exclusive’ experiences add value to the relationship with your brand. So, reward millennial loyalty members with experiences that make them feel like a VIP – whether that’s premium tickets to a nearby concert, or simply a consulting session with an expert related to your product or service.

In the hospitality industry, 32% of millennials said “unique experiences” were important in a hotel loyalty programme, compared to 14% of their older counterparts.

LoyaltyOne found that 79% of millennials would value a personal styling session as a loyalty benefit from a clothing store, while 77% said a session with a tech expert would drive them to purchase more at an electronics store.

Consider what exclusive benefits and rewards you can offer to your loyalty members – and make sure they’re primed for sharing on social media, so millennial consumers can show off their unique experience to their friends.

5. Meet them where they are – namely, on social media

These days, “omnichannel” is not the overhyped buzzword it once was – it’s just reality. And that’s especially true for millennials, who grew up with an ever-increasing number of digital channels to choose from.

A study from SDL found that 58% of Gen Y expect that brands will interact with them on whatever channel they prefer – and whenever is the most convenient for them.

And according to NewsCred, social media and a company’s own website are the channels of choice. A survey by Elite Daily found that 62% of millennials say they’re more likely to become loyal to a brand that engages with them on social networks.

What does this mean when it comes to loyalty programmes? Two things – consistency and community. First, make sure your loyalty comms and online loyalty portal are easily accessible and delivering the same experience on every channel.

Then, find ways to incorporate social community into the programme itself. Offering rewards or loyalty points for social interaction is a great way to encourage engagement. According to Aimia, 44% of millennials would promote a brand to their friends and followers on social media in order to earn a reward.

Making loyalty personal

The truth is, a one-size-fits-all loyalty programme isn’t going to work for the millennial generation. Some will still prefer discounts over experiences, some will refuse to interact with brands on social media, some will never be loyal brand advocates.

But hopefully, these stats reveal some consistent trends that will help you build a more millennial-friendly loyalty programme – one that can be tailored to each individual. Ultimately, that’s the kind of approach that will resonate with the next generation.


Want to create personalised loyalty programmes that engage the next generation of consumers? Our Horizon Loyalty Hub can help. Find out more →

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