By Brandon Logsdon (Marketing Insights)
It’s quite possible that the commonly accepted storyline about millennials and their unique marketplace behaviors isn’t the whole story.
Yes, they’re choosy about brands, but they’re also more willing than older generations to switch brands if they can save money by doing so.
Yes, they might fit the definition of non-materialistic consumers who are not as likely as their parents’ generation to own houses or purchase cars, but they nonetheless self-define as heavy drivers who are eager to save money on the cost of fuel.
Yes, they often say they’re guided by altruistic principles when choosing favored brands, but according to a 2015 loyalty survey by Excentus, they are just as likely as Generation X (35- to 54-year-olds) and baby boomers (55 and older) to join rewards programs because they can save money, earn points/rewards from their everyday purchases and create wiggle room in the household budget by saving on the everyday cost of gasoline, regardless of prices at the pump.
Source: The Road to Rewards: What Drives Millennial Loyalty?
The results emerge in a 2015 Excentus survey of more than 1,000 U.S. consumers about their attitudes and behaviors toward loyalty and rewards programs—which ones they join and why, how actively they participate, the frequency with which they interact and redeem and incentives that might convince them to switch loyalty, behaviors or shopping habits to earn and save even more.
For marketers, the survey reveals interesting attitudes and behaviors among 18- to 34-year-old millennials, a demographic whose estimated 80 million-plus members represent 25% of the U.S. population and generate more than $200 billion in annual spending.
Millennial Loyalty
A key insight from the survey involves brand loyalty. More so than Generation X and boomers, millennials indicate a willingness to switch brand allegiance (80%) or shop at a different store (78%) if the switch would enable them to earn rewards they can redeem on gasoline purchases. In addition, more than half (56%) would shop at a different grocery store to save on fuel. By comparison, 69% and 59%, respectively, of Generation X and boomer shoppers were willing to change brands, 64% and 51%, respectively, would switch retailers and 46% and 41%, respectively, would choose a different grocer.
SEE ALSO: Why You Should be Marketing to Gen X
In essence, millennials showed that their loyalty to discounts is stronger than their loyalty to brands if the result is higher, more valuable rewards. Only 5% of millennials say they join a reward program as a “way of supporting a favorite retailer or brand.” It’s a finding that marketers can leverage when trying to determine which messages will resonate best with millennials and why. Keep in mind that millennials were raised on the internet and entered the workforce in 2008 just as the global financial crisis emerged, making them somewhat of a penny-pinching audience willing to make whatever moves are offered to save money.
Source: The Road to Rewards: What Drives Millennial Loyalty?
Survey results also provide more insights into millennials’ behaviors and preferences:
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Millennials rely nearly equally on retailer/brand coupons (26%), fuel savings rewards (25%) and instant cash register discounts (23%) as their favored loyalty programs for saving money. More than older consumers (tied at 4%), millennials join rewards programs because they were offered an incentive (9%).
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Not surprisingly, given their upbringing and tech-savvy tendencies, millennials are more plugged into technology and the internet than older consumers. Thirty-three percent check their loyalty program rewards on a mobile app (versus 16% of Gen X and 6% of boomers). Twenty-seven percent keep track via smartphone or tablet (versus 14% of Gen X and 7% of boomers), and 7% check from a wearable device, such as an Apple or Samsung watch (compared to 2% of Gen X and 0% of boomers).
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Even though nearly one-quarter of millennials (22%) say they do not own a car, they are more likely (26%) than Generation X (19%) and boomers (13%) to describe themselves as heavy drivers who join fuel savings rewards programs to save on the cost of gasoline.
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Millennials are more than twice as likely (19%) as Gen X (8%) or boomer (7%) consumers to join a fuel savings reward program based on a family member’s or friend’s recommendation—a finding that makes them ideal candidates for referral programs, ambassador programs and social media initiatives built on reviews, advocacy, networking and shared interests.
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Across the board, consumers who earn fuel savings rewards do so primarily from grocery store loyalty programs (68% on average, regardless of age). Millennials show their individuality by spreading their rewards-earning behavior among grocers (60%), retail store programs (30%), oil/gas brand credit cards (26%), travel programs (14%), professional/industry associations (14%) or restaurant/dining programs (12%).
Source: The Road to Rewards: What Drives Millennial Loyalty?
Key Takeaways for Marketers
Millennials are open to supporting new brands and retailers if the benefits that await are everyday relevant, convincing and budget-friendly. They’re tech-savvy, meaning they will demand mobile services and capabilities from their favorite retailers and loyalty programs, which will force brands to the next levels of technology, mobility and real-time interactions. And because of the value millennials place on their connections with others, they’re ideal candidates for marketing programs and initiatives that take advantage of the mobile environment, social media, peer influence and the collective wisdom of the internet-connected crowd.
