What does it take to earn Millennials’ loyalty?

What does it take to earn Millennials’ loyalty?

By Alex McEachern, Customer Loyalty Specialist at Sweet Tooth Rewards

Through a special arrangement, what follows is a summary of an article from COLLOQUY, provider of loyalty marketing publishing, education and research since 1990.

I have heard every stereotype under the sun for my generation. We are lazy, have no work ethic and the attention span of a peanut. We are entitled and can’t disconnect from our phones.

These perceptions are not necessarily all false, just embellished. You may think my generation will only bounce between brands, but a well-tailored loyalty program can attract — and retain — Millennials.

  1. Don’t tell us, show us: In-your-face advertising is completely lost on Millennials. We all have ad blockers, we don’t watch traditional media and we hate being told what to do. Don’t try to ram your program down customers’ throats. Don’t try to chase us around the internet with retargeting and paid ads. Make your program visible, present the benefits and make it compelling enough for us to want to join.
  1. We are social and proud of it: We share every aspect of our lives on social media. We don’t just use social media to share what we are up to; we use it to consume information and news. So first, promote the loyalty program via social media and then use it to expand your program’s reach. Millennials love to share; we just need a reason.
  1. We have short attention spans: Millennials are not lazy. But growing up with computers, the internet and mobile apps means we have little patience to learn something new. Make your program visual. Keep visuals at the forefront of design and use them to explain your program. Outline the benefits, as well as how members earn points and what rewards they can get. Simply saying “sign up for bonus points” is going to be lost on Millennials. We like to be informed.
  1. We value status rewards: Some might call us entitled and this is semi-true. As a generation, we strive to do better and have more than our peers and our parents. A tiered program taking advantage of gamification can move customers into different tiers based on objectives or milestones — for example, awarding members “silver” status when they purchase $500 in a year and “gold” at $1,000. Playing on our desire to be the best can encourage extra spending and engagement.

BrainTrust

"There's a good chance that this more demanding generation will insist on transparency and meaningful interaction with the brand."

Cathy Hotka

Principal, Cathy Hotka & Associates


"However, in addition to Millennials feeling a level of importance as a customer, they need more transparency about your brand from your leaders..."

Lesley Everett

CEO and President, Walking TALL Training & Consulting, Inc.


"The idea of consumer “loyalty”—be it Millennials’ or otherwise—has been under fire with the advent of easy, frictionless 24/7 information access..."

Mohamed Amer, PhD

Independent Board Member, Investor and Startup Advisor


Discussion Questions

DISCUSSION QUESTIONS: Which of the tips offered in the article is most important when it comes to successfully engaging Millennials with loyalty programs? Are there any suggestions you would you add? Are these suggestions any less applicable to other generations of consumers?

Poll

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Max Goldberg
7 years ago

Most loyalty programs would fail all or most of the points outlined above. In fact most are irrelevant for consumers of any age. Loyalty programs have become routine. They gather data while giving consumers few valuable rewards. Airline seats are not available. CVS still has to define why its program matters, other than to the paper companies that supply its rolls of register tape. Most grocery programs are meaningless, other than to show consumers how foolish they are to pay full price. Retail can and should do better.

Gene Detroyer
Noble Member
Reply to  Max Goldberg
7 years ago

I could not have said it better. Perfect!

Jasmine Glasheen
Member
7 years ago

Millennials are value-based shoppers, which means two things:

  1. We shop with our values in mind. We are more aware than any generation that came before us that we vote with our dollar. What does your company stand for?
  2. Increasing retail transparency also means that we know what your competitors are charging. Can you compete on price? If not, we are going to need some loyalty perks in order to stick around.
Shep Hyken
Active Member
7 years ago

All of the tips in the article are appropriate for engaging Millennials. There is one that I would add, and that is to make them feel a part of something. I’ll never forget when one of my employees said to me, “I am a typical Millennial. I don’t want to just enjoy my job. I want to feel as if I’m needed here.” So how can a retailer make a Millennial customer feel needed? No, I’m not talking about needing them to buy what we sell. Be a part of a cause and ask for their help. Ask them to engage in community forums, as their opinions count. Come up with different ways to make them feel like they are more than just transactional customers.

Kim Garretson
Kim Garretson
7 years ago

I would add:

5. Treat us as individuals, not as consumers. Growing up in the computer era, we know when you are using predictive technologies based on our past behaviors to guess at what we might be interested in. When we get an email subject line like the following, we know you are following us around without our permission: “You looked at it three days ago, now here is a promotion for it.” Instead of creeping us out like this, just ask us for our consent to market to us on criteria we set for helping us save time, maybe money, and giving us the tools to make smarter decisions for our own unique and individual lives.

Ian Percy
Member
7 years ago

I agree with the first three points with this caveat: they describe how Millennials tend to behave and experience the world, but they do NOT describe a loyalty strategy by any stretch. They simply describe how Millennials work and if you want their attention at all, this is how you play the game. Zero to do with loyalty — that is a past-generational concept. Maybe two generations ago. I heard a very senior General on CNN this morning describing how we should apply a WWII strategy against ISIS. That is what many marketers are doing in the retail war.

The fourth point kind of confirms what I just said about applying an old model. Way back when Amex created the various levels of credit cards we all admired people who had “a gold card” not realizing that they just paid more for it and had higher debt. It also meant you ended up buying lunch more often. A phony “status” does not impress any one. Millennials aren’t clamoring to be “the best” … they’re clamoring to be themselves. So should we all.

Lyle Bunn (Ph.D. Hon)
Lyle Bunn (Ph.D. Hon)
7 years ago

“Ich bin ein Millennial” (I am a Millennial) John F. Kennedy might have said if addressing a retail conference, picking up on his quotation from a June 26, 1963, speech in West Berlin. Retailer rewards for appealing to this demographic, who are at the beginning of a lifetime of consuming, apply to all consumers. If it is a call to action or investment justification, onward retailers!

Cathy Hotka
Trusted Member
7 years ago

I’m with Max on this. Many “loyalty” programs have inscrutable benefits — that grocery program is there only to save you from spending $9 for a box of cereal. There’s a good chance that this more demanding generation will insist on transparency and meaningful interaction with the brand. Imagine the benefits to the retailers who think more creatively.

Roger Saunders
7 years ago

Alex McEachern offers several truisms for consideration about Millennials. Perhaps the most important is the comment about “stereotypes.” During the upcoming Fall and holiday gatherings, we’ll all have occasion to witness examples of various generations who cannot quite comprehend other generations’ point of view, be they Traditional, Boomers, Generation X, Millennials or even the emerging Generation Z. When we can’t quite “get it,” being human we drop our conceptual and critical thinking and fall back on the safe stereotype.

That’s when we miss our mark.

When it comes to retail, we’re best to keep in mind that generational segments do want, and expect, to be listened to. Our attention spans are not short, we have numerous choices presented to us and we want to be delighted in our power to make our own decisions.

Best to keep in mind a few tactics for the balance of the year. The market is stretched. Competition is tough. We have to listen to and know our customers and prospects. We have to support the associates within our organization.

In order to win, Retailers will have to focus teams on execution — show up on time, do what we say we will do, finish what we start and say please and thank you.

Adrian Weidmann
Member
7 years ago

I have a hard time believing any loyalty program using the tips mentioned above would prove successful. We’re still trying to force old “analog” marketing tricks to digitally native shoppers. I would suggest building your brand on a foundation of true and demonstrable social responsibility (e.g., Toms) and awareness to engage Millennials and beyond. Clever tricks simply won’t (and don’t) work. Stand for something real and meaningful and Millennials will reward you with their wallets (e-wallets!).

Ian Percy
Member
Reply to  Adrian Weidmann
7 years ago

You said it better than I did, Adrian. Exactly the point.

Lesley Everett
Lesley Everett
7 years ago

All are important points in gaining Millennial loyalty and trust. However, in addition to Millennials feeling a level of importance as a customer, they need more transparency about your brand from your leaders and in terms of social responsibility. They want to work for ethical companies and this can shine through (or not) via the executive team being more visible and authentic — perhaps a new wave of branding is getting the execs out of their offices more, giving the brand a sense of personality.

Patricia Vekich Waldron
Active Member
7 years ago

Millennials are not really that different — we all want to be recognized and to feel valuable. The vast majority of current retail loyalty programs just don’t provide that.

Doug Garnett
Active Member
Reply to  Patricia Vekich Waldron
7 years ago

There have been a couple of great surveys on this topic — especially a good one looking at “what do you want from work?”… And despite a lot of hype about Millennials, it turns out “they” want from work exactly what everyone else wants.

The solid marketing professionals I know who have followed all the Millennial testing have concluded we should walk away from any idea that they’re different as an entire group. It’s far more important to figure out what gets people to take the action you want (shop at your store, buy your product) and ignore the generations.

Gene Detroyer
Noble Member
7 years ago

For this generation, it is all about transparency. They have seen their parents fall for the boasts of advertising and brand marketing. They know how much of it is B.S. That is why the social factor is so big.

Dear marketers; make good products, deliver value and truth and you won’t need loyalty programs.

Ralph Jacobson
Member
7 years ago

There are myriad articles on how and why Millennials are not all alike. I still believe this to be true. A key mistake marketers can make is to target them equally as a single persona. In fact, you’ll find that Millennials and boomers are more alike than not. Nevertheless, I do see the point of this article. I would also add that many people in this age demographic tend to show brand loyalty to a vital few retail and/or CPG brands that truly matter to them. Loyalty is not dead. Millennials continue to prove this with their favorite tech brands, etc. Retailers and CPG companies can leverage these trends with intentional digital marketing campaigns that do not lump all Millennials together.

Gene Detroyer
Noble Member
Reply to  Ralph Jacobson
7 years ago

I don’t dispute the comment “you’ll find that Millennials and boomers are more alike than not.” However, there is fascinating research that indicates that for the first time ever, Millennials’ values set is closer to each other around the world than to their parents.

Doug Garnett
Active Member
Reply to  Gene Detroyer
7 years ago

I disagree. The solid research I’ve read indicates that desires and hopes among Millennials match other generations — and are simply hopes of the young. My generation had them, the next generations all had them. Now the Millennials have them, but are quickly changing as their lives change. Life determines these issues far more strongly than generation.

Gene Detroyer
Noble Member
Reply to  Doug Garnett
7 years ago

Doug, I am referencing values. Millennials have rejected many values of the preceding generations and their now value set is more likely to match a value set of a Millennial across the world than an older in their own country.

Ross Ely
Ross Ely
7 years ago

Retailers should focus on building a fundamentally great loyalty program rather than chasing the fad of “what Millennials want.” While the author would like to believe that Millennials are a completely new generation, the reality is that Millennials are people and want the same value, convenience and benefits as their older counterparts.

Retailers should present a modern face to shoppers and take advantage of the latest technologies in digital, web, social and mobile media. However, it’s more important to deliver the fundamentals of a great loyalty program that appeals to all generations as opposed to getting carried away with Millennial psychology.

Mohamed Amer
Mohamed Amer
Active Member
7 years ago

What happens when long-standing assumptions of a perennially successful business practice lose their validity? Will the underlying concept also disappear?

The idea of consumer “loyalty” — be it Millennials’ or otherwise — has been under fire with the advent of easy, frictionless 24/7 information access and social sharing. Millennials symbolize this shift more so than any other generation. They will reward a brand or banner with authentic voice and behavior, based on how the brand lives out its vision and the transparency of its business practices and communications. This generation is not held captive by a Pavlovian marketing algorithm. Keep in mind that these are the same age cohorts that you’re hiring and preparing to lead your organizations in the coming decade. From the inside or the outside, organizational change is inevitable.

The world is changing, it’s up to those who recognize this to adjust their practices. In the near-term, this will not happen until they come to terms with a new way of thinking and viewing their customers. In the long-term, there’s no escaping the future. Then and only then will loyalty take on a new definition that operates on both sides of the ledger. It will be refreshingly liberating to the new breed of marketers and welcomed by all consumers.

Peter Charness
Trusted Member
7 years ago

I suspect that Millennials want the same things the rest of us do. They have grown up, though, in an age of constant “short” communications and almost infinite choices for everything. They also may not accept something “as-is” because they haven’t been habituated for years and years to current practices. So a “sale” that really isn’t one may be construed as a fraud, not just business as usual. So I would say loyalty programs need to be quick to understand, have meaningful and tangible value to “me” and must be presented through the communications mediums that are used the most. Hanging a tag on a key chain that collects points that can never be used probably isn’t the way forward.

Shawn Harris
Member
7 years ago

Autheticity delivered at the lowest possible price. Sprinkle in a bit of surprise and delight, make them say “WOW!” then they’ll be your social advocate. Repeat.

Tom Redd
Tom Redd
7 years ago

The attention span. It is short and fast to focus on things that are worthless. Mills are not lazy, they just waste time in their social pits vs ignoring their addiction and getting real work done. They are not social as a resource, they are addicted to a medium.

So leverage the addict side of them — feed the need via the right programs that are shared a lot. Lock in on the addiction and gain rewards. They live this way as the “spoiled and we expect it” generation, so work that angle — make is special for them — they expect that.

TRedd – Tired of the hardcore mills….

Christopher P. Ramey
Member
7 years ago

Loyalty is increasingly the absence of annoyance.

Each point list above and each point noted by my colleagues is important. It’s not clear to me that there is anything new here; it’s the evolution of retail and consumer behavior regardless of the year your customers were born.

Ken Morris
Trusted Member
7 years ago

I think the most important tip relates to Millennials’ pervasive use of social media and the opportunity this presents to retailers that do social media right! The key is to engage with Millennials the way they want to engage and with messages that are compelling. Offering compelling rewards and offers is the first step — without this, the loyalty program will be ignored by consumers. The silver bullet is communicating the program and its “unique” benefits on social media in a way that is fun and cool so that your followers will be inspired to share the message with their network of friends. This enables retailers to magnify the reach and exposure of the message exponentially.

Another suggestion I would add to this list is to keep the loyalty program fresh with new interactive games, contests and offers that keep the brand top of mind for consumers. Gamification will grab their attention like Pokemon Go. A one-and-done approach won’t work, as Millennials will shift their attention and spending to the next hot trend or shiny new object. Keep your customer guessing what the next new “thing” will be and continue to surprise them and you will earn their loyalty.