Report Shows Gen Z, Millennials Changing Loyalty
A new report released in March revealed that loyalty programs have a higher influence on gen Z and millennial consumer spend than on boomers—66 percent vs. 58 percent. The Loyalty Report 2018, released by Bond Brand Loyalty, a global customer engagement agency, indicated that gen Z and millennial consumers are changing loyalty, and are open to behavior tracking, paid loyalty and deeper brand engagement through technology. But, younger consumers are less satisfied with their programs (30 percent) compared to their boomer parents (49 percent).
Consumers spend more, advocate for and remain loyal to brands with loyalty programs that offer innovative personalized experiences in addition to points and discounts, the study showed. And, consumers spend 37 percent more with brands when they are a loyalty program member. The top five sectors in which spend increases when a consumer is a member of a loyalty program are gas with a 99 percent spend increase, hotel (82 percent), drugstore (63 percent), movie theaters (61 percent) and grocery (57 percent).
In collaboration with Visa, The Loyalty Report 2018 is recognized as the industry's leading report on customer engagement, loyalty attitudes, behaviors, drivers and disruption. The expanded 2018 global report, now in its eighth year, features an assessment of more than 800 loyalty programs in 18 markets, by more than 50,000 consumers across a range of key sectors, including payments, retail, grocery, CPG, gas, dining, hotel, airline, entertainment and coalition.
In addition, the report highlighted some areas in which brands can differentiate and improve the performance of their loyalty programs. The following is a brief synopsis:
- Embracing new loyalty currencies and experiences beyond points: For example, loyalty programs can set themselves apart by identifying customer preferences and experiences that can be tracked and then rewarded as alternate "currencies." And, a growing number of members (87 percent) stated that they are open to having various details of their activity and behavior watched, monitored and tracked in order to receive access to personalized rewards or engagements.
- Adding a paid loyalty program option can drive higher spend and satisfaction: For example, a growing number of consumers (37 percent, up from 30 percent in 2017), are willing to pay a fee for access to enhanced loyalty program benefits; and a willingness to pay for enhanced benefits is significantly higher among gen Z (47 percent) and millennials (46 percent), as well as households with children (44 percent) and early technology adopters (69 percent).
- New technology and increasing usage of existing technology leads to higher member satisfaction and engagement: For example, 95 percent of members want to engage with brands through a mix of new, emerging and growing tech, including augmented reality, virtual reality, card-on-file and more; members who have engaged with loyalty technology stated it has substantially improved their member experience.
- Meeting human needs is essential to improving the experience: For example, while technology offers a path to increased member engagement, human interactions are more critical than ever, and offer brands a cost-effective way to foster loyal relationships with members; and programs that establish positive emotional connections with members see 27 percent more of their membership increasing their spend with the brand.
For more information on purchasing The Loyalty Report 2018 and to download a free copy of the Executive Summary, go to www.bondbrandloyalty.com/loyaltyreport.