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Gen Zers are incredibly brand-loyal—so why don’t loyalty programs work?

by | Jun 12, 2018 | Marketing, Public Relations

The generation most likely to make loyalty-driven purchases has the fewest active loyalty program members, while Gen X shoppers are the most likely to join loyalty programs—indicating an opportunity for loyalty marketers to engage this active generation.

According to a new study from Kobie Marketing, only 15 percent of Gen Zers reported being actively engaged in three or more loyalty programs, compared to the consumer average of 41 percent across all age groups.

The firm’s Loyalty in the Age of the Connected Consumer report reveals key differences across generational preferences for loyalty programs and illuminates the factors that appeal to today’s connected consumer. The research found that almost a third (28 percent) of privacy-aware Gen Zers cite exposing too much personal information as a reason for not joining loyalty programs, demonstrating an imperative for transparency from brands who wish to appeal to the youngest generation of consumers.

Gen Zers are incredibly brand-loyal—why don’t loyalty programs work?

“Our research provides a snapshot of current consumers’ expectations and preferences around shopping and brand loyalty,” said Dave Andreadakis, chief strategy officer at Kobie Marketing, in a news release. “Gen Zers are cautious, digitally savvy consumers who work hard. They’re loyal to the brands that communicate with them on their terms, brands who provide clear value and respect their privacy. For marketers who can deliver genuine experiences to this emerging cohort of shoppers, there is plenty of opportunity to strengthen relationships with them and cultivate brand loyalty.”

The same report found that the oft-overlooked Generation X is the most likely to belong to and partake in in loyalty programs

In fact, almost two-thirds (62 percent) of Gen Xers are members of three or more programs. Gen Xers are also more engaged program members, with 51 percent actively earning and redeeming points in at least three programs.

The report’s findings reveal a key opportunity to engage this underappreciated cohort of shoppers by delivering on the quality they’ve come to expect. In fact, almost a third (31 percent) of Gen Xers cite quality of products as the most significant factor in their decision to shop with a brand again.

“While consumers are united in their preference for simplicity and convenience, we know that different types of programs work for different segments of shoppers,” said Andreadakis. “Beyond generational differences, consumer life stage, societal trends and the adoption curve for new technologies all intersect to drive individual consumer behaviors. To create experiences that convert buyers into loyal customers, marketers must also move beyond a one-size-fits-all approach.”

Gen Zers are incredibly brand-loyal—why don’t loyalty programs work?

Other key findings from the report include:

  • Seventy-five percent of consumers across age groups actively earn and redeem rewards in three or fewer programs.
  • Baby boomers and those from the Silent Generation are most likely to join a tender-neutral loyalty program, with 36 percent ranking it among their top three loyalty model preferences.
  • Millennials value convenience (28 percent) and access to discounts (78 percent) most, higher than any other generation.
  • Gen Z is more open to receiving information from brands through YouTube than other generations (20 percent vs. less than 6 percent for all other generations).
  • Thirty-one percent of Gen X and baby boomers feel that quality is the most significant factor when it comes to brand loyalty.

Download the complete report here.

The report is based on a survey of over 1,000 consumers to gauge the role that timing, information and delivery channels play in their overall decision journey. Respondents were evenly distributed across age ranges, which were defined as Generation Z (ages 19-21), millennials (22-37), Generation X (38-52), baby boomers (53-71) and the Silent Generation (72+).

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Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 12 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richardc@bulldogreporter.com; @BulldogReporter

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