How do different generations feel about brand loyalty?
Everyone seems concerned with building brand loyalty among the millennial generation, and so they should, millennials form a significant part of the present and future customer base. However, as the oldest millennials reach 35 years old, there are still decades of potential customers, older and younger, who we must not forget.
Currently there are four primary generations with spending power, Baby Boomers, Generation X (born in the 60s and 70s), Generation Y (commonly born in the 80s and 90s and known as millennials) and Generation Z (born from the millennium onwards).
We covered the Boomers in a previous blog so here we will concentrate on the three remaining demographics.
Gen X is often branded as being cynical, yet they have the highest rate of loyalty of any of the generations discussed here. They’re less interested in trying new brands than other generations and instead prefer to stick with those they already know and trust.
They are a crossroads generation, able to remember the world before smartphones, but tech-savvy enough to make the most of digital technologies. Sixty percent of this group use a smartphone and 75 percent are on social media. This doesn’t mean they respond best to mobile marketing and loyalty schemes though.
The cynical nature of Gen X can be seen when they’re faced with strong or overt marketing tactics. Rather than being persuaded to buy from big-spend advertising, they prefer traditional adverts and options they can thoroughly research before purchasing.
What does this mean for brands hoping to gain their loyalty? If they can build a relationship with a Gen X buyer, they will have a loyal customer for life. To build that relationship, they should concentrate on traditional programs (think stamp cards) and marketing tactics such as exclusive offers. Above and beyond all of this, they should always offer exemplary customer service and support.
A key message is this: do not assume that every customer responds to a brands efforts in the same way. We know that while millennials are presumed to be the most brand-loyal generation, they are also highly selective and lean away from the traditional card-based loyalty programs.
Generation Y (Millennials)
As stated, brands are clamoring to win over millennials. The key to managing this is realizing and remembering that this generation thinks very differently than its parents.
The millennial generation is one that has been marked by a specific event, the recession. They were just coming into adulthood when the financial crisis hit in 2008 and it’s turned them into a frugal group. Tying discounts into loyalty is valuable when targeting them; 80 percent of millennials are willing to switch their brand allegiance if by doing so they can save money.
Millennials also want to feel special. Make them feel like a treasured individual and you can secure their loyalty – for a time anyway. This generation expects businesses, brands, and retailers to be loyal to them. If they don’t feel appreciated, they will move on. It’s not about them being loyal to the business.
Clearly, with millennials, personalized marketing and discounts or offers that appear relevant to them individually, are more likely to catch attention than generic, traditional broadcasts. If a brand targets them with an advert offering a discount on a product they order frequently, they’ll be onto a winner. And, the good news is that millennials are more likely than older generations to interact with their rewards program daily – especially if it’s mobile-based.
What we have seen so far is that Gen X are brand loyal and traditional in the manner that they respond to marketing and loyalty programs. Millennials, meanwhile, exhibit loyalty but expect companies to work hard for it, putting emphasis on personalization and discounts. Compared to these two groups, Gen Z is the disloyal generation.
Some say brands should throw out the rule book when it comes to Gen Z. That might be going a tad far but certainly they do require a unique set of engagement rules. These are the people who grew up in an entirely digital world; they don’t remember a time before WIFI and smartphones and consequently they process information at lightning fast speed. Anything slower loses their attention. They seek instant gratification and do not like to be made to wait, for anything!
Brands should recognize that Gen Z is in-tune with the world around it. Having been born into a post-9/11 society and seeing their parents struggle through the financial crisis, this is a group that understands that there’s hardship in the world. They are socially conscious and will be drawn to and loyal to companies/brands that reflect that attitude.
As Gen Z are digital natives, keeping their smartphone and social accounts at the center of their world, using these to communicate in an authentic way is essential. To build loyalty, brands should take advantage of their potential customers’ mobility and initiate one-to-one conversations, as well as gather data to learn about them and use it. Instagram and Snapchat are ideal platforms and many brands have seen great success engaging with this generation through bold videos and imagery. If a brand can encourage Gen Z to share a brand experience on their social pages they can help create positive memories that last, take seed, and grow loyalty in a natural way.
Given that the latter three of these generations mentioned above will control the wallet in coming years, it’s worth examining them thoroughly and asking: how does their attitude towards brand loyalty differ? How can you gain their loyalty?
Every generation deserves consideration when it comes to growing brand awareness. If you need help defining your brand demographics please reach out to Streng Agency and we will be glad to give you assistance. www.strengagency.com