Why Loyalty Programs Are Vital to Millennial Consumers

Millennials are a new breed of consumer. We have grown up with brands shouting at us to: “buy this!” and “use this product!”

We millennials have been bombarded with advertisements throughout our life, in addition to a surplus of brands to pick from. While many would assume that choosing a brand is only about the product or service, millennials would disagree.

We believe in the personality of the brand, the values they bestow, and what can they offer beyond their products or services. Here is how brands retain millennials’ attention:

Millennials Stay True to Their Brands

When purchasing a product or service, my first thought is always, “Can I buy this from one of my go-to brands?” My go-tos are brands I have purchased from previously and had a pleasant experience with during my buying decision. An initial buying decision is heavily influenced by the brand’s website and social media presence, with over 50% of millennials exploring brands on their social network platforms. In addition, brands are utilizing brand loyalty in order to reach millennial audiences. This usually includes marketing emails that send out coupons for “being a loyal customer.” A staggering 95% of millennials appreciate brands that send coupons and discount notices via email. This bracket of consumers who enjoy getting discount emails from their favorite brands feel a sense of trust and appreciation by brands, and might be why they continue to come back.

How Did Brand Loyalty Begin?

The beginning of modern brand loyalty began in the 1930’s with Betty Crocker’s box top. The General Mills brand created a unique way for the brand to contribute to the community through the concept of buying their products and giving back to education. Since then, many companies’ mission statements reflect a sense of “giving back” such as the once popular brand, Toms One for One Movement, where every pair of shoes purchased, another pair would be given to a person in need. Millennials tend to resonate with brands that support social and environmental causes and create a sense of purpose.

Value Over Rewards

In the 90s and early 2000s, brands created loyalty cards to bring consumers into their stores, earning points as they go. Focusing solely on the transaction of purchases, brands had a simple marketing technique. However, now millennials are used to being “sold to” on every platform and are looking for something more. Recent data indicates millennials prefer one-of-a-kind brand experiences. And, the data is right. We value specifically targeted content such as free products, exclusive access to sales, or even a happy birthday email (a free gift is always a good idea).

So, What’s the Secret?

Successful millennial-dominated brands have incorporated the points system while retaining customer personalization. Starbucks, for example, maintains the classic point/reward system, but also integrates an app with personalized content such as music streaming and “just for you” new drinks to try.

Luxury makeup brand, Sephora, has an interactive app where consumers can virtually try on the products and access exclusive in-app purchases. The app also incorporates the Beauty Insider loyalty program, which consumers can use to earn points through purchases that directly translate to products and exclusive makeovers. Sephora shows consumers they will reciprocate the loyalty. This makes me more likely to purchase products from them versus another store who sells the same product at the same price.

Why This Online Shopping Site Has Me Hooked

Amazon takes the cake for loyalty programs. They offer unlimited free shipping on select items, free TV shows, and movies. Millennials expect ease and efficiency, and Amazon makes it easy by integrating two-day shipping, saved contact and credit card information. They even give you the option to shop for your groceries online. At $100/year, I jumped at the opportunity to do all my purchases without leaving my couch. As a millennial, I encourage brands to hop on the brand loyalty bandwagon. By 2020, millennials are projected to spend 30% of the total retail sales. That’s a whole lot of loyalty.

Let’s talk.