Innovating millennial loyalty
Regular customers appreciate being recognized and rewarded for their repeat business, and loyalty programs typically offer discounts or exclusive deals to a retailer’s regular customers.
Many programs pretty much follow the same tried-and-true script: Make a purchase, get a reward.
Generally, those rewards are points that can be accumulated and spent or applied as a discount.
The oldest loyalty program is Betty Crocker's box top program, which debuted in 1929, and laid the foundation for today's loyalty programs.
But the times they are achangin', and brands know that the loyalty rewards programs of yesterday may not have what it takes to compete today.
Easier to earn, more fun to spend
Innovation is key to attracting and retaining customers, especially millennials, with rewards programs.
The hospitality segment has several creative programs.
For example, the Marriott Rewards program gives guests opportunity to earn loyalty points just by posting about their visits on Twitter, checking in on Facebook, or posting a picture on Instagram using a predefined hashtag.
Hotel chain Citizen M offers extras such as free on-demand movies, 10 percent-off each booking, free Wi-Fi and drink tickets which can be exchanged for free libations at the lobby bar.
Changing consumer sentiment
Whereas earlier generations may have had patience for collecting Betty Crocker's box tops, a majority of millennials do not.
Kobie Marketing's report, Loyalty in the Age of the Connected Consumer found that 4% of millennials won’t join a loyalty program if they consider the enrollment process for a loyalty program too time consuming.
They also want to reap the benefits quickly.
Accenture estimates the generation spends $600 billion annually, so crafting a loyalty program that appeals to millennials could indeed be profitable.
Traditionally, these programs have regarded customers with discounts.
But today, brands are learning that millennials prefer "experiences" to a discount punchcard.
Exclusive events or promotions are particularly attractive to young adults and is what drives successful loyalty programs such as Starbucks.
The coffee purveyor delights shoppers with music downloads, games, exclusive deals, advance notice of seasonal products and, of course, the occasional free coffee.
The variety and frequency of rewards encourages repeat customers.
Future of loyalty
Loyalty programs have enjoyed a long, rich history primarily because retailers have recognized shifting customer priorities and have adapted their rewards as appropriate.
While loyalty programs of the past have been viewed as a system to reward shoppers for simply making a purchase, the loyalty programs of the future leverage historical customer shopping patterns to entice repeat purchases and increase ticket values.
For many Millennials and Gen Z customers, even that won't be enough.
These customers have been exposed to social media, streaming digital media, and online shopping for nearly their entire lives.
With this comes an expectation to not only receive offers, rewards, and content personalized to them, but also that these offers be delivered via their preferred touch points (i.e. email, text message, social media, etc.)
Brands that want to continue to grow and include the millennial shopper will expand their loyalty strategies that highlight engagement, personalization and convenience.
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