71% of millennials agree that their loyalty is more difficult for a retailer to maintain than ever before.
This year, they’re positioned to pass Baby Boomers as the biggest generation in the U.S., so millennials are an important group for retailers to win over.
But it’s easier said than done. Millennials are the first to admit that their loyalty is harder to earn than the previous generation. And as a millennial, I agree with that.
Luckily, premium loyalty programs offer an opportunity to win over the increasingly valuable millennial shopper.
Here’s why they are so appealing to millennials like me.
Millennials Grew Up Differently
The expectations of millennials (and consumers in general) has shifted very heavily.
Instant gratification is a big part of it. Cars, meals, and concert tickets are all a click away. While millennials remember going to a video store to rent VHS tapes, they experienced the shift to streaming services like Netflix.
I remember my mom and I using a phone book to find a local pizza place and then calling them to place a delivery order on a phone that was actually plugged into the wall. Also, delivery seemed to be limited to pizza and Chinese food.
Now, with a few swipes and taps on my phone, I can order almost any meal, including ice cream, and have it delivered to me within minutes.
This shift in technology is what changed the expectations of the millennial consumer. Whether it’s food or entertainment or rides, we want everything right away.
That same expectation goes for loyalty programs.
We don’t want to have to collect points to get benefits. What’s the point in that? We’d rather join programs that provide value all the time. For example, one can combat their sad and lonely life by receiving the benefits of anytime custom entertainment – thanks to Netflix.
In fact, 50% of millennials expect to receive benefits from premium programs every few days.
And much like services such as Netflix and Spotify, we’re willing to pay for that value upfront.
Millennials Spend Differently
Some people might think of millennials as the generation to waste money on things like avocado toast and festively classy ties for our dogs rather than make big purchases like houses. But we’re very conscious about where we spend.
A majority of millennials search for a coupon before making a purchase. We like saving some money where we can since rent costs are killing us.
According to Forbes, millennials focus on discounts when shopping, but also stay loyal to brands they currently purchase from if treated well through customer-centric experience.
What if a brand could simply offer discounts or cash-back on every purchase so millennials didn’t need to spend time searching?
Premium loyalty programs check those boxes.
Transactional benefits like instant discounts that can be used anytime people shop are usually the first types of benefits that members experience.
And unlike a traditional loyalty program that requires people to transact first and get rewards later, premium loyalty programs offer members valuable discounts whenever they shop.
Eighty percent of millennials agreed that they would be willing to join a premium loyalty program if their favorite retailers offered them and the benefits were valuable to them.
It all comes back to value.
Premium loyalty programs, when done right, provide the value that millennials are looking for.
A program that works to provide benefits as soon as a user joins rather than wait for a transaction to occur is the answer to acquire, retain, and maintain millennial loyalty.
Millennials Want Exclusivity
If one thing is for sure about us millennials, it’s that one size does not fit all.
The fuel of the internet is relatability. The way consumers are connecting is through pictures, stories, and videos (and memes) that they can relate with and build emotional connections with. The same goes for the brands we follow.
You can use this same formula when it comes to premium loyalty programs.
Yes, these programs have transactional benefits that can be instantly used and at any time. But making someone feel part of a club, or a group that’s exclusive, will increase the emotional connections and relatability with their “exclusive” peers.
Lululemon is a great example of this.
The company has been slowly rolling out its premium loyalty program which costs more than $100 per year.
There are transactional benefits like free expedited shipping and exclusive products that make the value proposition worth it alone, but the experiential benefits really make members feel special.
Members-only access to yoga and fitness classes have been very successful. These are lifestyle experiences that regular customers don’t get.
What gets people to connect and relate with one another is commonalities among their personalities. This benefit makes that group feel special and engage more with the brand.
Surveys show that 60% of millennials prefer to make purchases that they feel are ways to express their personalities.
Creating a connection with a millennial consumer requires a brand to speak to that consumer on that personal level, thus growing a connection with that consumer.
Premium Loyalty Programs Meet the Expectations of Millennials
Premium loyalty programs offer an opportunity to win over the increasingly valuable millennial shopper.
While millennial loyalty may be harder for retailers to earn and maintain, millennials are more open to the idea of premium loyalty than their counterparts in other generations.
Eighty percent would be willing to join a premium loyalty program if their favorite retailers offered them and the benefits were valuable.
So, what are you waiting for?