Millennials hold a large portion of spending power, but organisations far and wide are struggling with their marketing strategies to gain their brand loyalty.
Businesses have quickly caught on to the fact that each generation of consumers requires a different marketing strategy. Up to this point, though, the best way to engage and retain millennial customers has eluded many executives.
A reason behind this could be the popular theory that the younger generation simply isn't loyal - roughly 40 per cent of management staff at retail organisations listed this as their top obstacle, according to Accenture. But this idea doesn't exactly hold weight.
Providing meaningful return
Advertising has been a staple in commerce for decades, but that style of marketing fails to resonate with millennials. Just 1 per cent of the generation feel a television commercial or newspaper ad would sway their purchasing habits, Forbes reported. Instead, 62 per cent told the source they would feel more loyal to brands that communicate and interact with them on social media.
Millennials are actually one of the more loyal customer bases, but earning that consumer devotion is where executives seem to get lost. The idea is simple in shoppers' minds though - they just want to feel appreciated.
"There is [something] about the product and its cost, but there's also a big part about being treated like a valued customer," an anonymous millennial told Accenture. "Loyalty programs are big."
Crafting the perfect program
Rather than spending money on advertising, organisations would be wise to build a comprehensive customer loyalty program. Instead of coupons or discounts, consider standing out from the crowd by creating real value for the consumer in the form of concert tickets, products or other services.
A payout cycle should be no longer than 30 days.
Companies that deploy a successful customer loyalty program will likely use a platform that allocates points to shoppers for reaching certain spending thresholds. Customers would then be able to track their progress toward a reward of their choice, rather than being told what they'll be awarded for their loyalty. This gives a customer base a sense of autonomy about its spending habits.
It's important to develop a payout structure that isn't too difficult to achieve, though. The average length of time millennials will wait to see a reward is roughly 30 days, according to Aimia's New Zealand Millennial Loyalty Survey.
Ultimately, clever advertising doesn't strike a chord with millennials as it did with generations beforehand. To generate customer loyalty, organisations have to be willing to provide value with the shopping experience, and a customer loyalty program does just that.
Interested in creating a customer loyalty program for your business? Contact a Power2Motivate representative today.