February 7, 2020Loyalty Strategy, Loyalty Trends, Personalization, SmartJourney®
Generational Loyalty – From Boomers to Gen Z
Customers join loyalty programs to save money, obtain rewards, earn status or even receive exclusive benefits. Essentially, they expect to see a value that exceeds the costs required to sign up and remain in the program. However, with four distinct generations making up the collective spending market, it can be difficult to design and manage a program with a clear value-add that resonates across multiple generations. Here’s a deep dive into generational loyalty: how generations are motivated, what they want and how you can speak to them.
Of the four generations that have spending power in the market, Gen X is talked about the least, but shouldn’t be overlooked. Gen Xers, while making up the smallest generation, tend to have the highest disposable income and can be fiercely loyal to the brands they love. However, they are busy juggling career and family life, and may not have the time to go on a spending spree. As Gen Xers are time sensitive, they are looking for programs that require minimal action. Keeping enrollment processes simple with easily digestible program rules and redemption policies increase the likelihood that Gen X will join. Because many have families to provide for, Gen Xers are also keen on finding good deals that will make their life easier – they are, in fact, the generation most likely to redeem for gift cards in a loyalty program2. Plain and simple, loyalty programs must present convenience and cost savings for this generation.
Baby Boomers – 1946 – 1964
For Baby Boomers, loyalty programs historically meant punch cards, coupons and vouchers. Fast forward to today, simplicity and practicality are key for this generation, with coupons and cashback remaining king. While many brands are finding ways to use technology in their loyalty programs, Baby Boomers are fine with traditional “buy X get Y” program designs; 74% of Baby Boomers surveyed saying that they are highly interested in obtaining product coupons for completing actions in a program over other rewards1. Boomers are initially more interested in a transactional relationship with brands they love, where they spend money and are rewarded accordingly. Although they are looking for a discount, continued brand loyalty comes from great customer service; in fact, 54% of Baby Boomers are unlikely to return to a store due to lack of appreciation from sales associates. And while many companies are looking to technology to improve customer service, incorporating things like chatbots aren’t necessarily going to make communication with this generation easier – 62% believe that chatbots are unable to answer complex questions. To maintain loyalty with Baby Boomers, brands should rely on already established communication channels such as direct mail and media spend to build those relationships. As long as Baby Boomers are presented with clear value and good customer service, brands can expect this generation’s loyalty to remain strong.