Millennials have shown to be one of the most brand-loyal generations.
In fact, only 1% of Millennials are impacted by advertising. Instead, they are drawn to memorable customer experiences. They have heightened expectations around customer service and make decisions based on how authentic their connections are with specific brands.
Millennials are enticed by the very essentials of a premium loyalty program: Convenience, value, and instant benefits.
We recently conducted our 2021 Premium Loyalty Data Study where we surveyed 2,500 consumers on how they feel about premium loyalty programs, what they expect from them, and more.
As we come out of the pandemic, customer loyalty is more critical than ever before. And a traditional loyalty program alone may not be enough to capture the hearts and wallets of your younger customers.
According to the data, here’s why launching a premium loyalty program could be the answer.
Younger Consumers Crave Instant Gratification
Did you know that 92% of Millennials would be willing to join a premium loyalty program if they already belong to a retailer’s free program?
In a premium loyalty program, your customers pay a membership fee to access exclusive, instant benefits that can be used 24/7/365. Unlike a traditional free or tiered program, there is no need to spend over time for rewards that come later.
This is an ideal scenario for your younger audience.
Since Millennials are largely viewed as the “instant gratification” generation, it stands to reason that they would be attracted to premium loyalty programs.
Marketers are listening and learning from Millennials.
In fact, below you can see from our data study how more popular premium loyalty programs are with younger generations:
Percentage of consumers who belong to any premium loyalty program, by generation:
- Gen Z: 70%
- Millennials: 77%
- Gen X: 78%
- Baby Boomers: 57%
- Over 74: 54%
Why Young Consumers Are Worth Targeting with Premium Loyalty
From a purely financial perspective, Millennials possess a spending power projected to reach $4 trillion by 2030. Their spending influence on the economy is an immediate attraction for retailers.
But from a practical standpoint, younger generations like Millennials and Gen Z are so used to the instant world of the social media and the internet that these programs make sense.
The thought of having to wait a week or more for a product to ship seems outrageous to this group. In fact, the study found that 64% of consumers feel free shipping is a benefit that would motivate them to join or a renew a premium loyalty program membership.
Younger generations are also more conscious of their spending. From growing up during a major recession to college debt, millennials don’t have the wealth that the previous generation had.
Therefore, building loyalty with them is critical.
Fortunately, the study found that 90% of consumers are likely to choose a retailer where they’re a premium loyalty member over another one offering a lower price.
Young consumers are growing up with advanced technology that makes shopping convenient and fun, so they expect things when they want them. And they want value and a personal connection with your brand.
They didn’t grow up with punch card loyalty programs designed to make members buy something for a certain amount of time before receiving a reward.
Premium loyalty checks all the boxes for young consumers: Convenience, value, and instant gratification.
Why Premium Loyalty Makes Sense with the Younger Demographic
Whichever way you want to describe young consumers’ behavior, one thing is quite clear: They want value and stellar customer service. Those ingredients are part of every premium loyalty program.
And they’re willing to pay for it.
Subscriptions services such as Netflix and Spotify were born during the Millennial generation and maybe that’s why they’re popular with this group. Cars, meals, and concert tickets are all just a click away. Along with delivery of many of those items.
Premium loyalty follows a similar model and that’s why it is becoming quite popular with the younger demographic.
According to our 2021 Premium Loyalty Data Study, Millennials (77%) comprise the largest generational group of premium loyalty members.
And what’s fascinating is that 70% of Gen Z belong to premium loyalty programs. More willing to enroll in one of these than sign up for another free program.
Technology advances have greatly impacted the expectations of the younger consumer. And that plays right into premium loyalty programs.
Millennials Will Join Your Premium Loyalty Program if You Show Them the Best of Your Brand
Seventy percent of consumers currently belong to a premium loyalty program in 2021, compared to 66% in 2020.
And the two highest membership demographics are Millennials (77%) and Gen Z (70%).
So, if you want to earn the loyalty of your younger customers, consider adding a premium tier to your existing loyalty program.
It will provide the instant benefits and VIP services that your younger customers will find valuable enough to pay a membership fee for.