Dave Battiston, Managing Director of International Development for Aimia, explained the results of an extensive industry survey focused on the differences in attitudes towards loyalty schemes between the new generation of 19-29 year olds – dubbed Generation Y – and older consumers in the 30-plus age group.
Aimia, a global leader in loyalty management, owns 60 per cent of Air Miles Middle East (AMME), the region’s leading coalition loyalty programme, which has over 1.2 million members and over 1,000 participating outlets in the UAE, Qatar and Bahrain.
“In the Middle East we operate under the Air Miles banner and membership in the UAE, Qatar and Bahrain has almost doubled over the past five years. We’re aiming for a 50 per cent increase in penetration by 2013, to take our membership to over three million members and the results of this survey will be crucial in achieving this goal,” Battiston said.
The results of the extensive 2011 online survey of over 2,000 people in the Generation Y or ‘Millenial’ consumer segment in Canada, the UK and the US shows the changing attitudes towards consumer loyalty.
“The survey focuses on the attitudes and behaviours of Generation Y as these consumers relate to brand loyalty, data privacy; mobile and social media marketing and rewards programme participation and give us some incredibly powerful statistics for the loyalty sector.”
The survey reveals while four in five (80%) of Millennial consumers claim participation in loyalty and reward programmes, compared to nearly nine in ten (89%) non-Millennials, nearly three-quarters (74%) of Millennials are more likely to choose a brand that offers a loyalty or reward programme over a brand that doesn’t.
Also, in unprompted responses, Millennials rate loyalty rewards as the top incentive they look for in exchange for sharing personal information with marketers. Over half of Millennials (58%) are willing to promote products or brands through social media in exchange for rewards and over one-quarter of Millennials (27%) are interested in using a mobile device as a substitute for carrying a plastic loyalty card.
“Through the survey we were interested in understanding Millennial attitudes towards consumers brand loyalty. We were keen to discover which aspects of consumer-brand relationships drive their loyalty and how these attitudes differ from previous generations. The three main focuses were technology, privacy and the power of loyalty rewards and current consumer perceptions.
“For loyalty programme providers one of the survey results was very telling, as it was found that Millennial loyalty is more volatile than that of older consumers, showing customers are now more fickle than in previous generations, meaning loyalty programmes must be more in tune with their members than ever or there is the likelihood their members will move elsewhere.
“However loyalty programmes do remain a difference-maker, as when Millennials perceive relative parity between a brand and its competitors, they’ll choose their brand relationships based upon the expectation of added value in the form of rewards and incentives. Nearly three-quarters of Millennials (74%) rate loyalty and reward programmes as ‘very’ or ‘somewhat’ likely to make a difference in their purchase decisions,” Battiston, added.
“Our survey demonstrates that Millennials are indeed more fickle in their brand loyalty than older consumers, but are far more likely to feel and act more loyal to brands that offer loyalty and reward programmes. We also identified a few key differences that mark this generation: They’re less concerned about high quality than older consumers, although equally motivated by price, and they’re more willing to spread the good news about brands provided they feel they are receiving some value.
“Millennials are nearly three times more likely (32% to 11%) than older consumers to defer to members of their circle of influence on social networks when making a purchase decision. The research suggests that incorporating social media into reward programme platforms may be essential for building relationships with this group of consumers.”
“When you ask Millennials to respond to offers, to consolidate their spending and to tell their friends about your brand, the first and only question they’ll ask is, ‘Why – with so much information at my fingertips, why should I give you a second thought? What’s in it for me?’ Therefore, when Millennials engage with loyalty programmes, they’ll expect to see benefit within a very short time—if they don’t perceive that the programme is worth their time within the first 30 days, they’ll most likely lose their attention for good.”