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Can Millennials Be Swayed by a Good Loyalty Program?

Millennials and Rewards Programs

Can You Woo Millennials with a Rewards Program?

Several studies have found that rewards programs are not only popular with millennials but that millennials are willing to pay for loyalty programs. The credit card industry has noticed that millennials are making their choices on which type of card to sign up for based on its rewards program. In terms of actual credit card usage, roughly four in 10 Younger Gen Yers use their credit card(s) as often as they can in order to maximize rewards points.

According to a study conducted by Equifax, what motivates millennials to sign up for credit cards is rewards. If you want to persuade a millennial to pick your credit card over another, then you’ll have to offer an irresistible rewards program. Millennials use their credit cards more than other generations to maximize rewards points.

Millennials Credit Card Rewards

An Aite Group survey found that 41% of young millennials who own credit cards use them as often as possible to maximize rewards points. And Aimia found that 80% of millennials participate in loyalty programs. Therefore, you have many millennials you could potentially gain as a customer and participant in your loyalty rewards program. Because they want to max out rewards points, you could increase sales by offering a loyalty program.

Important Rewards Programs Stats in Relation to Millennials

The trend goes beyond credit cards, however. Here are some stats and information about loyalty programs to guide you in developing a relevant rewards program for millennials:
  • 63% of millennials said they had joined a program within the past year, versus 55% of the general population. (Colloquy)
  • 68% of Millennials wouldn’t be loyal to a brand without a strong loyalty program. (Bond)
  • 42% of millennials continue to participate in a program because it has a mobile payment option, while just 15% of baby boomers said the same, a 64% difference.  (Colloquy)
  • Millennials are 1.5x – 7x more likely to create the kinds of high-value social content brands and retailers desire (recommendations, reviews, sharing brand content) when offered an incentive to do so. (Punchtab.com)
  • 75% of 18-24-year-olds and 77% of 25-34-year-olds said they were willing to join a fee-based loyalty program. It’s the idea that you get what you pay for. Almost half (47%) say the rewards in fee-based programs are better than those of free programs, with 61% of 18- to 24-year-olds and 54% of 25- to 34-year-olds concurring.
  • 51% of Millennials said they prefer store loyalty programs that cover multiple brands. 37% said they’re interested in parent brand programs, and only 12% favor loyalty programs at the single brand level. (Punchtab.com)
  • Millennials are more enthusiastic (26%) than Gen X (19%) and Boomers (13%) about using loyalty rewards to save on the costs of driving (Extents)

What Do Millennials Want in a Loyalty Program

Whether a rewards program is free or not doesn’t matter to millennials. They are happy to part with a little money for the loyalty program if it helps them free up more time. Millennials embrace incentives and loyalty programs, as long as they’re tailored to their lifestyle and interests, and offer rewards for actions in a timely manner. They prefer rewards with real world impact, favoring VIP treatment, exclusive access, and insider influence with the brand over badges and social recognition from the brand.

Amazon PrimeAmazon Prime is an example of a successful fee-based rewards program. The average Amazon Prime shopper spends more than two times as much money in a year than customers who are not members of the rewards program. Customers like Amazon’s loyalty program because it offers free shipping, discounted products, fast delivery, and more free time.

A Brand Keys study found that brands that stand for the right emotional values maintain relevance and actually create relationships, and the ones that can better meet higher Millennial expectations show higher degrees of loyalty. Top brands that best meet Millennial consumers’ expectations and, therefore, to which Millennials are most engaged and loyal, are: Apple, Nike, Chipotle, Target, Amazon, Samsung, Sephora, Levi’s, PayPal, Old Navy, Under Armour, Beats, Google, Asus, Chevrolet, Converse, Verizon, Victoria’s Secret, Ford and Ralph Lauren.