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In the world of contactless money and in-app rewards, loyalty programmes are making a comeback
Economical spending is the new trending lifestyle and with the onslaught of living expenditures, it is gaining popularity among the elite as well as the masses.
As consumers feel the pinch of the ever-increasing cost of living, affluent consumers are finding smarter ways to benefit from their purchases. Not only are they keen on getting a return on their purchases, they are also shifting their loyalties based on what they perceive are more economical brands.
A recent study shows that millennials are 2.2 times more willing than baby boomers to pay a premium for products and services if they can also earn loyalty and reward points.
Almost 68 per cent of women versus 60 per cent of men are interested in earning rewards for non-purchase activities (updates to profile, refer-a-friend and social activities).
Some 6 out of 10 millennials are comfortable receiving product recommendations based on their purchase history, compared to only 4 out of 10 baby boomers. Substantially more millennials value programmes that offer special services such as concierge (59 per cent of millennials vs. 38 per cent of baby boomers).
Brands across the world are making use of loyalty programmes now more than ever. Sales, discounts and reduced-price offers are offered more frequently. Premium brands are also introducing loyalty programmes or partner with a larger loyalty scheme to create an experience.
Millennials, in far greater numbers than previous generations, do not buy homes or cars (based on statistical data and declines in these two industries) and live at home with their parents well into their 30s. But, they are willing to spend more for what they perceive to be a greater value — or a company that is giving something back to them. This apparently falls closer to the “experiences” millennials are willing to spend on, than the “things” they largely say they are less likely to spend on.
But what drives loyalty? According to a research, fun is an important loyalty driver for 60 per cent of millennials. Baby Boomers Gen Xers (both 70 per cent) prize value for money on their purchases higher than millennials (65 per cent). Some 80 per cent of millennials are said to find points or rewards for purchases made in-store, on a website or mobile device appealing, as well as the ability to choose among several types of rewards (81 per cent), and opportunities to earn bonuses by doing some specified activity (also 81 per cent).
And how do brands make loyalty programmes more relevant? By structuring a comprehensive programme that can be adopted digitally. Nearly 40 per cent of “digital native” millennials rely on mobile apps to track and redeem their rewards, while the use of plastic membership cards dropped by 4 per cent during 2016 across all age groups. Demand has increased among 57 per cent of members who want to engage with programmes on a mobile device. Some 62 per cent of women and 52 per cent of men would like to engage with programmes on a mobile device and 33 per cent of millennials have conveyed their dislike of rewards programmes because there are too many cards to carry.
Outside of a programme app, consumers are most interested in using their mobile device to check their points balances (57 per cent), redeem reward points (55 per cent), find a location/store (54 per cent), and browse reward options (54 per cent).
As beneficial loyalty programmes are, their execution is of crucial importance to their success. Millennials are most incentivised to join a loyalty programme based on how quickly rewards accrue (51 per cent) and the variety of rewards available (38 per cent), with 50 per cent of millennials stating that they have quit a programme because rewards took too long to accrue.
The writer is chief operating officer of Bebuzzd, a one-stop solution that helps businesses build bespoke digital loyalty schemes.
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