Millennial Brand Loyalty: Rewards Over Relationships

Millennials are redefining the concept of brand loyalty; in their eyes, it has changed dramatically from their parents’ version. Whereas their parent’s loyalty is seen to be a dynamic built on personal and emotional long-lasting relationships, theirs swings in an entirely new direction.

Research Objective

To understand how the Millennial generation’s definition of customer loyalty differs from that of their parents.

Target Audience

National US sample
13 states
22 cities
Ages 18 – 34
Approximately even male/ female ratio
Mix of socio-economic backgrounds & ethnicities

We Learned

1. Loyalty used to be based on personal relationships

Previous generations were loyal based on the personal relationships they established with companies and brands.

My parents always went in, they went to the same grocery store, they got to know some people there, and so their loyalty would be based on that.
~ Roger, 26, Tennessee
And I think that’s what the difference is from my parents’ generation. They basically stuck with the company through the good, bad, the ugly. Whenever they had another choice, they will stick to choose that company that they’re loyal to.
~ Chiezika, 30, California

2. The Internet changed everything

As the defining event of the Millennial generation, the rise of the Internet changed everything for Millennials — including shopping strategies.

My definition of customer loyalty is different than my parents because we just have the internet to basically get the best deals. If you try hard enough you can find the best deal out there.
~ Adam, 25, Oregon
In our case, we shop around and a lot of times, most things are bought on the internet. We don’t even know who we’re buying from.
~ Aimee, 27, Florida
I do a lot of my shopping online, and because of that I’m interacting on a regular basis with companies that have no face, it’s not about the relationship I’m forming, it’s purely about content, it’s purely about the products that I’m receiving.
~ Haley, 22, California

3. Millennials diversify their shopping

While their parents become regulars at local stores, Millennials diversify their shopping and don’t expect to find everything in one location

In my parents’ generation, they would go to a single store, like Sears for example, and they would stick with that store because they knew they could trust the product from those stores. Whereas now, there’s a lot more competition, so I don’t think brand loyalty and customer loyalty are as important.

~ TJ, 25, Kentucky

For my generation I think we always want things tailored to us, so we go to places that have the best prices, or are the most convenient, or tailor items to us – like have the most natural products or whatever we’re looking for.

~ Ana, 33, Texasia

4. For Millennials, loyalty is transactional

Millennials expect to receive benefits in exchange for their loyalty.

I’m loyal to a company that can make something that I’m happy with, but my loyalty doesn’t mean that it spans a long amount a time. It just means that I appreciate the products.

~ Kendall, 20, Washington

Our expectations? “We expect to have just as good service – even though we’re not as loyal.

~ Aimee, 27, Florida

We look to see what the store can give us in order for us to be loyal to them and I think that our expectations are so different because it’s easier for us to find another store that’s willing to meet our needs.

~ Alexis, 23, North Carolina

I feel people in my generation tend to focus on places that offer more goods and offer free things or rewards.

~ Zora, 22, Massachusetts

First off, the customer loyalty in my generation really is about quality, how much we pay for things, and not just being loyal for the sake of being loyal.

~ Gabriella, 34, California

Conclusions and Implications

- Millennials are less swayed than their parents by personal relationships to brands or companies. With a diminished sense of attachment to particular companies, this generation will readily switch brands.

- Retailer reward programs can win Millennials’ loyalty for a short time, or until a competitor offers a better program.

- Millennial consumers demand more benefits in exchange for their loyalty. Some benefits, like free shipping and returns for products bought online, go a long way in increasing brand loyalty.

- Thanks to online shopping, Millenials are accustomed to having a vast number of options at their fingertips, and they make savvy decisions based on price, quality, and convenience.

- Online reviews carry tremendous weight. When Millenials are making purchase decisions, they seek out customer reviews. When targeting Millennials, retailers must pay attention to the online conversation about their brand.

- Today’s large companies feel too big for Millennials to build relationships with. They are concerned that the level of customer service is diminishing.

By Tom Bassett

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