Study highlights interesting differences in what Millennials expect from rewards programs

Engaging with customers and encouraging them to return again and again is the hallmark of a successful business. One of the most powerful tools to boost customer retention is the humble loyalty program. There are more memberships than ever and Millennials are showing a particularly keen interest, with 63% of Millennials describing loyalty programs as important to them, compared to 61% of Gen X, according to AlixPartners.

Despite that interest, there’s evidence that loyalty programs are not delivering on expectations for Millennials. A worrying 70% of Millennials engage with less than half the loyalty programs to which they belong and 50% engage with less than a quarter, compared to 62% and 38% of non-Millennials, according to a 2018 Millennial loyalty survey.

The following best practices should help boost Millennial engagement with loyalty programs.

Smartphone access is crucial

In CodeBroker’s 2018 shopper loyalty survey that polled 1,287 U.S. consumers asking if they’d be more likely to participate in a loyalty program if they could access it from their smartphone, 97% of Millennials said yes, compared to 69% of non-Millennials.

You can safely assume that virtually all your Millennial customers own a smartphone and 87% of them have it with them at all times, according to Google, so make sure they can access your loyalty program on it.

Delving into frustrations with loyalty programs, 56% of Millennials were annoyed that they couldn’t access rewards, points balance and other information easily on their mobile device, or that they had to download and use a mobile app to do so; while 44% chose the need to log into a website as their top frustration. That compares to 63% and 35% respectively for non-Millennials.

Engage on their preferred channel

People want to be contacted and engaged with via their favorite channels. An omnichannel approach is a good way for brands to show customers that they are catering to them and adds a touch of personalization that can really boost engagement and overall satisfaction.

Asked about preferred methods for accessing loyalty programs…

  • 54% of Millennials find a mobile app not sufficient
  • 28% chose text messages on smartphone
  • 11% chose a mobile wallet
  • 6% chose website on computer
  • 4% chose Facebook Messenger.

The standout difference between Millennials and non-Millennials here was a preference for access via a “website from my computer” answer, which was chosen by just 6% of Millennials, but 24% of non-Millennials. This isn’t a big surprise because we know that traditional desktop computer usage is falling as smartphone usage rises, as shown by comScore.

Meeting Millennial expectations

Creating a clear, accessible loyalty program that can be accessed via multiple channels is going to be a winning strategy for every generation, but there are obviously some strategies that will find greater traction with Millennials. When we investigated loyalty program gripes we found broadly similar results across the generations.

The top gripe for 30% of Millennials was rewards expiring before they could be redeemed, followed by not knowing when rewards were available (28%), difficult accessing rewards (14%), and carrying the card (13%). The most notable generational difference here was not knowing when rewards are available, which was chosen by just 22% of non-Millennials.

To sum up, any brand looking to hone its loyalty program for Millennials must ensure that it’s fully accessible on smartphones, though not necessarily through a mobile app. Make it as easy and frictionless as possible to check up on points balances or rewards accrued, without forcing people to log in to a website or install an app. Pay attention to the channels your customers prefer and reach out accordingly.

Millennials could be customers for a long time to come, so investing to meet their expectations makes a lot of business sense.