Loyalty and different types of consumers

This post was updated by the editor on 25/09/2020

Do we all treat loyalty the same? With different types of consumers that your business might appeal to, one size isn’t always going to fit all. And this means you need to think about different types of loyalty programs too.

Many blog posts that look at ecommerce customer loyalty often talk about broad techniques and approaches that supposedly apply to every demographic on one level. But does this work? Do all types of consumers behave in the same way? In this blog post, we’re going to find out.

Stress Free Guide To Getting Started In Customer Loyalty

We’ll look at three main consumer types – and think about the differences in how they approach different types of loyalty programs. Hopefully, it will give you a much better idea of how you can set up and market your program with your target audience in mind. The types of consumers are:

1️⃣  Millennials 
The exact time period can vary from source to source, but – for the Pew Research Center – millennial consumers are those born between 1981 and 1996.

2️⃣  Generation X 
Generation X are consumers who were born in the period between the millennial and baby boomer generations, which spans the years between 1965 and 1980.

3️⃣  Baby boomers
The term “baby boom” refers to the surge in birth rate following World War II. More often than not, these consumers were born between 1946 and 1964.

But it’s not just a matter of knowing who these different types of consumers are. It’s also about getting to know them better as people – and the categories of customer loyalty they value most. 

And, with it, you can get a clearer idea of the loyalty program types that’ll be the most effective for your ecommerce business. Let’s find out what we know…

“Too many” loyalty programs is an issue for millennials

consumer loyalty

More online businesses and ecommerce retailers are now turning to loyalty programs as a way to keep hold of customers. But could this be a problem if you don’t get it right? According to a 2020 study by Bond, the average American holds 14 memberships – but only half of those are active.

And previous research has shown that a third of millennials admit the one thing they  is having too many cards to carry because of the number of schemes and programs they’re signed up to. And that also makes it hard to be able to keep track of them all.

This compares to 17% of Generation Xers and 20% of baby boomers who feel the same.

KPMG research, meanwhile, also reveals that more than half of millennials (55%) believe they’re signed up to too many loyalty programs.

One way to overcome this, however, is to ensure that the method you use to reward your customers’ loyalty stands out from other types of loyalty programs. This will make consumers much more likely to remember it exists, the reasons they signed up in the first place and the incentive to stay engaged with it.

All consumers “more likely” to spend with a brand that has a loyalty program

consumer loyalty

Each of the three main types of consumer feel encouraged to spend more with a brand that has a loyalty program. According to KPMG, being a member of a program makes 81% of millennials and 66% of baby boomers spend more with a company. 

In the UK, 2018 data showed that almost half of all consumers spend more with a brand if they were a member of its loyalty program.

This can be because – as Bond discovered – two-thirds of American consumers alter how much they spend in order to maximize the rewards they get back. And nearly 80% admit being a member of a program makes it more likely they’ll keep coming back to a brand.

So, this means it’s always a great time for your business to start thinking about creating a new loyalty program. If you’re losing out on sales, it may just be because a competitor has a loyalty program and you don’t. Getting it up and running is simple too! Get in touch with our team and request a demo to find out how we can help you keep all types of consumer loyal to your brand.

Loyalty programs that transcend purchases

consumer loyalty

Out of all the types of consumer that you reach out to, how does it work with their lifestyle? For millennials in particular, it’s essential that a brand supports their lifestyle choices and values. In the chart above, you can see how the generations differ – but not by much.

It matters to 83% of millennials that a brand aligns with their values, for example. And, while this isn’t as important for Generation Xers and baby boomers, the majority still agree.

Lifestyle is a growing trend in loyalty. You can see some of the prime examples in the hospitality sector. Global brands such as Accor are incorporating different loyalty program types with this in mind. As well as the opportunity to save on travel costs, Accor’s loyalty program now has a new premium tier and the ability to earn and burn points with a variety of rewards.

This shows how important it is to know exactly who you’re selling to. Only then can you craft the most effective types of loyalty programs for different types of consumers.

Checking rewards status “not a concern”

consumer loyalty

Most consumers don’t check their loyalty status daily. So, it’s important to keep your customers updated with their status. Of course, this doesn’t have to mean weekly emails. But it’s definitely a good idea to let them know about a significant change – such as when they can claim the next reward. It can also be an important step to help personalize your ecommerce loyalty program.

As Bond reports, high levels of personalization drive a 6.4x lift in member spend.

A positive omnichannel experience now even more vital

In-store, 82% of smartphone users will use their mobile devices to help them decide whether to make a purchase or not. And, after reading something on their device, a quarter of people have changed their mind about something in the checkout line.

Mobile is crucial for both retailers and consumers. Consumers are using their phones to check if the item is cheaper elsewhere – or on your own website.

You must, therefore, make sure your prices are the same on all devices. And it’s essential your customers know that you’re the most trustworthy place to buy from. If not, that’s when custom can slip away at the final step.

Creating a positive omnichannel experience can help this. It provides touchpoints both in-store and online that leads to more rewards. It could also be the most effective way to reach the type of consumer we’ve not yet talked about – and that’s Generation Z.

Data shows that fewer younger adults are signing up with brands. At LoyaltyLion, we can assist. By helping you find the right loyalty program type that works for the people you want to target, you can buck what seems to be a trend to watch out for. Book a conversation with us today.

Takeaways: What did we learn?

Each of the three types of consumer groups are becoming savvier and more aware of what they want. Millennials – and even consumers younger than them – are the hardest to please. But this is just as much an opportunity as it is a threat. Take time to work out which type of consumer you sell to most – and then you can find out the type of loyalty program that fits them best.

Ready to learn more? Book a demo with a friendly loyalty expert or start your free trial now.

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About the author

Mollie Woolnough-Rai

Mollie is a Senior Content Marketing Executive at LoyaltyLion. After graduating from UCL in 2016, she has worked both in-house and at marketing agencies providing expertise in content for both B2B and B2C clients. At LoyaltyLion, Mollie manages our content, making sure our readers get the best quality resources about customer loyalty and retention.

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