There has been a lot of discussion around building customer loyalty since the financial crisis hit. Brands often ask us, what are the drivers of loyalty? How do we successfully drive loyalty with a fickle consumer base?
Of late, Delvinia has had the privilege of working with Student Price Card (SPC), a youth loyalty brand, in helping it reshape its loyalty business through digital and data. During this journey together, we have spent a lot of time understanding the needs and attitudes of Millennials as step to design a customer-centric, digital business strategy that will connect with and build loyalty between the brand and its customers.
While we’ve all read research reports that speak to Millennials being the generation characterized by digital savviness, social consciousness, and wanting a meaningful relationship with brands, I am still in awe each time I speak with Millennials on how profound and fundamental the change is in the consumer mindset. What’s more important, is that the mindset of Millennials is indicative of the future consumer landscape.
Out of our findings, I am most mindful of the disconnect between brands and Millennials on what constitutes a ‘meaningful relationship’. As Millennials shared with us, a meaningful relationship with a brand stems from understanding their needs and goals and genuinely working in collaboration to achieve them to create a win-win situation.
Millennials conveyed that brands are self-interested and always seem to be employing ways to get them to spend more without considering the impact of such. But mindsets have changed since the financial crisis. Consumers have a heightened focus on money discipline, including spending wisely and being frugal.
This heightened awareness is evident with Millennials in our research, despite their young age. They have observed their parents, older siblings and friends being screwed by consumerism and are wary of it. In contrast, most loyalty brands continue to be oriented around consumerism, encouraging spending with little acknowledgement of the new mindset and priorities.
As an example, one youth interviewee told us that once he turned 18, he was solicited non-stop to sign up for a credit card, including calls to his house, solicitation on campus and each time he visited the bank. From his perspective, credit cards are a death trap for novices in money discipline like him and those with little income.
How can consumers become loyal to brands that do not have their interest in mind?
In the past, marketing and sales programs oriented around consumerism may have worked just fine. In the past, building meaningful relationships with individual consumers on their terms may have been cost prohibitive. But with today’s new consumer mindset and unprecedented access to consumer data and affordable technology, it’s time for change.
What is your brand doing to build genuinely meaningful relationships and loyalty with the new consumer? And, how are you combining that with the opportunities and challenges technology brings?