WHAT GEN D EXPECTS FROM YOUR LOYALTY PROGRAM
When loyalty marketers get together, they nervously ask each other about best practices for Millennials, the first generation of digital natives. Who has the coolest of the cool toys to attract and keep these wired consumers? The point they’ve entirely missed is that these native speakers aren’t the only consumers fluent in the language of digital technology. A few marketers are beginning to notice that there is a Gen D. NetLingo describes it this way:
“Unlike generation x and generation y, generation d(igital) is not determined by age. It’s the group of people who are completely at ease with the digital revolution and consume online information regularly, whether they’re 8 or 80.”
The accepted wisdom about Millennial digital natives is that:
- They want what they want wherever they are
- They want to control and customize their experience
- They want it in REAL TIME
They want these things because the technology exists to deliver them.
The accepted myth about everybody else is that they don’t use technology, especially smart phones, at the same rates as consumers under age 30. However, the Pew Research Center shows that the gap is virtually non-existent:
|Age||Email using phone||Use text messages||Go online from phone|
Ravi Dhar, Director of the Center for Consumer Insights at the Yale School of Management, was quoted in the New York Times as observing that “the attributes businesses are ascribing to Millennials—including a dependence on technology—apply to the population as a whole.”
So what does that mean for the loyalty marketer? Nine out of ten consumers of all ages are using mobile technology and enjoying the instant access their phones provide. Loyalty marketers must realize that:
What members expect from their loyalty programs has changed dramatically
with the digital revolution.
All members of Gen D – not just Millennials – want to control their own experience on-the-go in real time. And they expect your loyalty program to remember what they’ve told you and to keep up with their busy lives.
Here are some reactions by members of Gen D to loyalty programs:
“I really like seeing the stars bounce into the cup on my Starbucks app”: Hold a loyalty focus group or ask for feedback in a survey, and Starbucks Rewards invariably shows up as a program beloved by Gen D. The app for Vino Volo, a chain of wine stores, fills a wine bottle to show progress towards the next reward. It’s frankly fun and engaging to find your account balance in these cases. When members can see their progress wherever they are and whenever they need it, they really like it. It’s the price of entry for a loyalty program to appeal to Gen D.
“Why don’t you know what I like?”: The explicit contract of almost all loyalty programs is that members receive benefits in exchange for allowing their activity to be tracked. They are completely familiar and mostly comfortable with “since you bought that, you might like this“ algorithms. Members willingly fill out profiles and answer surveys with the expectation that their experience will improve based on the information they’ve provided.
Ignore that tracked and volunteered information at your own peril – the vegan member of a grocery program can instantly tweet to the world their disgust if you send them an offer for fresh meat. In contrast, DSW Rewards has gained popularity with Gen D for sending content based on past purchases, while Kimpton Hotels regularly earns kudos from members for intuitive service based on combining profile preferences with tracked data.
“The program is lame—there’s only one reward”: The Gen D customer expects to have a choice of rewards – preferably everything in your store or on your website. Virgin America was the first program to create an experience where members could go to book a flight and toggle between a price in dollars or in points for every seat on the flight—no blackouts, nothing held back to capacity control. It made getting a reward as easy as purchasing a product. JetBlue and Southwest followed among the airlines; Hilton and other hotels now offer their rooms for cash, points, or cash + points; and many retailers are seamlessly integrating redemption of virtual rewards into their e-commerce flow. The days of the mailed reward or hand-entered codes are rapidly waning – consumers expect the reward to be on their phone and as easy to use as the Starbucks app.
Yes, there are differences in content between age groups in terms of clothes, music, and culture, but differences in content do not necessarily mean differences in the technology for delivering that content. Each of those experiences is enabled by integrated use of technologies that are already in use across a broad range of age groups; to succeed, your program needs to go beyond just Millennials and think in terms of Gen D.
If not, you may suffer the fate of Whole Foods who proudly introduced tech-savvy streamlined stores to target Millennials and rightly received rotten tomatoes in the Harvard Business Review from Robyn Bolton:
“By describing this new concept [store] as ‘geared toward millennial shoppers,’ Whole Foods is essentially saying….Gen X and Baby Boomer shoppers are fine with or even prefer old, cluttered stores that sell a confusing array of stuff at high prices.”
Make sure that no one can say something like that about your brand and your brand’s loyalty program.
The names cited are all registered trademarks of the respective companies.