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Last week, Hawk Incentives, a Blackhawk Network business that provides rewards and incentives solutions, released its new research study.
The study found the millennials that were surveyed now belong to more loyalty programs than the older respondents. Additionally, it appears the millennials surveyed are driving consumer preference for prepaid and gift card rewards in loyalty programs.
Some of the key findings of the survey were: millennials belong to more loyalty programs and are more active in them, cards are favored for rewards, millennials are more likely to pick digital options as a reward, and millennials are more likely to belong to online retailer and food and beverage loyalty programs.
Theresa McEndree, vice president of marketing with Hawk Incentives, discussed the details behind survey.
“The study focused on consumer preferences for loyalty programs. More than 1,500 American adults were surveyed on their preferences and attitudes toward loyalty programs across a range of categories, including retail, airline, hotel, food & beverage, online retail, bank, gym, telecom and utility. The first segment of responses that we analyzed were millennials, of whom we had 645 respondents.”
Mark Johnson, CEO and CMO of Loyalty360, says the research is indicative of trends he has seen within Loyalty360’s member base as well.
“This was very interesting research from Hawk. It really speaks to the opportunities that brands have when making enhancements to their customer loyalty efforts,” Mark Johnson went on to say. “In a recent Loyalty360 member study, 83 percent of Loyalty360 members are going to, or potentially are going to, add new redemption options and/or experiences (currencies) to their program.”
With the trends in the market and consumer preferences being what they are, McEndree and her team were not surprised by the findings of the survey.
“We think the findings make a lot of sense. Prepaid cards and gift cards, especially delivered digitally, are extremely popular reward options and afford recipients the freedom to choose what to buy; millennials in particular appreciate this flexibility as well as the ability to add prepaid cards to their mobile wallets to suit their digital lifestyles.
Prepaid cards and gift cards, as well as digital payments, have been around for much of millennials’ adult lives, so the payments tools likely feel familiar to them—especially compared to older generations—and it’s not much of a surprise that millennials are more likely to pick digital rewards given their tendency to live digital lifestyles.”
Whether through a unique personalized experience or a traditional loyalty program, for the most part, millennials are always looking for the value a brand can bring to them. McEndree believes the brands that adapt to these preferences and shifts will be the ones who find success.
“As millennials age they will continue to expect to be rewarded for their loyalty. It’s likely that the businesses that best adapt to millennials’ evolving preferences for loyalty programs and rewards will come out on top. If the research is any indication, businesses designing loyalty programs with millennials in mind will benefit from offering an array of prepaid and gift card rewards, in both physical and digital options.”
For brands, differentiating themselves from others, regardless of industry, is more of a necessity than an optional choice in today’s market. Mark Johnson believes personalized experiences are at the heart of loyalty programs for brands experiencing success within their respective market.
“Brands today are looking to drive unique and personalized experiences within their customer base. Brands know, the more they make their offer personal and relevant to their audience, the more likely they will be able to “stand” out in the competitive set,” says Mark Johnson. “We saw this in a recent member study as over 89 percent of Loyalty360 members are considering adding additional personalization capacity over the next year.”
Considering personalization and changes to loyalty program’s for brands is one thing, but implementing those changes can be a completely different beast.
For Mark Johnson, he sees the struggles brands have with these attempted implementations and warns brands against just “jumping in,” without a strategic business strategy.
“Marketers today want to create more personalized experiences, yet there are challenges to doing so. The biggest challenges we see from our members are data & data privacy concerns (57.89%), process and communication of benefits (52.63 %), and the ROI of the new program offering (42.11%).
Brands want to know what they should be doing and they want to leverage the technology and processes that work, yet that continues to be a challenge for the brands. However, we are starting to see great movement amongst our brands. The challenge in aligning their offering with the customers’ expectations is gaining more traction!”
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