​Research shows surge in millenial-centric loyalty programs

New report reveals a jump loyalty programs targeted at millenicals in Australia

Loyalty programs are connecting more with the millennial generation, but there’s still room for evolving the programs to meet the generatio0n’s expectations, a new report has found.

The report, for love or money 2016, commissioned by strategic loyalty consultancy Directivity, showed 57 per cent of consumers believe that brands need a loyalty program to keep their customers loyal and this jumps to 68 per cent for millennials.

The report also showed that in 2016, 82 per cent of Australian loyalty program members over 18 years of age are enrolled in at least one loyalty program, only a slight decrease from 2015. Meanwhile the average number of memberships per member remains steady at nearly 3.9.

Report author and CEO of Directivity, Adam Posner, said that programs are connecting more with the millennial generation, however programs need to evolve to meet their expectations.

“Interestingly millennials have a stronger desire for non-transactional methods of being rewarded such as travel and entertainment experiences as well as being rewarded for interacting with the brand, not only transacting” he said.

According to Posner, loyalty programs need to evolve to reward millenials for interactions such as sharing on social media, writing reviews, completing surveys and even loyalty games or gamification, which are highly regarded by them.

“They are also more keen to have opportunities to donate or redeem their rewards and points for a charity or local community cause, what I call moving from points for purchase to points for purpose,” he added.

In other key findings, the report also showed when it comes to privacy, loyalty program members have become more sensitive about their membership data since the topic of privacy was researched in their ‘share the love’ 2014 study.

“Transparency builds trust and loyalty programs, which are an extension of brands, need to live up to that promise,” Posner said.

The research further indicated almost two thirds of members (64 per cent) are happy to receive discounts or special offers based on their purchasing habits. But there is a limit, with only 20 per cent agreeing to have their personal details shared with other organisations for a reward or benefit.

“Loyalty programs are a real business imperative for driving brand loyalty and profitability,” he said. “However, they must continue to evolve to meet and beat their members expectations”.

Members’ defection from programs remains consistent with previous research results with 23 per cent leaving their programs both passively and actively in 2016 vs 22% in 2015.

Cole flybuys retained its first place in the top ten programs, followed by Woolwroths everyday rewards and Qantas frequent Flyers. Banks also proved strong, wuth CommBank Awards, ANZ Rewards and Westpac Altitude Rewards leading the way. Meanwhile 65 per cent of loyalty program members still prefer a traditional loyalty car to a mobile app.

“We still find this to be surprising,” Posner said. “I do believe this will slowly change as mobile becomes a commonly used payment device with links into loyalty programs.”

2016 Australia’s top 10 most mentioned programs (unprompted) as ‘doing a very good job’:

  1. Coles flybuys
  2. Woolworths Rewards (formerly Everyday Rewards)
  3. Qantas Frequent Flyer
  4. Virgin Velocity
  5. MYER one
  6. Priceline Sisterclub
  7. CommBank Awards
  8. Boost Vibe Club
  9. Petbarn Friends for life
  10. Optus Perks

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

Join the CMO newsletter!

Error: Please check your email address.
Show Comments

Supporting Association

Blog Posts

Is AI on course to take over human creativity?

Computers and artificial intelligence have come along at an exponential rate over the past few decades, from being regarded as oversized adding machines to the point where they have played integral roles in some legitimately creative endeavours.

Jason Dooris

CEO and founder, Atomic 212

Are you leading technology changes or is technology leading you?

In a recent conversation with a chief technology officer, he asserted all digital technology changes in his organisation were being led by IT and not by marketing. It made me wonder: How long a marketing function like this could survive?

Jean-Luc Ambrosi

Author, marketer

Disruption Down Under – What’s Amazon’s real competitive advantage?

Savvy shoppers wait in anticipation, while Australian retailers are gearing up for the onslaught. Amazon’s arrival is imminent.

Great article, Thanks for sharing with us. I would like to recommended list of top customer loyalty software for small to large scale of ...

Matts Frigian

How brands are ramping up customer loyalty program spending in 2017

Read more

“We’re in an arms race for finite attention.”What a statement that is. I am so glad that someone of Steve's caliber comes out about the m...

Peter Strohkorb

Marketo CEO: Ditch the volume game, focus on value

Read more

Hello Greetings for the day. As I am also looking to stabilize gym with Hypoxi in india place called Delhi. And I have gone through your ...

Dhruv singh

Goodlife gets business ‘in shape’ with real-time analytics

Read more

Thanks for picking this up. We are always happy to add richness to our products and in turn the lives of our followers and fans.

Fitbit Middle East

​Fitbit announces new virtual race platform to enhance customer experience

Read more

Thanks for a very interesting article. B2B marketing seems tricky. I think that marketing plays a vital part - it can build the brand and...

Aaren

From tactical overhead to strategic growth driver: B2B marketing in the digital age

Read more

Latest Podcast

More podcasts

Sign in