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BORN
THIS WAY:
How Generation Y
will reshape customer loyalty
By Rick Ferguson
Vice President,
Knowledge Development
By Rick Ferguson
Vice President,
Knowledge Development
aimia.com
2012 Aimia, Inc. All Rights Reserved.
How Generation Y
will reshape customer loyalty
By Rick Ferguson,
Vice President
Knowledge Development
YOUR
BUSINESS
RESULTS
DELIVERED
OUR
INSIGHT
aimia.com
2012 Aimia, Inc. All Rights Reserved.
Table of Contents
2
4
6
8
10
12
Introduction
Methodology
Generation Why
Millennial Brand Loyalty
The Millennial Loyalty Challenge
Millennials & Technology: All Marketing is Mobile
14
16
18
20
22
23
Introduction
"Technology is
a huge part of my life.
From the moment I wake
up to when I go to bed, I have
my phone on me. I'm on my
computer multiple times a
day, working, sending mails...
It's a huge part of my life."
- Adam, 21
Methodology
> Aimia commissioned research firm Harris Interactive to conduct a survey regarding the attitudes and opinions of
Millennials (age 19-29) compared to non-Millennials (age 30+) in Canada, the UK and the US. The survey covered many
topics related to reward program membership and customer loyalty including: technology use, reward program
participation, mobile marketing, privacy preferences, and brand loyalty.
> This portion of the study was conducted online in Canada, the UK and the US in 2011. Data collection was conducted in
the US from June 30th July 14, in the UK from June 30th July 19, and in Canada from July 8 July 19.
> Qualified respondents were age 19 or older and resided in Canada, the UK or the US.
> Individual interviews averaged 17 minutes in length.
> The data was weighted to be representative of the general population (not just the online population) of age 19+
respondents in each country.
> Due to rounding, some survey question responses may not add up to 100%.
> The infographic illustrations in this paper include the survey question numbers referenced; the actual survey
questions can be found on page 22.
Generation Why
GENERATION WHY
US Millennial consumers are more diverse, defined by underemployment, and growing in spending power.
Millennials
female
50 50
Age
54 46
male
19-24
25-29
Non-Millennials
57%
61%
30 13
19 19
Non-Millennials
59%
71%
Non-Millennials
Employment
Income
$
$
34%
28 19 9
<$25,000
$25,000-$49,999
30%
17 15 9
10 10 9
23 23 17
$50,000-$99,999
>$100,000
Employed (full)
Employed (part)
Unemployed (looking)
Unemployed (not looking)
77 Million
Estimated number
of US Millennials
$600 Billion
Millennial contribution
to the $6.5 trillion
spent annually by
US consumers
1.7 Billion
Estimated number
of Millennials
worldwide
MILLENNIAL LOYALTY
Marketers build relationships with consumers based on the foundational building blocks of VALUE, TRUST,
and INFORMATION. US Millennials are no differentand the tools of loyalty management will remain essential
to building profitable relationships with them.
VALUE: US Millennials value quality, but are more price-conscious than older
conusmers. Meanwhile, 3/4 of millennials seek out loyalty programs.
$
Q: What factors make you loyal to a brand?
(percent ranked #1)
Millennials
Millennials:
55%
Non-Millennials
59%
Quality
Service
Recommendations
Price
Popularity
Unanswered
78%
19 1 1
(Q1100)
(Q1105)
TRUST: This is a crucial step for marketers hoping to collect personal information
from Millennials. US Millennials identify rewards and incentives, data security,
and ethical use of data as their top requirements for brands that wish to collect
and use customer data for marketing.
Q: What value would you need in order to share personal information with marketers?
26% 20%
Millennials
Non-Millennials
21 22
6 14
14 11
87
Rewards
Security
Ethics
65
Products
44
Price/Value
Service
Not interested
HI!
My name is...
(Q1115)
101101010101
00101010101
111101010100
01010010101
Do business with
a brand after
earning a reward?
Be or feel more
loyal to a brand
after earning
a reward?
Likely
Millennials
Non-Millennials
78%
72%
Millennials
Non-Millennials
17 6
76%
19 5
23 5
71%
22 7
Promote products
or brands through
social media in
exchange for
rewards?
Net Neutral
Not Likely
Millennials
Non-Millennials
78%
75%
Millennials
Non-Millennials
44%
29%
15 7
20 35
18 7
26 45
(Q1010)
QUOTES HEADER
LOREM IPSUM
The most significant difference between US Millennials and older consumers is that they actively seek
out information that exists outside of your control as a marketer.
Q: Do you ever use your mobile device to...
Yes
No
57%
58%
24%
37%
31%
11%
Millennials
Non-Millennials
(Q850, Q855, Q860)
17%
Percentage of Millennials
who use Twitter
often or very often
72%
Percentage of Millennials
who use Facebook
often or very often
MILLENNIAL TECHNOLOGY
When asked to distinguish themselves as a generation, US Millennials overwhelmingly define themselves
by their relationship to technology. But our survey shows that mass adoption of mobile marketing will
be driven by functionality, not age.
Q:What do you own?
79%
Millennials
Non-Millennials
65%
48%
Laptop
78%
6%
Desktop
8%
47%
Tablet
30%
Smart Phone
(Q700, 800)
COMMUNICATIONS: The demise of email has been greatly exaggerated; however, texting and social
media also define Millennial communication.
Q: How often do you (% saying very often/often)
92%
95%
74%
Use email?
Millennials
39%
Non-Millennials
72%
45%
17% 5%
Use Facebook?
Use Twitter?
(Q705)
50%
47%
28%
21%
15%
11%
Millennials
Non-Millennials
29%
$
$
24%
13%
9%
High Interest
Some Interest
Use phone as a
rewards card?
26%
17 57
19%
Use phone to
conduct banking?
15 66
Use phone to
pay at checkout?
16%
Use phone as a
credit/debit card?
12 73
13%
13 74
46%
51%
Little Interest
Millennials
Millennials
Non-Millennials
Non-Millennials
12%
11 77
8%
10 82
Download coupons or
reward certificates
77%
66%
60%
48%
59%
54%
8%
9 83
7%
10 83
(Q865)
(Q830)
2012 Aimia, Inc. All Rights Reserved.
MILLENNIAL PRIVACY
We designed our Millennial Loyalty Survey to understand how well Millennials perception of data security and
privacy color their perceptions of the loyalty Value Exchange. Are Millennials more or less comfortable with sharing
personal information with marketers?
$
$
101101010101
00101010101
111101010100
01010010101
US Millennials understand this transaction, and are more likely to share personal information.
Q: How likely are you to (very/somewhat likely)
36%
Millennials
22%
Non-Millennials
50%
37%
(Q910, 915)
Millennials
Non-Millennials
Facebook privacy?
54%
40%
66%
38%
Location tracking?
34%
28%
47%
32%
14%
41%
20%
(Q900)
But they share broad consumer concerns about controlling their personal data.
Q: It is important for me to (strongly agree/agree)
Millennials
Non-Millennials
84%
86%
Be able to create a
portable privacy profile.
76%
81%
Opt in to location
tracking.
79%
83%
47%
42%
Opt in to online
tracking.
77%
81%
(Q905)
MILLENNIAL REWARDS
The key difference between Millennial loyalty program participation and participation by older consumers: Millennials
expect immediate gratification and transparent value from your program. These expectations will require marketers
to reinvent programs in traditional sectors.
PLAYING THE GAME: Millennials play the loyalty game to win
Q: Are you a member of a loyalty program? (yes)
Millennials
Non-Millennials
77%
< month
43%
82%
35 13 9
41%
< 3 months
28 21 9
< 6 months
< 1 year
(Q710)
Millennials
(Q1005)
Non-Millennials
Millennials
Rewards can be earned quickly:
66%
55%
40%
37%
Its connected to a social cause:
44%
36%
Exciting rewards such as trips, etc.:
42%
50%
Its a company I feel loyal to:
25%
20%
9%
11%
Millennials
69%
50%
25%
55%
22%
20%
Online Shopping
Non-Millennials
26%
admit one
18%
Entertainment
Credit/Debit
45%
Travel
45%
44%
Retail
Groceries
19%
18%
(Q730)
56%
Non-Millennials
21%
23%
Restaurant
(Q715)
83%
Millennials
80%
85%
80%
Gift Cards
Cash Back
24%
15%
Home Electronics
admit one
6%
22%
18%
42%
19%
35%
9%
5%
Travel
10%
4%
Music
Fashion
35%
Discount Coupons
Entertainment
12%
47% OFF
Non-Millennials
VIP Access
$
$
Charity
6%
1%
8%
1%
(Q1000)
Mobile Downloads
Coalition
Operator
Grocer
Fuel
Retailer
Card
Issuer
Pharmacy
Millennials
Within the
past month
DIY
More
Retailers
Within the
past 3 months
56%
59%
21%
21%
9%
9%
Grocer
Program
55%
67%
24%
22%
11%
5%
Coalition Loyalty
Program
Non-Millennials
Credit Card
Program
Common
Currency
Millennials
Non-Millennials
74%
87%
(% ranked first)
Retail
Program
29%
30%
30%
39%
21%
14%
(Q720)
(Q1020)
62%
Percentage of Millennials
who list email as their
preferred communication
channel for
reward programs
Conclusions:
Answering Generation Why
So whos right about Millennials:
Jean Twenge, who sees a generation
hobbled by narcissism and entitlement,
or Strauss and Howe, who believe that
Generation Y will emerge from the
Great Recession ready to change the
world? Were Millennials really born
this way, or will they continually
redefine themselves as the Baby
Boom generation did before them?
To complement the results of this
online survey, we conducted 30
one-to-one interviews of Millennial
consumers in Canada, the UK and the
US. What they overwhelmingly told us
is that they define themselves by their
relationship with technology.
"Positive words I
would use to describe
rewards programs would be
convenient, money-saving and
effective to build a company's
name. But they can be annoying
if you have to jump through
a few too many hoops to
get those rewards."
- Melody, 24
Survey Questions
Chart page 7:
BASE: ALL RESPONDENTS
(Millennials n=1147,
Non-Millennials n=1135)
Demographic questions
Chart page 9:
BASE: ALL RESPONDENTS
(Millennials n=1147,
Non-Millennials n=1135)
Q1100 Please rank the factors
that make you loyal to a
brand. Which factors are
most important to you? Rate
these factors from most
important to least important.
Q1115 What value would a
company need to provide to
you for you to share personal
information about your
Non-Millennials n=915)
Q915 Please tell us how likely
you are to engage in the
following activities tied to
loyalty and reward programs
in which you actively
participate:
Chart page 17:
BASE: ALL RESPONDENTS
(Millennials n=1147,
Non-Millennials n=1135)
Q710 Are you a member of
any loyalty or rewards
program?
BASE: REWARDS PROGRAM
MEMBERS (Millennials n=903,
Non-Millennials n=915)
Q715 In what types of
programs do you participate?
Q1000 When earning rewards
in a loyalty or reward program,
which category of rewards is
most appealing to you? Please
rank from most appealing to
least appealing.
Q1005 How long do you think
it should take to earn enough
points in a rewards program
so that you can redeem some
or all of the points for a
reward?
BASE: NON-MEMBERS AWARE
OF REWARDS PROGRAMS
(Millennials n=207,
Non-Millennials n=178)
Q730 Please rank the
following factors that might
make you consider joining a
reward program from most
important to least important
(% ranked top 3).
Chart page 19:
BASE: REWARDS PROGRAM
MEMBERS (Millennials n=903,
Non-Millennials n=915)
Q720 How recently was your
latest participation in (this)
these program(s)?
Q1020 How appealing are the
following reward program
activities? Rank the activities
by appeal, regardless of
whether or not you currently
engage in them.
About Aimia
We are a global leader in loyalty management. Our unique capabilities include
proven expertise in building proprietary loyalty strategies, launching and managing
coalition loyalty programs, creating value through loyalty analytics and driving
innovation in the emerging digital and mobile spaces. We build and run loyalty
programs for ourselves and for some of the world's best brands. Customer data is
at the heart of everything we do. We are Aimia. We inspire customer loyalty.
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