Consumers are more brand-promiscuous than ever before. In fact, according to research conducted by Accenture, 77 percent of all consumers admitted they now retract their loyalty more quickly than they did three years ago.Yet companies that target Millennials (and ignore older consumers) claim they do so to win their brand loyalty. A worthy prize given that Millennials are expected to have a lifetime value of $10 trillion.
Unfortunately for these myopic marketers, the Accenture research indicates that Millennials aren’t enamoured with most current loyalty programs. In fact, they are more likely to have a negative reaction to a company’s attempt to earn their loyalty.
The research reveals a few other startling facts about loyalty in today’s marketplace;
- 57 percent spend more on brands or providers to which they are loyal. That means 43 percent spend the same or less. And more than a third (36 percent) consider loyalty irrelevant to their spending.
- 71 percent claim loyalty programs do not engender loyalty.
- 61 percent switched some or all of their business from one brand or provider to another in the last year. Not surprisingly, the propensity to switch is 6 percentage points higher among customers for whom loyalty programs have a negative or negligible effect. But even consumers who spend more on brands to which they are loyal switched 17 percent more often than those who spend less. And the clincher? “Loyal” customers who spend more are 9 percent more likely to retract their loyalty altogether.
- 23 percent demonstrate a negative or non-existent reaction to companies’ loyalty efforts. And that number is rising, particularly among younger consumers who will be critical to driving revenue growth in the years ahead. The sobering truth is that for nearly a quarter of consumers, all that spend is actually hurting the relationship.
If brand loyalty lasts only as long as a brand delivers value why market exclusively to one Generation, or age-segment, in favour of another on the mistaken premise of buying lifetime loyalty?