Membership

Study: Millennials Most Likely to Pay for Loyalty Programs

By / Jul 20, 2015

In a bit of news that could prove promising for membership-based associations, a new LoyaltyOne survey finds that rewards programs are more appealing to millennials than to older audiences.

As Loyalty360‘s Jim Tierney puts it, millennials are “the most sought-after age group among loyalty marketers.”

But younger audiences aren’t always easy to capture. Fortunately, one method that appears to work is already tried-and-true in associations: A new survey by LoyaltyOne suggests that young adults are more likely than older customers to consider registering for a fee-based loyalty or rewards program.

LoyaltyOne found that 75 percent of respondents ages 18 to 24 and 77 percent of those 25 to 34 would consider joining a rewards program that charged a fee. In both cases, that level is far above the 62 percent of 1,005 total respondents who reacted positively to fee-based customer-loyalty programs.

Paying for Rewards

In the age of Netflix, Spotify, and Amazon Prime, it makes sense that younger generations are eager to reap the rewards of loyalty-based programs—especially given the benefits.

“Millennials are growing to expect more relevant, meaningful, and immediate benefits and value,” Lance Du Chateau, LoyaltyOne associate partner, told CIO Magazine. “Previously, companies and brands launched traditional loyalty programs to provide differentiation and garner consumer interest. However, today there are few markets remaining where major players don’t offer points or discount programs.”

To members of generation Y, it’s an investment: 79 percent of those 18 to 24 and 76 percent of those 25 to 34 said they would pay for rewards that correspond to their specific needs.

Almost half of respondents (47 percent) said the rewards of paid consumer-loyalty programs are better than those of free programs. And millennials (61 percent of those 18 to 24, and 54 percent of those 25 to 34) indicated even more support for this sentiment.

Association Lessons

Associations are working hard to woo twenty-somethings and thirty-somethings, who haven’t always been easy to engage. Research has uncovered both challenges and opportunities for organizations seeking to bring in next-gen members. The findings of the LoyaltyOne survey may point to one of those opportunities.

Last week’s #PrimeDay on Amazon is a good example from the for-profit world. The day of online sales was exclusive to $99-per-year Amazon Prime members and those who signed up for a free trial of the program, which offers free shipping, access to unlimited content, and discounted prices.

And the sales boost that Amazon got proves the point: The company saw a reported 93 percent increase in sales that day, unloading more than 34 million items to Prime members.

“These results should attract the attention of brands considering a shift to fee-based loyalty programs as marketers look for ways to create competitive differences and lock in customer spend against a backdrop of waning program effectiveness and engagement challenges,” Du Chateau said in a news release.

Patrick deHahn

Patrick deHahn is a contributor to Associations Now. More »

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