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Do loyalty schemes fail to capture Generation Y’s imagination?

13th Nov 2014
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Over half of 18-24 year olds are being targeted with irrelevant loyalty schemes, according to research from Grass Roots Group.

In an era where loyalty scheme memberships are said to be increasing but their ability to drive revenue is in decline, Generation Y are proving a fickle bunch to target.

In research formed from a survey of over 2,700 UK consumers, Grass Roots Group found that 49% of 18-24 year olds cite offers and rewards as the most compelling reason to buy from a brand, yet 56% claim these offers don’t deliver enough relevance. 27% state they will leave a scheme if it doesn’t capture their imagination often enough.

In contrast, 86% of over-65s cite low prices over offers as integral to using a loyalty scheme, highlighting the importance of understanding the differing needs of each age group.  

Consumer trust in loyalty schemes is a key component in many loyalty schemes failing to hit the mark, with recent research from WorldPay stating one in three consumers believed loyalty programmes hadn’t saved them a penny.

Grass Roots Group’s belief is that, with Generation Y in particular, schemes are better served as mobile apps that can use more sophisticated technology to deliver better, personalised offers:

“To achieve the consumer Holy Grail - loyal advocates who like to shout about how good you are - brands must understand that their consumers are individuals, and they must be treated as such,” says Adam Goran, divisional director of customer engagement at Grass Roots Group.

“With 41% of 18-24 year olds preferring to interact with loyalty programmes via their smartphones, compared to just 25% of the over 65s, demographic differences can have a huge impact upon a successful engagement strategy.”

This suggestion conflicts with recent statistics from GI Insight that stated just 6% of people view mobile apps as a driver for enrolling and staying active in a loyalty scheme. H

owever, 10% of GI Insight’s results were 18-24-year-olds, and recent mobile-only schemes such as that from London-based Yoyo have proved more successful among Generation-Y, suggesting mobile tech may still need to be at the forefront marketers' minds, in maintaining interest among younger scheme users. 


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