NEWS4 March 2020

Loyalty programmes less popular with Gen Z

Behavioural science News Trends UK

UK – While more than three quarters ( 76%) of Brits are current members of a loyalty programme, their appeal seems to be waning among 18- to 24-year olds, according to new research.

Forty-four per cent of men aged 18-24 and 33% of women in the same age group don’t use loyalty programmes at all, according to a whitepaper by brand partnerships and reward agency Mando-Connect and YouGov.

So while 18-24s like the idea of loyalty programmes  – 79% think they are a great way for brands and businesses to reward their customers – they are not seen to be tailored to their needs, not addressing social purpose and sustainability well and not offering good enough value among other things.

Charlie Hills, managing director and head of strategy at Mando-Connect said: “Rewards are the most important factor for Brits in loyalty programmes. Loyalty marketers need to sit up, take notice and understand what people really want. What people really want from loyalty programme is great rewards.”

Sam Tatam of Ogilvy UK’s behavioural science team adds:  “While the research shows discounts play an important role in driving loyalty, we shouldn’t neglect the range of psychological levers available to us. Relying too much on finite or rational incentives doesn’t just force tough economic decisions for brands, they also limit our creative freedom. By better understanding the additional ways of creating ‘psychological value’, we can work to complement these initiatives.”

The research was conducted among  2,024 nat rep adults online in January 2020 via YouGov Realtime Research. It also used YouGov Profiles Data.