Millennial Brand Loyalty Still Going Strong
We’ve heard reports over and over about how millennials are not as brand loyal as their baby boomer elders. It might be wise to do some data drilling to understand exactly what is going on with product loyalty. Because, according to a recent study of 2,000 millennials completed by Adroit Digital, 64% of millennials are as brand loyal or more brand loyal than their parents.
They are an important demographic because they are the largest generation in U.S. history and spend $600 billion annually. So why the disconnection in understanding millennial brand loyalty?
Speak the native language
Seth Godin, a marketing consultant and author of Purple Cow, among many other bestselling business books, writes about how technology has separated society into two groups: the natives and the immigrants.
The natives are those who are tech-savvy and comfortable with learning and adjusting to the ever changing world of technology. The immigrants are the members of society who didn't grow up in the age of technology and feel technology is expensive and changing too quickly to keep up.
Millennials by and large are natives to the tech world; in fact, they count on technology advancements to stay up with their every growing expectation.
In the Adroit Digital study, 39% of all respondents believe that brands that don't advertise through mobile devices, such as smartphones (don't call them cell phones) and tablets are outdated and undesirable. Social advertising has the most credibility to influencing brand decisions for 32% of the respondents. In addition, 26% of millennial respondents said social media is the most likely channel to introduce a new product they will consider giving a try.
It would be wise to consider how your brand is being positioned to attract the members of this demographic. Sixty percent of millennials believe that social media has the most influence over their perception of a brand and its value. At the bottom of influence is radio, billboards and print media. To reach millennials, you have to speak their language, the language of the natives to technology. Properly positioning your brand to where this generation will see it and the marketing channels you use to reach this generation will have a great impact on the brand reputation you will create.
Loyalty for this demographic is strong until they have been given a reason to leave. Once they leave they rarely return, unlike the baby boomer generation who tend to eventually come back.
Keep them connected
Of those surveyed, 77% said they are evaluating a brand on a different set of criteria than their parents. In the ‘80s Ford used the slogan, “Quality is Job One!” For millennials, product quality ranks fourth in their decision criteria. Value and price is the number one determination of brand selection for 62% of respondents. The second most important factor at 55% was a recommendation by a friend, and not surprisingly only 25% highly value a recommendation from mom and dad.
Strategies for marketing to loyal boomers and expecting them to bring along that loyalty in their children are a failed strategy. Millennials are value shoppers, well-informed with an expectation to be catered to in marketing and service. They are not planning on following in anyone else's footsteps; rather, they are looking for their own trails to blaze. The brands that truly understand this will maintain that brand loyalty.
Thirty-eight percent of millennials will quickly drop a brand if the company has been reported to have bad business practices. The trust element has never been more important to a demographic. If poor practices and insufficient responses to errors occur, this age group will not only leave but will actively spread the word on why they are no longer loyal to your brand.
Get ready to work harder
Brands will have to work harder to earn brand loyalty than they did to earn their parent's loyalty, said 70% of survey respondents. Advertising is considered a weak effort and not enough to reach this age group. They want to be engaged by a brand, not just talked at. In fact, 52% expect brands to listen to consumers and be willing to change based on that feedback. Gaining brand loyalty is no longer a one way conversation. Forty-four percent of respondents have the expectation of open dialogue with a brand that is trying to get their loyalty.
Russell White is president of Banking Agility. He can be reached at 704-626-0630 or Russell@RussellWhite.com.