Brand Loyalty Must Extend Beyond Enrollment Programs

As part of Solutions Review’s Contributed Content Series—a collection of contributed articles written by our enterprise tech thought leader community—Christy Parrish, the Director of Client Partnerships at Cordial, explains why brand loyalty strategies must go beyond enrollment programs.

Loyalty programs are falling out of favor with the younger generations. Less than 25 percent of Gen Z is enrolled in a loyalty program—more than double that of any other generation. One in five Gen Z consumers say they want to do business with a brand at least ten times before considering joining its loyalty program. One conclusion we can draw from this data? Trust in brands—at least among Gen Z—is decreasing.  

But that doesn’t mean loyalty programs have lost their value. Nearly 75 percent of consumers indicate that recent economic turbulence has made them more likely to enroll in a loyalty program. Top incentives attracting them include access to exclusive offers, free perks, and savings on everyday purchases. Businesses taking it further by offering experiential rewards, aligning their efforts with customer values, and creating emotional wellness connections reap much greater success. 

Attracting and Retaining Younger Consumer Generations 

Gen Z is the largest generation in the U.S., and their spending power is expected to grow significantly in the coming years. Value-conscious and brand-loyal, these digital natives have already become a significant force in the retail market. Brands that want to succeed in the future must understand Gen Z’s needs and wants, adapting their strategies accordingly to appeal to this generation. Here are three approaches to try: 

Experiential rewards 

According to a recent Cordial survey, access to exclusive offers is a top incentive for Gen Z. These rewards offer something transactional rewards, like discounts or cashback, cannot—a unique, memorable experience. Loyalty programs can include experiential rewards that: 

• Provide exclusive experiences like early access to new products, behind-the-scenes tours, meet-and-greets with influencers, or mobile coupons. 
• Personalize the experience because the more tailored it is, the more likely customers will feel valued and appreciated. Rewards should align with customer interests or previous purchases. 
• Offer a social experience, as rewards are more fun when shareable with others. Rewards might include tickets (or discounted tickets) to an event, like a sporting event or movie screening. 
• Make the experience memorable since their goal is to create a lasting impression. 

Offering unique, memorable experiences enables retailers to create deeper connections with their customers and build long-term loyalty. To maximize the value of these rewards, retailers should ensure they’re relevant to the target audience and set clear expectations for how customers can earn and redeem rewards. Also important? Tracking the results to evaluate the program’s effectiveness. 

Eddie Bauer, for example, offers its Adventure Rewards program. Customers earn points with each purchase and can use those points to access quarterly rewards, which include credits toward future purchases. Members of this program are also invited to member-only events and experiences.

Value-based marketing 

Authenticity matters to the younger consumer generations. Gen Z members are socially conscious consumers and expect brands to align with their values, including treating employees respectfully, using consumer data responsibly, offering products best suited to their needs, giving back to their communities, and reducing their environmental impact. 

Value-based buying aligns with younger shoppers’ goals of purchasing products and services they consider good quality and worth the price. Retailers can capitalize on value-based buying by: 

• Offering high-quality products at a fair price since Gen Z will pay for quality but don’t want to be overcharged. 
• Promoting their products’ sustainable features, such as the materials they’re made from or the ethical production methods used for their manufacture. 
• Making it easy for shoppers to find information about their products with an easily navigable website that provides clear product descriptions and reviews. 
• Using social media to connect with consumers since these platforms are great for sharing information about products, promoting sales and discounts, and engaging with shoppers personally. 

Emotional wellness connections 

Another successful strategy for generating customer loyalty involves fostering emotional connections with customers and making them feel special. Over 80 percent of consumers say they spend more with brands where they feel appreciated, and 87 percent will advocate for brands that make them feel valued.  

Special treatment, like a brand loyalty program or discount, doesn’t need to be concrete. It’s a brand’s intentional effort to offer personalized attention, asking customers about their preferences or recommending products they might like. Showing appreciation can include a customized thank-you email or sending a handwritten note. Other strategies for creating emotional wellness connections with their customers include: 

• Supporting mental health awareness by donating to charities promoting mental health or hosting events that raise awareness of mental health issues. 
• Offering products and services that promote emotional wellness. 
• Creating physical spaces where customers can relax and de-stress and providing free access to meditation apps or calming music. 
• Empowering employees to advocate for emotional wellness and training them to create welcoming, supportive customer environments. 

Gen Z is diverse, digitally savvy, concerned about the environment, and skeptical of traditional advertising—and they love experiences. To connect with this generation, the first to grow up with the internet and social media, retailers must rethink how to attract and retain these consumers. 

Retailers should embrace authenticity and transparency about their brands and products, focus on sustainable practices, and promote sustainable products. Brands should offer personalized experiences, including loyalty programs, and embrace innovation, thinking creatively to find other ways to engage Gen Z through experiences and interactive content. These strategies will help retailers connect and build lasting brand loyalty with Gen Z consumers.