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Loyalty & Millennial Marketing

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Loyalty Marketing is at a crossroads while the 80 Million + segment of Generation Y (Millennials) is growing in importance to companies across North America. This presentation provides a beginning insight into how we can shape Loyalty programs to engage and retain the interest of Millennials.

Published in: Business, Technology

Loyalty & Millennial Marketing

  1. 1. How loyalty marketers can successfully engage the new generation of consumers © 2009 hanifin loyalty llc
  2. 2. Some facts about Gen Y Born between 1977 – 1996 (aged 12 – 31 today) 77 - 80 Million (almost 25% of US population) Almost equal to Boomers in size, 50% more than Gen X Most ethnically and racially diverse generation in US history Super-sized “me” generation 2
  3. 3. Yin & Ying of Millennial Makeup 3
  4. 4. Technology “Totally Immersed” Survey of 7,705 college students in the US during 2007: 97% own a computer 94% own a cell phone 60% own some type of portable music and/or video device 49% download music using peer-to-peer file sharing 34% use websites as their primary source of news DNT TXT WHL U DRV Who’s in charge … the user or the device? 4
  5. 5. Communication “Always Plugged In” We know they are immersed 76% use Instant Messaging 75% have social networking account 28% own a blog and 44% read blogs 95 Million active texters in US = 12 Billion messages/Mo. But their use of channels varies by segment Teens text more than overall population (73% vs. 52%) Have lower 25% response rate to SMS ads Only 15% want to use a mobile device as means of payment 5
  6. 6. Outlook – It’s all about me… “Entitled…..but Loyal? "You now have a generation coming into the workplace that has grown up with the expectation that they will automatically win and they'll always be rewarded, even for just showing up“ Mary Crane, Consultant "I believe that they actually think of themselves like merchandise on eBay“ Marian Saltzman, J. Walter Thompson “Want to rock their iPods, set their own flexible work schedule, and still be CEO by Friday” Morley Safer, CBS News 6
  7. 7. A New Breed of Consumer Not just a shift in behavior, but a wholly different consumer Favorite Brands • Adidas Gen Y teaching parents about technology and • American Apparel • Apple parents rely on them for advice on what to buy • Ben N Jerry’s and how to use it • • Converse H&M • JetBlue • Levi’s Influence will be felt across Gen X and • Red Stripe • Target Boomers • Trader Joe’s • Vitamin Water • Volkswagen • Whole Foods Consumer 2.0 – the first generation not to “grow out of it”? 7
  8. 8. Purchasing Influences 62% of global teens are apathetic about advertising 42% make purchase decisions based on recommendations of friends Questions: » Gen Y signs on to online banking more or less than download music? » Gen Y uses credit card more or less than Boomers? 8
  9. 9. Why Should We Care? 9
  10. 10. A lot has changed… …since loyalty “took off” in 1981 Loyalty Marketing American Airlines launched AAdvantage Birth of Loyalty Marketing as we know it today The older end of Gen Y, born the same year, is 27 today and entering prime earning years Cultural Change IBM launches it's first PC The term “Internet” first mentioned MTV (Music Television) is launched Arnold Schwarzenegger was just a body builder 10
  11. 11. CMO’s Recognize Change Most recognize the need for change but have yet to embrace the challenge and define a customer strategy for Gen Y. 75% believe that the millennial generation will have a major impact on their business over the next 3 years 54% admit that they do not have a strategy for targeting attracting or retaining Millennials as customers 11
  12. 12. Good News for Loyalty Marketers “The drivers of loyalty are not materially different across the generations - the difference is how we communicate and the impression we make” Howard Lax, Sr. Consultant, Harris Interactive 12
  13. 13. Social Networking Participation 13
  14. 14. Understanding Social Media? Major League approach to Strategy Play by Play Announcer » Your web site is the necessary foundation Color Commentary » Blog is a platform for opinion and thought leadership Player Roster » Use LinkedIn to assemble your business network and circle of influence Groupies » Use Twitter to gather a crowd, then choose who to speak with Inner Circle » Use email, the phone, and in person for deeper conversation Fans » Use Facebook to build an audience Sponsors » Your valued Customers/Clients should be treated to Newsletters and more personalized digital correspondence 14
  15. 15. Who to Watch? 15
  16. 16. Bank Products for Gen Y Examples of Leadership Bank of America “Keep the Change” » Launched in 2005, now with 2.5 Million customers enrolled » 700K new ckg & 1M savings opened so far PNC Bank “Virtual Wallet” » 2007 launch: online bill paying with budget and savings tools » 20K accts opened thru Dec. 08, 65% new, 70% Gen Y Wells Fargo “My Spending Report” » Online budget & bill paying suite offered with new ckg acct » Millennial “bundle” - easy to understand & to use 16
  17. 17. Young and Free Alberta 4th largest credit union in Alberta Microsite featuring “Larissa”, now Myles » Talks w/GenY in their language Results: 8 month test in 2007 » 39,082 unique visitors » 2,010 new accounts » $2,875,000 new balances » Equal to $179K unpaid media coverage www.YoungFreeAlberta.com 17
  18. 18. Pizza Hut - Facebook "Pizza Hut Interface” - a new channel for placing orders » Mobile, text, widget, web, telephone Access to 300,000 Facebook fans Recently launched "Lotta Pizza Lotto“ » People who become a "Pizza Hut" fan are eligible for weekly $50 gift card "We are moving fast to put our online customers in charge. Any way they want to order from us, we'll be there for them.” -Bob Kraut, Pizza Hut MarCom VP 18
  19. 19. Matching Up With Gen Y Lifehacks Community Frictionless interaction Authentic brand Convenience, reliable service Appreciation Personal Transparency Tailored approach Limit the Loyalty Asterisk™ Seeking to be served Show Respect 19
  20. 20. Final Thoughts 1. Meet them where they are » Sell less, share more, offer lifehacks 2. Minimize the Loyalty Asterisk™ » Position your brand as trusted advisor » Tell them about universal default, the $35 burrito 3. Fulfill the promise of data » “1 to 1” marketing may finally be affordable » Social networking opens the door 4. Don’t try to rationalize the need » They think differently than we do…you don’t have to “get it” 5. Don’t forget everything you learned » Remain attentive to profitability & marketing ROI » Be attentive to traditional financial models 20
  21. 21. Questions? Bill Hanifin Bill@HanifinLoyalty.com +1.954.531.9277 Read the Loyalty Truth Blog: http://blog.hanifinloyalty.com/ 21

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