One bit at a time.
Nearly 73% of consumers value trust more than price, and see it as the second most important factor when it comes to purchasing decisions. In a generation where advertising sales has shaped the relationship between customer and brand, building a loyalty base has become increasingly difficult. And as millennials have become the world’s most powerful consumers, their purchasing attitudes are at the core of today’s marketing research and innovation practices. In the everlasting search for acquiring new customers, brands are continuously coming up with ways to attract these users.
That’s all fair game. But what about retention?
While acquisition practices keep on innovating, retention strategies such as loyalty programs are stagnant. Retailers still use reward cards, cashback deals, and sales offers to keep their good customers coming. These programs often only provide short-lived, tangible benefits that expire and do not grow with time. Yet, when increasing customer retention by simply 5% can boost profits as much as 25% to 95%, it is almost irresponsible for brands to overlook it. It is vital to look into purchasing patterns of millennial's, and the incredible potential they have as trendsetters. What is even more important, however, is to look at how millennial's are adopting new technologies and how this can help turn them into lifetime consumers.
Here at BITS we think loyalty should not have an expiration date, and consumer trust should increase with every purchase.
Millennial's are known to have slight commitment issues, and that is especially clear when looking at how often they change jobs (43% plans to change their jobs within two years), at what age they get married (27 for women, 29 for men), or when they buy their first house (only 1 in 3 manages to do so before 35), if ever. Same goes with their brand preference, or rather brand promiscuity, where buy, use & dispose rules. But what if, actually, millennial's have just gotten smarter? The most educated generation ever feels empowered to spend their time meaningfully, have a mutually beneficial relationship, and to buy a house only when they can afford it. Millennial's just want to trust their employer, their partner, and institutions that they are safeguarding their interests.
Millennial's don’t have commitment issues, they just pursue trustworthy relationships.
Simply put, consumers have gotten smarter and demand the best in all areas of their lives regardless of previous behaviors, may that be for life-long decisions or everyday needs. Brands know this and use it to attract new customers. Whether it is with great deals or futuristic shopping experiences, brands use the power of novelty to get millennial's’ foot in the door and click on their site. However, past the initial interaction, having obtained the desired result, users do not feel obliged to stick around. And brands do not invest in them to do so. This makes sense as brands see millennial's as somewhat opportunistic customers, only interested in their product while it’s trending. Millennial's, on the other hand, see brands as fishing for their attention with empty promises. It’s time to make this generation trust their favorite brands again (and again).
Here’s our bit of wisdom: brands can’t get to loyalty without trust.