Paolo Bortolotto, Regional Head of Products & Platforms, Loyalty Solutions, Asia Pacific, Mastercard
Millennials, the most talked about generation today, present a new opportunity in the loyalty program landscape across Asia Pacific. By 2020, a majority (60 percent) of the world’s millennials are expected to live in Asia, and millennials across the region will have more spending power – an estimated US$6 trillion in disposable income – than any generation before.
Earlier this year, Mastercard released an inaugural multi-market study on Asia Pacific’s loyalty landscape, “Achieving Advocacy and Influence in a Changing Loyalty Landscape”, and found that contrary to popular belief, millennials across seven markets – Australia, China, Hong Kong, India, Indonesia, Japan and South Korea – are among the most loyal of today’s consumers. They hold a higher number of loyalty memberships than the average across the region: 8.3 loyalty programs per millennial versus a regional average of 7.6.
Winning over millennials is therefore a critical ingredient to sustaining a successful loyalty program. Loyalty program providers, now more than ever, need to transition away from traditional earn-and-burn levers and invest in smarter initiatives to suit the evolving tastes of the millennials. Here are a few key takeaways that providers should take note of to win over the millennial consumer.
- Millennials want instant rewards
As digital natives, millennials are used to obtaining information immediately. Similarly for loyalty programs, millennials prefer instant gratification when it comes to the type of loyalty benefits or rewards they receive. For example, a majority of the millennials surveyed in the study indicated a preference for loyalty programs that offer cashback or discounts versus special privileges or airline miles. The ‘instant’ factor is key to keeping millennials engaged, particularly in Asia Pacific’s crowded loyalty space where they have plenty of options.
- Millennials are digital-first and want to communicate
Millennials are the first-generation of digital natives and prefer to interact with loyalty programs that enable them to easily manage their accounts via both a website and mobile app. In Australia, of the millennials who have mobile app access, 67 percent said that the value they received from their primary loyalty program has increased over the last two years. Despite so, Mastercard research found that only 40 percent of the consumers are able to interact with their loyalty programs via a mobile app.
Therefore, advancing digital platforms and experiences within the loyalty program design is key for effectively connecting with millennials. This presents endless opportunities to drive the ultimate customer experience for consumers through improved digital interactions as well as leveraging opportunities to personalize program offers to the individual, all whilst ensuring optimal communication frequency and channel access is achieved.
- Millennials value a personalized experience
There is a growing appetite for loyalty programs that can customize rewards based on the interests and preferences of members. Millennials in Asia Pacific have indicated lower levels of satisfaction with their ability to personalize their loyalty program. Regionally, only 36 percent of consumers reported being highly satisfied with the level of personalization. Therefore, a one-size-fits-all approach will not work with millennial consumers across the region, whom have come to expect highly personalized experiences.
Thankfully, millennials in Asia Pacific also responded as the group most willing to share personal information in exchange for customized and personalized rewards and benefits. In India for instance, 80 percent of millennials are willing to do so. This opportunity offers loyalty program operators more room to influence consumer behavior with personalized and data driven experiences, which can deliver increased engagement and improved return on investment (ROI).
None of this can be considered in the absence of security however. Loyalty program providers must assure members that their personal details will not be compromised, and a solid infrastructure is in place to keep the data well protected and safe.
It appears earning the loyalty of millennial consumers is just half the battle. To ensure that they stay loyal, businesses have to evolve and tailor their loyalty programs to suit the needs of the millennials. Programs that are user-friendly, highly digitized, personalized and offer obtainable rewards will be the ones that gain loyal millennial members for life.
This article was originally published on Paolo Bortolotto’s LinkedIn page here.