Good reviews don’t come for free—at least where Asian millennials are concerned, according to new research by loyalty agency ICLP.
People in this much-courted age group, defined for the purposes of the paper as those born after 1980, are significantly more likely to share their opinions on a brand with their friends than previous generations have been. Positive recommendations, however, are conditional on the extent to which these young shoppers feel their loyalty is being rewarded.
In all five markets included in the survey—Australia, China, Hong Kong, India and Singapore—over 70 percent of millennials agreed that they would spend more with their favourite brand if they were better compensated for shopping there.
Present loyalty programmes aren’t cutting it with this age group at the moment, it seems, with fewer than four in 10 respondents in every market except India saying they feel that their custom is appropriately rewarded.
In India, by contrast, 64 percent of millennials are satisfied with the prizes they scoop when they shop at the same place and just 80 percent—low in comparison to near 100 percent in other markets—say they would cheat on their chosen retailer.
This anomaly may be explained as part of a broader love for loyalty schemes in India rather than a purely millennial habit, however: a 2016 report by the Collinson Group, ICLP’s parent company, found that age groups across India’s middle classes notched up significantly higher engagement with loyalty programmes than other mature markets such as Australia and Singapore.
By contrast, it takes a lot to impress a millennial in Hong Kong, where just a fifth of respondents are happy with the way their custom is rewarded, or Australia, where only 35 percent are satisfied.
ICLP offers a couple of possible explanations for this regional disparity, one being ‘loyalty programme fatigue’ in some markets. Perhaps young shoppers are simply sick of counting up points in order to get prizes. For example, Andrew Clarke, founder of Australia’s largest cash-back shopping website, Cashrewards, said recently that traditional points-based rewards programmes in Australia have become too complicated and will be all but defunct in five years.
Another clue may lie in the different levels of offer personalisation across regions. “Millennial shoppers value tailored offers generally more than older generations,” says ICLP’s report. While 55 percent of millennials in India feel they are receiving offers personalised to them, just 17 percent in Hong Kong, 33 percent in China and 32 percent in Singapore say the same.
The lesson for brands seeking greater loyalty in these less well-performing countries? Treat millennials as individuals and shower them with rewards accordingly. Birthday-related offers, for example, or discounts based on information the shopper has provided, will make millennials feel they have been specially favoured and may encourage them to open their wallets.
Overall, however, the report offers a refreshing caution to brands against chasing the attentions of millennials to the detriment of other generations. “Baby Boomers also make recommendations to their friends, although they usually demand a more well-rounded loyalty programme that includes high quality communication, trust and customer service,” says the report.