Public Relations & Social Marketing Insight

Loyalty is an increasingly fleeting thing. In fact, the average Gen Y mother now defines “brand loyalty” as a window of allegiance lasting 6-12 months before she moves on to explore alternatives. And suffice to say, there are plenty of alternatives out there for her to explore, regardless of category. So, given the increasingly elusive nature of loyalty and the abundance of brand and product choices available, one might be inclined to argue that there’s never been a more important time for you to implement a loyalty program.

But it’s simply not true and here’s why…

Any loyalty program you create probably won’t work. But don’t feel too badly because as it turns out, most loyalty programs don’t work – at least not the way the companies who own them would like to believe. In fact, a recent study from Edgell Knowledge Network found that the level of actual brand loyalty among consumers who are part of a loyalty program versus those who are not, is not materially different. 

So, why don’t most loyalty schemes work? Research points to several reasons....Loyalty programs are transactional. Loyalty isn’t....

To win over millennials, brands must incorporate participative benefits into their models....

In the new Millennial-inspired Participation Economy, the old definition of brand value — the one that worked for decades — is dead. As marketers, we knew that the sum of our core functional and emotional benefits divided by price would give us a proxy for brand value. Stronger brands had more price elasticity. However, the old definition no longer holds if you want to engage Millennials or older generations that are adopting a “Millennial Mindset.”

THE NEW DEFINITION OF BRAND VALUE

Millennials don’t just want to buy your brand, they want to be a part of it. They’re looking for ways to participate. And they want to understand why you do what you do not just what you want to sell. As a result, the brand value equation has morphed to include participative benefits. This is key for tapping into Millennial passion — and therefore, Millennials’ dollars. In The Participation Economy, (emotional benefits + function benefits + participative benefits)/price = brand value. We’ll explore this more in a bit. First, let’s review who makes up this generation — and how they influence your other consumers, too....