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Brand Loyalty and Appealing to the Millennial Market

Brand Loyalty and Appealing to the Millennial Market

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Start a management degree at American Public University.

By Jacqueline Garza, Tina Rojas and Rebecca J. Stigall
Alumni, American Public University and Mu Kappa Tau Marketing Honor Society Members

Brand loyalty has a very deep meaning not just for companies, but for individuals as well. People have known certain brands for many years now — like Kraft, Pepsi and Coca-Cola — and continue to display their brand loyalty by purchasing those items when they need them.

There are individuals who are deeply devoted to certain brands. For example, formal restaurants or even fast-food places do not carry all types of the same soda; however, there are some individuals who drink one type of soda over the other because that is what they love.

Companies Must Focus on Brand Loyalty to Make Human Connections with Millennial Customers

Focusing on brand loyalty is key to making a connection with consumers. Customer service, value and honesty is why marketing is so intertwined with company branding. The key areas of customer service, value and honesty need to work together.

Once people start purchasing a company’s products, they will then tell their family and friends about that product they have and become advocates. Building trust goes a long way when it comes to brands and the loyalty of consumers.

Defining Millennials

Millennials (also known as Generation Y) are individuals who became adults at the beginning of the 21st century. The oldest Millennials are now well into their thirties and number more than 90 million U.S. consumers.

One interesting thing of note is that the definition of Millennial varies. For those who were born in 1981, sometimes they fall into the definition of Millennial and sometimes they’re too old.

The term “Xennial” was created to capture consumers born between 1977 and 1983; these consumers characteristically have the traits of both Gen Xers and Millennials, but do not quite fall into one category.  Other sources also label consumer categories as Gen X, Gen Y and Gen Z.

Worldwide, Millennials represent more than four billion consumers, making them the largest generation to date, and they account for nearly half of the workforce of some nations. Millennials are defined by several notable factors, which include technology, a low tolerance for risk, a fragmented sense of culture and skepticism. These factors have presented marketers with challenges and opportunities unique to this segment of consumers.

Marketing to Millennials Requires Companies to Utilize Different Techniques than Traditional Marketing

Because Millennials are digitally savvy, social networking often guides their perceptions of the world around them. They have more purchasing options than any other generation before them has had.

Interestingly, Millennials have been said to have difficulty with independent thought and decision making. The dichotomy between options and the Millennial fear of taking risks becomes even more interesting when you consider that the amount of information available to Millennial shoppers in the digital age has also earned them the label of the most sophisticated market segment.

According to a Fall 2018 report from The Nielsen Company, Millennials want their companies to display a social conscience. This report stated that Millennials indicated that corporate social responsibility (CSR) was extremely or very important to them: 70% would purchase from a brand that handled a social issue well, and only 30% would be less likely or much less likely to buy if it wasn’t handled well. Additionally, the top five social issues reported as important for brands to address for Millennials were food and hunger, environmental sustainability, education, public health and racial equality.

A study by Bond Brand Loyalty reported that Gen Z and younger Millennials are more willing to pay for enhanced benefits in a loyalty program by 36% and 37% respectively. In addition, a 2010 study completed in 2010 determined that what life stage a person was in (e.g. professional vs. student, married vs. single), not necessarily their age category, determined what level of loyalty (hard core, split, shifting or switchers) they would display.

In a Retail Wire article, Jasmine Glasheen cited a Daymon Worldwide study, which found 29% of Millennials usually purchase from the same brand compared to 35% of Generation Xers, but also noted that a Valassis survey found that brand preference was as high as 57% for Millennials who were parents.

To Market Successfully to Millennials, Create Brand Loyalty, Awareness and a Social Conscience

Brand loyalty is the unique way in which consumers connect with the brands they prefer. Traditionally, these consumer/brand relationships have been relatively stable, driven by product marketing efforts. But the Millennial generation has introduced more into the relationship requirements by specifically demanding more from brands than previous consumer generations.

Companies are now incorporating more than marketing into their brand awareness marketing programs. Brands must clarify their positions on issues of politics, ethics and values. For instance, many companies such as Starbucks work to include ethics as part of their mission.

Millennials are less loyal to specific brands, especially if brands fail to meet certain values benchmarks and social responsibility thresholds. Millennials may also split their brand loyalties if more than one company meets their high standards. But the good news for organizations is that Millennial consumers are more than willing to pay extra to have their expectations met.

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About the Authors

Jacqueline Garza graduated with an MBA in Marketing from American Public University in 2019. She currently lives in Nebraska with her spouse and two daughters. Jacqueline separated from the USAF in September 2015 and enjoyed visiting new places while active duty for about seven years.

Tina Rojas graduated from American Public University with an MBA in Healthcare Administration in 2018. She is a veteran of the U.S. Army Reserve and currently works as a process improvement coordinator at the Veterans Affairs Greater Los Angeles Healthcare System. She lives in the Los Angeles area with her husband and two sons.

Rebecca J. Stigall graduated from American Public University with an MBA in Marketing in 2017. She is currently a first-year doctoral student. Rebecca is also a digital media and marketing professional and serves as an adjunct instructor at Ohio Business College and Bryant & Stratton College. Her research interests include social media, digital marketing and ecommerce.

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