Fuel Rewards Have Strong Impact With Millennials
DALLAS — Programs that help members save money on fuel could be critical in getting more members of the millennial demographic into the door, according to a new research report from loyalty marketing company Excentus Corp.
Millennials, who make up 25 percent of the U.S. population and spend more than $200 billion annually, often say they support specific retailers or brands, suggesting they are a brand-loyal demographic. But according to Excentus, millennials actually are more likely than older consumers to be willing to switch to a different retailer or brand when offered a valuable-enough incentive.
“Remember: They entered the job market at the bottom of the recession, and they’re as open to saving money as older consumers,” Brandon Logsdon, president and CEO of Excentus, told Retail Leader, a sister publication of Convenience Store News.
“In our survey, for example, they were actually 12 percent to 18 percent more willing than middle-aged and baby boomer consumers to switch brands or stores if, by doing so, they could earn rewards from everyday purchases to save money on the cost of gasoline,” he continued. “They also join loyalty programs for the same reasons as older consumers: to save money any way they can, and to earn everyday-value points [and] rewards from everyday purchases.”
Excentus’ report, The Road to Rewards: What Drives Millennial Loyalty, details the results of a November 2015 consumer survey performed by Ipsos eNation. The survey found that:
- When given the chance to save 50 cents to $1 on gas, 56 percent of millennials (vs. 46 percent of gen Xers and 41 percent of boomers) are willing to switch grocery stores.
- When given the chance to save 50 cents to $1 on gas, 55 percent of millennials (vs. 38 percent of gen Xers and 28 percent of boomers) are willing to switch brands.
- Millennials (19 percent) are more likely than gen Xers (8 percent) or boomers (7 percent) to join a fuel savings rewards program based on the recommendation of a relative or friend.
However, barriers do exist with some millennials when it comes to joining a fuel perks program. One particularly difficult barrier for retailers to address is that nearly one-quarter of millennials (22 percent) don’t even own a car.
Other barriers could be overcome more easily. According to the survey findings, 21 percent of millennials are not aware of such programs’ existence, and 16 percent simply don’t belong to any rewards programs.
Additionally, 54 percent of millennials (vs. 67 percent of gen Xers and 78 percent of boomers) don’t pay attention to the cost of fuel, even though they embrace saving money on it.
Marketing programs geared toward creating awareness around the cost of gas and the benefits such programs provide millennials could be an opportunity to grow program membership, Excentus said.
Easing the ability to check reward status also could help grow millennial membership, especially since, at 13 percent, millennials are more likely than gen Xers (10 percent) and boomers (7 percent) to check their reward status on a daily basis.
Thirty-three percent of millennials check their reward status from a mobile app (compared to 16 percent of gen Xers and 6 percent of boomers), and 27 percent check from a smartphone (compared to 14 percent of gen Xers and 7 percent of boomers), the report highlighted.
“Raised on the Internet and undeterred by technology, millennials expect their favorite food companies, retailers and brands to understand and cater to their characteristics and behaviors,” Logsdon said. “Many of their daily brand interactions occur on smartphones and mobile apps, and they assume brands will have a robust online and mobile presence.”
Based in Dallas, Excentus Corp. is a provider of loyalty marketing programs and services that utilize cents-per-gallon fuel savings as the ultimate consumer reward.