Demystifying Brand Loyalty Among Baby Boomers: Research Report

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Page 4 EXECUTIVE SUMMARY Loyalty is not one-size-fits-all. Consumers have different needs and preferences. That is especially true of baby boomers, or individuals born between 1946 and 1964. The assumptions that this older generation is set in its ways and is unwilling to change are inaccurate. For this group, loyalty is dynamic because it continues to evolve. To generate loyalty from this segment, brands must show value, be persistent, and keep offerings simple. This research was commissioned to understand the attitudes of baby boomers toward loyalty and rewards programs and what activities motivate them to remain engaged with a brand. This report is the third of a three-part research series. Part 1 of the report features millennials, consumers born between 1981 and 1997. Part 2 of the report focuses on Generation X, consumers born between 1965 and 1980. Baby boomers belong to an important demographic that deserves attention. This generation not only has power in numbers—with an estimated population of 74.9 million this year—but it also has sizeable spending ability that shouldn't be ignored. While baby boomers are interested in loyalty programs that help them save money, they also favor cash back or credit, free products, and the chance to use loyalty program points to make charitable donations. More than 70 percent (71.2 percent) of those surveyed say they don't earn points for engaging with a brand (e.g., tweeting, posting comments or reviews, opening and clicking emails, etc.). And nearly half (48.4 percent) say they want to earn points for engaging in a loyalty program. Surveys are a good way to engage baby boomers—86.8 percent say they want to earn points for responding to surveys, compared to 78.2 percent of Generation X and 74.5 percent of millennials. When it comes to brand loyalty, baby boomers have mixed opinions. According to the research, less than half of those surveyed (46.4 percent) say they are extremely loyal or quite loyal to their favorite brands. Some 41.4 percent of respondents say they are moderately willing to switch to another brand's loyalty program. Similar to Gen Xers, the top reasons for opting out of a loyalty program are that the rewards aren't compelling or relevant (65.8 percent), the program is too complicated (49.1 percent), and there aren't enough ways to earn points (43.9 percent). It is recommended that brands: • Create messaging that is relevant and targeted to the baby boomer audience to pique interest from this generation • Keep loyalty programs simple and easy to navigate, from registration to reward redemption • Demonstrate value continuously throughout the loyalty program to maintain customer engagement • Offer exceptional customer service to maintain loyalty and heighten brand perception • Feature engagement-based activities to drive loyalty and help enhance baby boomers' lifestyles Loyalty. Engaged. 1. This Year, Millennials will overtake Baby Boomers, Pew Research, Jan. 16, 2015 1

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