Millennials and Brand Loyalty: A Complicated Affair

AdroitDigital-Reasons-Millennials-Switch-Brands-Mar2014A lot of marketers’ time and energy is spent on Millennials, much of that under the assumption that it’s important to capture the attention and loyalty of this demographic while they’re young and impressionable. But while most Millennials (aged 18-33) responding to an Adroit Digital survey [download page] feel that they’re as – if not more – brand loyal than their parents, the vast majority also believe that brands today will have to work harder to earn their loyalty than they did to earn their parents’ loyalty.

What’s more, roughly three-quarters of respondents agree that they – and others their age – choose their favorite brands on a different set of criteria than their parents. And given their access to and familiarity with new technologies (e.g. mobile, social), about the same proportion feel that they are making smarter brand choices than their parents.

That doesn’t mean that they’re less loyal, though. About one-quarter feel that they and others their age are more brand loyal to their favorite brands than their parents are to theirs, while another 40% believe that they display the same level of brand loyalty.

For the time being, though, many Millennials are using the same brands as their parents. 1 in 5 (27% men; 12% women) claim to be brand loyal and using the same brands as their parents, while another 43% say they use many of the same brands as their parents, though not all. In combination, then, some 63% use or are loyal to many of the same brands as their parents.

That’s more the case for younger (18-25; 72%) than older (26-33; 56%) Millennials, though, suggesting that as they age, Millennials are making their own brand choices. Interestingly, the data suggests that Millennials’ brand loyalty respective to their parents’ also decreases with age: while 31% overall feel that they are less brand loyal than their parents, that figure was considerably higher among older (37%) than younger (23%) respondents.

That’s an important consideration for marketers working under the assumption that Millennial customers will remain loyal as they age. While a change in family or relationship status emerges as the least-cited reason for switching brands (by only 20% of respondents), a change in financial situation (56%) is the top reason Millennials give for switching. Given the economic volatility experienced by today’s youth, that’s a cause for concern for brands.

In fact, a closely-related factor is also an apparent driver of disloyalty: some 41% of respondents indicated that a brand’s price increase causes them to switch. That was a bigger reason for switching than recommendations from friends and family (38%) and respondents finding newer, more attractive brands (37%), among others. Of course, while price increases might drive away young customers, strong value propositions can draw them in: a leading 62% said that value and price would cause them to select a new brand for trial, outpacing other selection criteria such as friend recommendations (55%) and brand reputation (47%). Once again, word-of-mouth looms large for this demographic. (Brand exposure through traditional advertising was the least-cited criterion, though it was twice as influential among women than men.)

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To stay relevant, the dominant brand virtue appears to be customer-centricity. When asked how brands will remain relevant to respondents and others their age moving into the future, a leading 52% said that brands must be willing to change based on consumer opinion. The next-most common responses were also related: 44% said brands must engage in open dialogue through social channels; and 38% said that brands need to become less about the brand and more about the consumer.

Other Findings:

  • Of 7 industry categories listed, Millennials said they were most brand-loyal to mobile phone providers (59%) and clothing/shoes/accessories (56%) brands, and least loyal to hotels and airlines (16%).
  • Somewhat surprisingly, only 39% agree that brands that don’t advertise on mobile, smartphones and tablets are less desirable and outdated. That feeling, however, was much stronger among younger Millennials (50%) and male Millennials (50%).

About the Data: The study was fielded from January 21 through January 27, 2014. The survey targeted a random sample of US consumers who self-identified as 18–33 years of age and who own both a smartphone and a personal computer. The study garnered 2,000 completes. 54% of respondents are male and 60% are aged 26-33.