Young millennials earn least points but make better use of retail loyalty schemes
18 to 24-year-olds earn the least amount of loyalty points a month compared to any other age group, but proportionally make the most use of retail loyalty schemes to save money.
Yoyo which combines fast mobile payment with automated loyalty for retailers, analysed how 15000 of its app users collect and use their loyalty points over a two month period.
The data found that 18 to 24-year-olds earn an average of 2536 loyalty points a month – less than any other age group.
However, proportionally they use more of their loyalty points (an average of 1498) in the same time period, which means they make the most use of loyalty schemes to save money.
Based on the assumption that for every £1 spent, customers earn 100 points*, 18 to 24-year-olds build up £25.36 worth of loyalty points each month, and go on to spend £14.98 worth on rewards in the same time period – nearly 60% of the loyalty points they earn.
In comparison, Yoyo found that while 35 to 44-year-olds earn the most points every month (an average of 3509), they proportionally use the least amount (1939) to claim rewards.
This means 35 to 44-year-olds earn an average of £35.09 worth of loyalty points each month, but only go on to spend around £19.39 of these points on rewards in the same time – just over half (55%) of what they earn.
25 to 34-year-olds follow a similar pattern to their elders, collecting an average of 3357 points a month – just 152 points less than 35 to 44-year-olds. They go on to spend £19.08 worth of their loyalty – 57% of the points they earn in that time period.
Commenting on the data, Dom Povey, head of retail product at Yoyo, said: “There is a common perception that younger people, who are typically less wealthy, are more susceptible to money saving offers – and Yoyo’s data proves this!”
“A large number of those making the most of loyalty schemes are using Yoyo in education environments, such as student unions and canteens, which enforces this line of thought and presents a strong opportunity for retailers to drive consumer behaviour using points as a reward.
“Think of the potential if a campaign was set up that meant students could earn double points on certain product lines that a retailer wanted to push amongst younger millennials.”
Interestingly, while 25 to 34-year-olds come between each age group in terms of points, they actually convert their points into more vouchers than any other age group.
Out of the 5000 Yoyo users aged 25 to 34-year-olds analysed, an average of 2832 vouchers were converted from points each month.
This suggests that this age group, instead of saving their points for the bigger rewards, are converting them into vouchers sooner to go for more items at a lower points value.
Povey added: “This highlights the importance of segmentation when analysing customer behaviour. Despite being quick and convenient, a “one size fits all” metric can be misleading when measuring customer interaction.
“One of the big advantages of a loyalty programme is the level of granularity it enables when analysing customer behaviour. This in turn leads to a more accurate representation of behaviours and more informed business decisions.”
Overall, once points are converted into vouchers, their use across all age groups analysed is very high:
18 to 24-year-olds use 90.6% of the vouchers they convert from points earnt in the same month.
25 to 34-year-olds use 89.9% of the vouchers they convert from points earnt in the same month.
35 to 44-year-olds use 89.4% of the vouchers they convert from points earnt in the same month.
Povey continued: “Redemption rates are an important health indicator for a loyalty programme.
“If customers are not redeeming the rewards you are offering, it suggests they do not value them, which could ultimately lead to a drop in customer engagement overall. Without customer engagement, your loyalty programme can offer your business very little value.”
* Loyalty schemes through Yoyo work on £1 = 100 points.
-15000 Yoyo app users were analysed:
(5000 18 to 24-year olds)
(5000 25 to 34-year-olds)
(5000 35 to 44-year-olds)
(Older age groups were also analysed, but not included in this story – this had no effect on the above findings)
-Time period: February – March 2017
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