Welcome back! This week, we’re talking about Gen Z brand loyalty.
Consumer brands spend a lot of money to attract and retain customers. In the past, that meant focusing on splashy advertising campaigns and, eventually, digital marketing to convert interested consumers into paying and, crucially, repeat customers. While this is a simplification of how brands build a loyal customer base, brands’ customer acquisition modus operandi is less effective on Gen Z than older generations, and also more difficult to execute in these modern, cookie-less times. Thirty percent of Gen Zers surveyed in the US and UK said they would “revert to their ‘go to’ brand for a new product or service” when making purchases, according to a recent survey. More than double that portion, 62 percent, said they would check out other options, even if they have a favorite brand. And among those with a favorite brand, more than 50 percent of Gen Zers would switch it up if another brand were cheaper or of higher quality. In other words: Gen Z can’t be tied down. In a booming market, brand loyalty is important. At the most basic level, it’s an arithmetic problem: without it, there’s little ROI on customer acquisition costs. But in a down market, where the average consumer pays closer attention to their purchases, it can make or break a business. Even if price or value isn’t the main factor driving Gen Z purchases, there are other forces pulling Gen Z from one brand these days. De-influencing, for example, is the trend where both influencers and regular shoppers alike post videos on social media urging others not to buy products that have disappointed them in some way. “Buy this, not that” Instagram and TikTok videos are also popular. Just as the name suggests, whoever posted the video shares alternate versions of similar products. Even someone who worships at the altar of [insert preferred brand here] might curiously eye its competitors. Strong brand, an ESG proposition, a rewarding loyalty program, and community are each important in building Gen Z brand loyalty. Don’t underestimate the importance of the flex: can you offer your Gen Z customers a product or service or experience they can’t get from your competitors—something that they can then show off to their friends? Maybe it’s a customizable order. Maybe it’s an exclusive, clout-generating collab.
Gamification, or adding elements of games like rewards and points to things that didn’t start out as games, is something Gen Z loves. But it creates loyalty only if your definition of loyalty is limited to repeat customer visits to a website. That reliance on Pavlovian conditioning alone could be shortsighted—even if it’s how the most frequented social-media apps increased their user bases. (It also exposes brands to the possibility that so-called Luddite teens, who have grown sick of always-on tech, might one day abandon a brand if the constant stream of notifications and nudges gets to be too much.)
To survive, brands need more than repeat visitors whose attention may shift with one wind gust. Brand executives must ask themselves, “What is it I actually want Gen Z to do? Do I want them to spend on more profitable products and services?” Asking these questions, understanding customer desire, and making a product so good and a brand’s mission so compelling that a customer is drawn to it—beyond neurological compulsion—is a solid start.
More than likely, that broader focus on brand building will appeal to every consumer, not just to Gen Z.