Consumer brands invest significant resources in acquiring and retaining customers, using splashy ad campaigns and digital marketing to attract interested consumers and convert them into loyal customers. However, building a loyal customer base is less effective on Gen Z, the younger generation, and more difficult in modern, cookie-less times.
Recent surveys show that 62% of Gen Z would consider other options, even if they have a favorite brand. More than half would switch to another brand if it were cheaper or of higher quality. In other words, Gen Z can't be tied down.
Brand loyalty is critical in a booming market, providing the necessary ROI on customer acquisition costs. But in a down market, where consumers are more careful about their purchases, it can make or break a business.
Even if price or value is not the main factor driving Gen Z's purchases, other forces are pulling them away from one brand, such as de-influencing, where influencers and regular shoppers urge others not to buy disappointing products, and "Buy this, not that" videos on social media, sharing alternative versions of similar products.
To build Gen Z's brand loyalty, brands need to offer a strong brand, an ESG proposition, a rewarding loyalty program, and community. Brands must provide something unique that sets them apart from their competitors, such as a customizable order or an exclusive collab. Gamification is also essential, adding game elements such as rewards and points to non-game-related things, but it is not a reliable strategy for building loyalty. Brands need to understand what Gen Z desires and create a product and brand mission that draws them in, beyond Pavlovian conditioning.
To survive, brands need to broaden their focus on brand building, which appeals to every consumer, not just Gen Z. Brand executives must ask themselves, "What do I want Gen Z to do? Do I want them to spend on more profitable products and services?" Understanding customer desire and creating a compelling product and brand mission is a solid start in building brand loyalty.