Gen Z Loyalty Programs: 5 Ways Must-Haves for Engage

The term ‘Gen Z’ is used to describe a person born between the mid-1990s and the early 2010s. Even though people of this generation are new entrants into the consumer landscape, they have significant buying power. An article published by Bloomberg estimated the purchasing power of Gen Z at USD 360 billion in 2022.

That’s why it’s not surprising to know that many businesses are trying to crack the code of the new generation of customers with unique preferences and expectations regarding brand loyalty. Gen Z customers don’t value traditional rewards. Instead, they look for authenticity, experiences, and ease of use.

This blog post lists five strategies that can help you build a loyalty program that resonates with Gen Z. So let’s dive right in and learn more about the right tactics that can help you attract and engage with Gen Z customers.

1. Provide Flexible Payment Options

Would you be surprised to know that Gen Z customers would prefer flexible payment options? They are the most tech-savvy customers when compared to customers of all other generations. Why would they buy just by using cash or credit?

An eMarketer and Insider Intelligence study reveals that more than half (55%) of Gen Z customers above 14 years of age will make at least one digital purchase using buy now, pay later (BPNL) in 2024. Another study by Ascent and Modern Retail found that six out of ten customers aged 18 to 24 made a BPNL purchase. That’s why it’s imperative to offer flexible payment options such as BNPL plans and instalment payments.

2. Tailor, Customize, Personalize

Gen Z customers value personalized rewards and experiences. A study conducted by Oracle found that two-thirds of Gen Z customers wanted personalized recommendations via an app while browsing in-store. But less than 40% said they bought something based on brands’ recommendations in the last six months. The study also found that more than half of the respondents are willing to share their data to receive personalized rewards.

Customize your loyalty programs to offer choices and rewards based on individual preferences and behaviors’. Allow members to choose how they earn and redeem rewards. Effective personalization doesn’t just retain Gen Z customers, it makes them feel valued. Providing value to customers will encourage them to share relevant data with your brand, which in turn will help you to personalize your loyalty programs.

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3. Values and Social Responsibility

A study conducted by First Insight Inc. revealed that almost three-quarters of Gen Z customers are ready to spend more on sustainable products. That’s not all; a majority of them are ready to pay a premium of 10% for the products! Another survey found that nearly a third of Gen Z respondents said that supporting the causes they believe in is a part of their legacy.

That’s why it isn’t surprising to find Gen Z customers buying from companies like TOMS Shoes, which donates one shoe to underprivileged children in underdeveloped countries for every pair sold. Also, BLQK Coffee, which donates a significant portion of its profits to charity, enjoys a large customer base of Gen Zs. So, there is no doubt that Gen Z customers are passionate about their values and social responsibility. Brands must align their loyalty programs with the values and passion of Gen Z customers.

4. Experiential Rewards

A majority of Gen Z customers value experiences more than material goods. As per one latest research seven out of ten Gen Z customers are ready to pay more for experiential rewards such as passes to exclusive events, VIP access, and limited edition products. Another study by Gartner found that the percentage of loyalty programs offering experiential rewards increased 17% in just one year!

Brands that don’t use experiential rewards will be behind the curve. They will fail to attract Gen Z customers and will forgo capturing the booming opportunities the new generation customers have to offer. That’s why all brands that are looking to be successful must focus on experiential rewards such as early access to new products, exclusive events, or behind-the-scenes content to reward and engage Gen Z members.

5. Gamification and Challenges

Several studies have found that more than 60% of Gen Zs play mobile games and video games at least once a week. Another research found that eight out of ten Gen Z customers want a gamified experience when interacting with a brand. These two stats prove that brands that gamify their loyalty programs will have a massive competitive advantage over those that don’t.

Gamification loyalty programs can increase engagement and foster a sense of community among customers. Popular gamification elements among Gen-Z include leaderboards, challenges, award points, badges, or rewards for completing tasks or achieving certain milestones. 

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All Said and Done,

Gen Z customers look beyond discounts. They crave authenticity, social responsibility, and unique experiences. By being flexible, offering personalization, aligning with their values, and incorporating gamification, you can create loyalty programs that capture Gen Z customers’ attention and transform them into brand evangelists.

At LoyaltyXpert, our sophisticated loyalty solutions have helped many businesses create targeted loyalty programs for Gen Z customers. If you want to know how our loyalty platform can help your business attract and retain Gen Z customers, contact us today for a free demo.