Crack the Code on Lasting Loyalty with Gen Z

In an era of rapidly advancing technology and shifting customer expectations, brands are grappling with the challenge of how to attract and retain the next generation of consumers. Programs, rewards, and experiences that appealed to the masses years ago don’t hold the same value for Gen Z.

Today’s consumers––especially Gen Zers––have a holistic view of brand value, and they seek a more personal and flexible loyalty experience. Brands that want to drive engagement right now and inspire brand devotion over the long term need to find ways to place customers’ needs and values firmly at the center of loyalty strategies.

Gen Z isn’t interested in traditional loyalty offerings. But why? 

At its foundation, brand loyalty is about making and sustaining a human connection with customers. In a recent series of interviews, The Lacek Group explored the unique experiences, needs, expectations, and values of individual Gen Z consumers. Examining what they demand from brand relationships reveals some common themes and essential insights into how Gen Z customers view brand loyalty. 

Connect with me. Or I delete it. 

Customers no longer view loyalty programs as primarily points-accruing and rewards-redeeming systems. Instead, they seek a holistic value proposition from brand relationships and expect a comprehensive experience that resonates with their lifestyle and values.

Loyalty program value is in the eye of the beholder. What one member considers valuable may hold little or no appeal to another. Brands need to extend beyond traditional rewards to encompass broader benefits—like exclusive access to events, personalized content, wellness offerings, and opportunities for community engagement.

For instance, a fitness brand might offer access to virtual fitness classes, nutrition advice, and community support groups.

Building a community around your brand through social media engagement, brand events, and collaborative platforms where customers can share their experiences and feedback can significantly enhance customer value. Fostering a sense of belonging helps brands create more meaningful and lasting connections with customers.

Give me more than discount codes. 

The modern consumer’s perception of value is complex and multifaceted. According to one interviewee, “Value isn’t just about snagging a discount code.”

Today’s value propositions need to be layered. Sure, saving money is appealing. But value that builds loyalty for today’s customers demands a balance among cost, quality, convenience, purpose, and values.

Straightforward communication––including transparency in sourcing, production processes, and corporate social responsibility initiatives—is necessary for building trust and loyalty.

To capture the loyalty of discerning consumers, brands must highlight with equal vigor the quality of their products, their brand values, and their purpose.

• For instance, beauty brand Drunk Elephant emphasizes high-quality ingredients and sustainable practices to attract consumers who prioritize both efficacy and environmental responsibility.
• REI—which specializes in outdoor gear from base layers to bear spray—promotes outdoors access for historically excluded communities and well-being through time spent in nature.

Make me a part of things. I want to be heard.

Personalization––once a differentiator––is now an expectation. And it must be dynamic and responsive to customers’ lifestyles and purchase habits. Rather than one-sided brand communication, Gen Z craves a reciprocal relationship with the brands they favor—echoing TikTok’s popular For You page with its individualized content recommendations.

Leveraging advanced data analytics and technology is crucial for understanding the individual customer journey. By analyzing purchase history, browsing behavior, and engagement patterns, brands can tailor their experiences and offers to ensure relevance at every customer touch point.

Systems that allow for real-time engagement and personalization are essential. This can include AI-driven recommendations and offers, personalized communication, and adaptive content.

• Calm, an app that helps users manage stress and anxiety, tailors the experience by asking new users questions about their habits and preferences during the setup process. By asking directly, Calm delivers the right experience to every user from day one.
• Whole Foods uses predictive AI to craft personalized messages and offers in its app. These intuitive promotions nurture action recommendations for upcoming shopping trips. 

Let me create my own experience. 

Consumers desire more control and flexibility in how they engage with brands. They seek entertainment, participation, and connection. Rather than serving up a rules-based system with rigid requirements, design a program that gives customers the power to create their own path toward loyalty with your brand. Customizable and flexible engagement options are more appealing than traditional one-size-fits-all rewards.

Offer a variety of reward options, including traditional discounts and freebies, exclusive experiences and perks, and values-driven options (like charitable donations). Then let customers select what resonates most with them. Provide a range of opportunities for customers to interact with your brand. Online and offline activities, social media interactions, and personalized communication and offers allow customers to decide when and how they want to engage with your brand and create their own loyalty experience.

• Marriott Bonvoy offers a variety of experiential rewards tailored to members’ interests and preferences. The Marriott Bonvoy Moments program allows members to redeem Marriott Bonvoy points for once-in-a-lifetime culinary, arts, sports, and lifestyle experiences.
• Nordstrom’s Personal Double Points Days let The Nordy Club members choose a day to earn double points on all their purchases. 

Design dynamic customer journeys and allow them to evolve. 

Successful loyalty programs appeal to what consumers want today while maintaining agility for future refinement and enhancements. Here are four key principles to keep in mind:

1. Support continuous innovation. Stay ahead of the curve by continuously innovating and adapting to meet changing consumer expectations. Experiment with new technology, explore emerging trends, and remain open to feedback and improvements.
2. Make data-driven decisions. Leverage data to develop a better understanding of your customers and how they engage with your brand. Insights into preferences, behaviors, and trends allow you to design more effective loyalty programs and make changes more rapidly.
3. Strive for hyper-custom experiences. Look for ways to curate and customize content and experiences to meet individual customers’ preferences, expectations, and needs.
4. Remain agile. Programs must be flexible and accomodate customers’ desire for a more fluid brand devotion journey.

The future of brand loyalty programs lies in the ability to deliver a personalized, relevant, and flexible experience with the consumer’s needs and expectations at the center. Brands that embrace innovation and data—and root their program design in customer understanding and empathy—will be well on their way to earning lasting devotion and ongoing returns on their loyalty investment.

Leanne Cordes is senior vice president, Strategic Services for The Lacek Group. For more than 30 years, The Lacek Group has been perfecting the art and algorithms of brand devotion. We help world-class brands identify their highest-potential customers, engage them across channels throughout their lifecycles, personalize each relationship for optimal long-term results, and measure the true effectiveness of those efforts. The Lacek Group is an Ogilvy One company.