The Generational Effect: Customer Loyalty Across The Generations

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Marketers have long recognized the significance of generational differences in branding and the use of media and advertising. Everything from concept and message to color and design, from music and jingles to spokespeople and endorsements, from venue and placement to technology and channel is carefully selected to maximize appeal and impact on a target audience that often is defined, at least in part, by generation.

Branding and advertising aside, is there a generational effect when it comes to customer loyalty and satisfaction? How do Baby Boomers compare with Gen Y in terms of their level of loyalty to a brand? Do Traditionals and Gen Xers have the same drivers of delight and dissatisfaction? The same expectations? And what about Generation Z, the first generational cohort baptized in an e-world?

Drawing upon GfK benchmark surveys in the banking, automotive, credit card and cell phone sectors, we explored the concept of generation and the extent to which various generations are both similar and different in their degree of loyalty and the drivers of loyalty to companies in the various sectors.

Does loyalty differ across generations?

The benchmark surveys confirm that the various generations do exhibit different degrees of loyalty across the industries measured, although the differences are not as dramatic as some marketing pundits imply. While the patterns of loyalty between the generations are relatively consistent spanning the sectors we explored – Traditionals displaying the highest degree of loyalty, Gen Y the least – there also are some distinct variances between the industries.

While the level of loyalty exhibits a clear pattern across the generations, the configuration of key drivers is far more complex. The blend of performance criteria that emerge as key drivers for the various generations is mixed, with the picture further complicated by whether for any given generational group a specific dimension is a positive driver of loyalty (an enhancer), a negative driver of dissatisfaction (a dissatisfier) or a dual driver of both.

The extent to which the bank is seen as looking out for the customer’s best interests, for example, is a common theme that cuts across the generations. For telecom providers, (un)reliability of coverage jumps first for Traditionals, Boomers and Xers, but this doesn’t raise a ripple for Gen Y, who are the only group to attach significance to having access to phone apps. Taking the time and effort to help cardholders (or failing to do so) registers as highly important for Traditionals, Boomers and Xers in their credit card relationships. When it comes to cars, the key drivers are somewhat more consistent across the generations than what we see in the other sectors.

Generational differences and similarities

The perceptions of consumers, their likes and dislikes, the issues that motivate them to be loyal customers or to defect show both areas of similarities and differences between the generations. While generational differences are real, the generations themselves are porous. Given the patch quilt of drivers and the nature of the generational personas, it is clear that the positioning of products, services and brands and the associated messaging to build loyalty with the different generations needs to be customized.

For the complete findings, including details on the level and drivers of loyalty across the generations, as well as profiles of the generational personas, read on…login in to get my white paper via the ‘Downloads’ link above.