Gen Z: Turning Connections into a Lifetime of Brand Loyalty

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Cover image for  article: Gen Z: Turning Connections into a Lifetime of Brand Loyalty

Gen Z is crucially important to the future of every brand. In this post we’ll be looking at Gen Z through the lens of two NCSolutions studies presented at Advertising Week, one for 7-Eleven, and the other for Snapchat.

Double-Ended Causality Between Advertising and Brand Loyalty

We generally think of advertising as the cause, and brand trial/brand loyalty as the effect. However, it also works the other way around: ads tend to be even more effective on your brand loyals. It’s been proven time and again that right after buying a new car, for example, the buyer pays a lot of attention to the ads for the car he or she has just purchased as if to reassure oneself that it was the right move to make. Beyond the car category, fans of a brand tend to enjoy seeing that brand’s ads in any category.

Some marketing deep thinkers have dissected brand loyalty into the actual behavior of repeat buying, satisfaction with use of a brand, emotional involvement with the brand, promoting the brand to others, resistance to competitive brands, consumer lifetime value, brand equity, and brand love. Brand loyalty is all of these things.

Once you have gotten a person to try your brand, you have established a toehold of a connection on which you must build if it is to become true loyalty.

Brand loyalty continues to be a significant factor in making advertising more effective - and its importance is growing.

In a recent update to its ground-breaking study, The Five Keys to Advertising Effectiveness, NCSolutions found brand loyalty now contributes 21% to incremental sales, up 6% from 2017. The analysis also showed a direct correlation between brand loyalty and future sales growth for brands. We believe that the strength of digital advertising in converting connections into brand loyalty is one of the reasons why, in this new digital-dominant advertising age, brand loyalty is becoming a stronger driver of the sales lift effects of ads. We expand upon this notion in my earlier post here.

These insights offer valuable lessons for retailers, publishers, and CPG brands. To increase incremental sales and share of requirements, they’ll need to prioritize strategies that cultivate lasting connections with consumers. Maintaining an authentic emotional resonance is essential, and loyalty programs (discounts for loyalty) are also effective, as we shall see.

And when it comes to future sales, younger shoppers present a particularly attractive audience. Gen Z, for instance, is a brand-loyal, socially engaged, on-the-go generation with $360 billion in spending power. Retailers, publishers and CPG brands that consistently engage, resonate, and connect with them will build loyalty - and consistently drive sales.

7-Eleven: Convenience Meets Connectivity

The potential for Gen Z to drive incremental sales across the retail ecosystem is a key reason they’ve emerged as a pivotal audience for 7-Eleven. Another key reason is that Gen Z gravitates strongly to convenience stores.

A recent study, "Tap into the C-Store Consumer," shows that 84% of Americans will shop at stores with robust loyalty offerings. And 37% of Gen Zers, who frequent convenience stores (c-stores) three times more than baby boomers, belong to a c-store loyalty program. This new type of c-store shopper offers opportunities for retailers and CPG brands to test innovative ideas and strategies. Loyalty cards also provide insight into the individual shopper which enable personalization of messaging in retail media networks.

Loyalty programs have evolved into powerful platforms for retailers and CPG brands. 7-Eleven, which launched the Gulp Media Network last year, is leveraging its Immediate Consumption Ecosystem (ICE) to engage consumers and provide CPG brands with comprehensive marketing tools. For example, C4 Smart Energy leveraged the retailer’s highly engaged and loyal customer base for a top-of-the-funnel marketing campaign. The campaign resulted in a 6.6% sales lift and introduced new buyers to 7-Eleven.

To gain an accurate campaign performance assessment, advertisers must close the loop for any type of campaign. Rest-of-market measurement provides a complete picture of how advertising impacts incremental sales across all retailers. With it, advertisers get a true sense of the effectiveness of the ad in generating additional sales. In other words, NCS urges a holistic approach to understanding the contribution of a complex of stimuli. Measuring just one platform is a common practice but not a best practice, because it tends to credit all positive results to the one platform being measured.

Snapchat: Real Relationships to Results

For Snapchat, helping advertisers understand the long-term value of advertising on the platform is a priority. After noticing that many new buyers were contributing to sales, it asked NCSolutions to conduct a meta-analysis to get a better understanding of the trend. The results proved the significant long-term impact of the Snapchat platform. The multiplier effect of 2.1 on sales, an impact seen as much as seven months after a campaign ends, emphasizes the enduring value of strategic advertising efforts.

In addition, the study found exposure to Snapchat ads led to a 20% higher likelihood of non-brand buyers making a trial purchase, demonstrating the platform's effectiveness in driving trial buying. Triers exposed to Snapchat ads were more likely to become repeat buyers. Since Snapchat reaches 75% of the 13- to 34-year-old population in 25 countries, this finding emphasizes the potential for converting younger trial buyers into loyal customers.

Look to find the platforms (that includes programs, print vehicles, experiential vehicles, all media contexts) that your target trusts and loves, because by association with those platforms, some of that trust and love will rub off on your brand.

Lasting Connections

These data revelations from NCS and other rigorous single-source practitioners offer advertisers a comprehensive guide through the intricate tapestry of evolving consumer behaviors, emphasizing the need for holistic approaches that consider both immediate and enduring impacts on consumer behavior. Single source and in-market experiments are vital in addition to marketing mix modeling to fully understand the complex inter-relationships and synergies which produce the best long-term results.

Convenience stores – and the rest of us – can invest in strategies to reach Gen Z and building a lifetime of brand connections can have a significant impact on advertising effectiveness.

Whether navigating the intricacies of retail media networks or delving into the dynamic realm of Snapchat, the significance of brand loyalty, precision in measurement metrics, and the lasting impact of strategic advertising remain a common thread.

Brand loyalty is a crucial factor, contributing to higher incremental sales returns on ad spend. These insights offered valuable lessons for the broader advertising landscape and underscored the need for advertisers to prioritize strategies that cultivate lasting connections with their audience.

All too often in recent years, we have seen a shift away from long-term thinking to the false palliative of making the quarterly top line look good. Several speakers at the recent Attribution Accelerator showed hard data proving that excessive focus on short-term performance drives down long-term sales, and that long-term sales is 80% caused by upper and mid-funnel branding effects.

Posted at MediaVillage through the Thought Leadership self-publishing platform.

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