They Tweet. They text to distraction. They love technology. And they expect your bank or credit union to feel the same.
They are the Millennial generation, or that age group generally considered to be born between 1985 to 2004. And this highly demanding group of consumers is both a boon and a challenge for financial institutions eager to capture their investment dollars.
That is because there are so many Gen Y or Millennials out there. Some compare their numbers to that of the Baby Boom generation. Yet they are an elusive bunch because they do not respond to traditional forms of marketing. So how do you capture their attention and their loyalty?
Financial and generational experts say banks, credit unions and other financial-service companies need to move into blogging, social networking, YouTube-like video capabilities, mobile phone technology and other key areas if they want to catch this group’s attention. Grab their eye and the wallet will follow.
Still, no one says it will be easy.
“They are capable of consuming at a level we don’t understand yet,” said Kenneth W. Gronbach, a consultant, researcher and author of The Age Curve: How to Profit from the Coming Demographic Storm.
“Banks and credit unions need to realize this is a new ballgame. Even large consumer product companies don’t yet know what these kids want,” Gronbach said. “You need to sit down with them and find out what they’re thinking.”
Gronbach knows of which he speaks – not only is he the father to Gen Y children, he is an expert demographer, futurist and generational marketer. He also is a regular keynote speaker, meeting with financial professionals including banks and credit unions struggling to address this growing audience.
Boomers are easy to target – they want products that talk about retirement, how to help those who are caregivers and ways to help their grown children thrive. Gen X, that group born between 1965 and 1984, are now buying homes and having their own babies. So they want information on loans, opening college-savings plans and more.
Gen Y are the so-called new kids on the financial block. They love their mobile phones, so they want killer apps to transfer funds or even buy a soda virtually from the machine.
While they are virtually unreachable by television, radio or the like, Gronbach said Gen Y speak cyber like no other generation ever has before. Yet, ironically, they love to receive offers via “snail mail,” or the good old mailbox. They love to hunt for a good deal online, so mail offers are welcome.
Gronbach said Millennials also like products to be green or environmentally friendly. So if your bank promotes paperless statements, Millennials will appreciate that. They also like products to have some humanitarian good to them, Gronbach said.
But businesses beware – if you make a claim that your business is eco-conscious, it better meet that standard. If not, word of your transgression will fly over the World Wide Web within seconds.
As far as their financial needs, they may be more sophisticated than one might think, Gronbach said. Because there are more Gen Ys looking for jobs, competition for positions is fierce. As a result, more Millennials will become entrepreneurs and may look for small business loans to get them started.
According to research firm Javelin Strategy, members of the Millennial generation prefer to do their banking online rather than in a bank branch. Most of them use it to check account balances and pay bills, the survey conducted for Microsoft found.
There are many examples of financial institutions using their online product to attract Millennials. Oklahoma-based Tinker Federal Credit Union recently launched its first web site targeted toward Gen Y called “Buck the Norm.” The site aims to educate young adults about money matters in a more light-hearted way, credit union official said.
“The purpose of ‘Buck the Norm’ is to encourage young adults not to follow the typical model of mounting debt and overspending,” said Matt Stratton, TFCU Senior Vice President of Marketing. “Personal financial management doesn’t have to be all doom and gloom.”
For example, the site has three weekly correspondents who blog about their money challenges. There are contests, like the one asking readers to take pictures of their thumbs (aka Bucky, the site’s mascot) to post on the credit union’s Facebook page.
The site also has free ringtones, witty desktop wallpapers – oh, and some financial advice like how to open a 401(k). Everything is done with as little reverence as possible, something that definitely appeals to the Millennial user.
Resource One Credit Union took its Gen Y site one step further. The Dallas-based credit union held an online contest to hire one of its members as spokesperson on its youth-orientated Web site MyLifeMyMoney.
The search, which targeted members between 18 and 30, gave one lucky winner access to a Scion, iPhone and service for a year, a video camera, Apple laptop computer and $20,000 in salary. The winner, Jared Guynes, is responsible for updating the site’s blog, posting video entries and otherwise making banking seem cool. It is a job he is more than willing to complete, Guynes said.
