When I saw last week’s CUES webinar, “Understanding Gen Y and Boomers,” I had to ask, “What about Gen X?” It doesn’t seem like financial institutions care all that much about Gen X? Why is that?

Here’s my theory.

Gen Y represents the future — the highly-coveted credit-driven market. They are the ones going to college, getting their first credit cards, opening new bank accounts, getting their first real job, buying new cars, getting married, buying houses and having kids. All that stuff takes cash — cash they don’t have.

Boomers have money. They’re bringing in much-needed deposits that fuel loans (to Gen Y).

But what about Gen X? What do they need? Not as much as Gen Y. What does Gen X have? Not as much as Boomers. Gen X has already graduated college, got their bank accounts (read: “inertia”), got their home loans, their home equity loans, etc. They have decent jobs and equity in their homes (that they’ve probably already tapped), but other than that, they don’t have much in the way of real significant investable assets. Maybe $100,000? That’s probably generous for most Gen X-ers. Whatever amount it is, it surely isn’t as much as Boomers.

Here is an ultra-crude graph depicting the typical financial journey the average person makes. It shows how Gen X is in “no man’s land” when it comes to financial services.

When we’re very young, we don’t have any money nor any need to borrow much. There may be an allowance and the occasional plea: “Mom can I borrow $10?” By our 20s and early 30s, we’re at the height of our borrowing stage. As time goes by and our net worth grows, our need to borrow decreases.

Marketing to Gen Y, with dreams and the future ahead of them, is relatively sexier than the straightforward nature of marketing deposits to Boomers. Marketing to Gen X today means things like loan refis and trying to get them to switch core deposits — decidedly not sexy nor straightforward.

Key Takeaway: This is nothing new. This same thing has been happening for generations. We just have different names for those generations.

For Discussion:

• Which financial institutions are successfully marketing to Gen X?
• What does the future of Gen X financial marketing look like?
• Will Gen X get lost or forgotten in an online, Gen Y, social media marketplace?

60 Seconds on Gen X:

• There are about 50 million members of Gen X in the U.S. (depending on which years are used to define the group).
• Gen X is considered the 13th generation born in the U.S.
• Gen X is generally savvy with technology, as they saw the introduction of computers, VCRs, DVDs, pagers, cell phones and fax machines.
• Gen X came of age with Nike, MTV and video games.
• Gen X saw the fall of the Berlin Wall, the birth of the Internet and the explosion of HIV/AIDS.
• Gen X was the first generation to grow up in a racially-integrated U.S. They are 70% white, 13% black, 12% Hispanic, 4% Asian, and 1% Native American. By contrast, 77% of Baby Boomers are white.*
• Gen X is generally thought to be highly individualistic and diverse — ethnically, culturally, and attitudinally.
• Gen X is the best-educated generation in United States history as evidenced by college and university enrollment.*
• Credit card debt for the average Gen X-er is around $5,000.*
• Nearly a quarter of all bankruptcies in 2006 were filed by Gen X.*
• GenXers have little confidence that Social Security will be available to them when it comes time for retirement.*
• As a saving group, Generation X skews higher than the national percentage, stashing 16.2 percent of their income, with a high percentage invested in mutual funds.*

Further Reading: “Understanding Generation X - Boom or Bust Introduction”

[Note: The author, Jeffry Pilcher, is squarely in the middle of Gen X and couldn't care less if banks aren't sending him junk mail.]

Previous related stories from The Financial Brand:

• 2008 credit union marketing budgets — too much, too little
• Economy driving credit union promo
• Credit union introduces three new branded savings products

Tags: Boomers, Gen X, Gen-Y

Posted on Tuesday, May 27th, 2008. Filed under Marketing. Follow responses through the RSS 2.0 feed. You can leave a response, or trackback from your own site.