Many bankers have grown weary of marketing to Millennials. Who can blame them? The huge generation has been in the marketing spotlight for at least ten years. By now, many banks and credit unions figure that as long as they offer online tools and a mobile app — and launch some hip digital ads — they’ll attract hordes of Millennial consumers. Sorry, but it’s more complicated than that, and it will take some hard work.
Furthermore, now is definitely not the time to let up on your Millennial marketing focus. While people born between 1980 and 1996 don’t yet possess the majority of the country’s wealth, they soon could be.
Forbes predicts that Millennials will become the richest generation in history and by 2030 will hold more than five times the wealth they have today.
As older generations pass their assets to Millennials, financial institutions will need to adapt and change their offerings and attitudes to serve this group of people who live and think differently.
The effort will have a huge payoff, but it will take sustained effort. Your institution must evolve — and invest — to meet Millennial consumers’ needs both now and in the future.
Millennial Lifestyles Run the Gamut
The youngest of this generational segment — about 25 years old — are only starting to initiate careers and adult responsibilities, while the oldest — about 40 — may be established professionals with homes and families of their own. Clearly they will have different financial needs.
Qualitative data collected from the approximately 270 members of the a national Millennial Advisory Board that we run reveals some surprising insights about what Millennials really need financially.
These needs suggest several areas where banks and credit unions must devote resources, training and time now if they want to be Millennials’ go-to institution for the next decade and beyond.
1. They Don’t Have Relationships with Advisors or Wealth Managers
If you have trust and investment departments, it’s likely that your officers have been very successful building relationships with parents and grandparents of Millennials. But based on our advisory board’s input, these officers too often are not cultivating connections with this younger audience.
Many Millennials are working their way out of college debt. Others — especially the younger segment — say they think they don’t have enough extra money left over at the end of the month to invest. And they believe they can’t afford, or are not ready for, an advisor.
They also think their employer-sponsored 401k is enough. And many describe professional advisors or wealth planning services as “too expensive for me,” or “I should do this some day, but not now.”
As a result, many financial institutions are overlooking Millennials because they haven’t come to them for information. In fact, Millennials probably haven’t thought about you at all because you’re not marketing to them and they have other things on their minds.
Your competition isn’t another institution, your competition is lack of awareness.
Action steps. To correct this situation financial marketers must re-tool and customize their efforts to address the specific needs and concerns of this audience. Don’t make the mistake of using existing materials with photos of younger people substituted.
Your language, your offers and your products will need to change. The way you guide these customers and deliver reporting may be different, too. Throw out your old ways of doing things. Start fresh.
The time is now to be planning, developing and training your team. By including Millennial-relevant business development and marketing efforts in your strategic plan, you can direct their attention toward investing and longer term planning.
Create offerings or pricing that fit where this group is in their lives, and recognize that as they grow in their careers or inherit money, you must tailor conversations and products accordingly.
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2. They Want Your Advice About Financial Matters
Nearly three fourths of our Millennial Advisory Board Members say they’re concerned about their financial futures and would welcome advice from their bank or credit union. And yet a large majority say they’re not getting it.
Topics Millennials want to learn about are:
- Finding the best credit card
- Buying a home
- Buying or leasing a vehicle
- How health savings accounts work
- Protecting against identity theft
- Saving for children’s education
- How to improve their credit rating
Millennials are hungry for — and ready to attend — webinars, seminars and lunch-and-learns. They also say emailed information would be welcome.
Bank and credit union marketers have the opportunity to position their institution as a trusted source of advice. But answering this call will require resources and employee training. Here are some questions to consider:
- Do you have experts readily available in the institution who can help customers by listening, comparing products and recommending?
- Are these experts well versed in financial concerns of different generations? (Unlike most trust officers and investment advisors, these experts should be trained to deal with younger, less-well-off customers.)
- Are you creating or purchasing the educational components needed for both employees and customers?
- Is every customer-facing banker capable of offering counsel or at least making an internal referral?
- Are you sharing valuable information on your website and social media?
- Are you telling anyone about this, or are you assuming everyone knows?
Think about this: investing in education for both employees and your customers makes your institution super sticky. If you become the “go-to” for all things financial, there’s no reason to use other institutions.
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3. Parents, Friends and Even Strangers Are Influencers
Millennials want to manage their finances wisely. They listen to others about where to open accounts and what kinds of decisions to make. Top sources for guidance are family and friends — and strangers, often on social media. That means your marketing efforts need to build on these influencer relationships.
Let’s look at each set of influencers.
Parents and friends
For many Millennials their parents are the people who have helped them with all money matters since childhood. When they opened their first account, they likely defaulted to the institution where their parents bank.
If you have good relationships with their parents, you have a built-in trusted referral source. Consider how you can leverage those relationships into additional, deeper banking relationships with their Millennial children.
Consider one of more of these ideas:
- Mobile companies offer family plans. Could you?
- How about offering workshops about retirement planning for multiple generations to attend together?
- What about a family-and-friends marketing promotion: Refer a friend or family member and you both get $50 in your account when the new account is opened.
I recently read a post on a “private” Facebook group where someone asked important financial advice from the other 13,000+ members (meaning, most are “strangers”). Here’s what it said:
“I have some credit card debt I could almost pay off or get it down to super manageable levels if I use my savings to make a large payment. Question: should I keep putting money into my savings while making small payments on my credit card OR make a large payment on my credit card wiping out my savings and starting from scratch with very little debt? I want actual person advice not articles hahaha HELP”
Questions like this about insurance coverage, rent vs. buy and other financial issues are asked every day with strangers offering advice and the person posting the original question listening.
Of course, Millennials also research articles online and subscribe to podcasts from experts like Dave Ramsey or Suze Ormon. (Also strangers, albeit experts.)
The challenge for financial marketers is to be where the Millennial audience is searching for advice. This must be a sustained effort to find the places to be, build credibility and establish relationships.
Here are some specific suggestions:
- Spend time finding online social media forums where people are asking these questions. Engage with the community and offer real value.
- Develop your own Millennial financial online community.
- Consider partnering with or sponsoring financial expert programming that Millennials seek out.
- Look for community partners who can help add a local feel to your advice.
- Many colleges teach Adulting 101 — much of which covers finance. Sponsoring or presenting at these programs gets your bankers in front of your audience.
Remember, you’re investing in your future as well as theirs, and your efforts today may not deliver immediate results. But the finish line is not quite as far off as you might think.