Is Everything Bankers Think They Know About Millennials & Gen Z Wrong?

The 'rules' for marketing to two generations of younger adults have been baking into financial marketers' strategies for roughly two decades now. But maybe generational thinking doesn't make for such a good recipe, suggests a noted contrarian.

Ever since marketers “discovered” Millennials, the banking industry (along with everyone else) has had a fixation on youth. That focus has continued as Millennials grew older and Gen Z began to be the cohort that everyone was “supposed” to be fixating on. It won’t be long until the next cohort gets a name — some already say “Generation Alpha” — and the cycle will pick up yet again.

But should it?

Generational thinking is everywhere, but especially in the studies and surveys that financial marketers pore over to figure out what they should be doing and who they should be appealing to. Most marketing research breaks out populations by at least Gen Z, Millennials, Baby Boomers and Seniors. The debate over the future of branches, for example, wouldn’t be complete without studies finding that one younger group or the other prefers digital channels … but actually also likes branches.

Generational thinking affects much more than branching strategy, of course. Marketing channels, images, use of video, product names and much more often hinge on what financial marketers believe Millennials and Gen Z want. Some of the hot trends in the field, such as purpose marketing — involvement with social and even political causes — stem from research that indicates that that’s what the younger generation purportedly wants.

That’s what many experts say. But not all of them. Bob Hoffman, a card-carrying curmudgeon with deep advertising roots, says much of the worship of youth among marketers and financial types is based on a load of bull.

Fresh Thinking May Erase Some Assumptions About Millennials and Gen Z

Hoffman, author of multiple books about advertising and an irreverent blog called The Ad Contrarian, has heard all the yak about what marketers “should” be doing over decades in the ad business and spends much of his time skewering it.

Key Insight:

When it comes to generationally oriented marketing, for all the revelations made about new generations, Bob Hoffman sees it as old thinking.

“I’m not a great believer in generational differences. To me, generational differences are like astrology. How can you take hundreds of millions of people and say they’re all alike in some way?” says Hoffman in an interview with The Financial Brand. “To me, there’s just as much variation within generations as there is between generations.”

If you are about to pull out your smart phone to wave it towards Hoffman to refute him with technology, hold off.

“Of course, conditions change and gadgets change, and that changes behavior to some degree,” Hoffman continues. “But what we think of as generational changes, for the most part, are just life-stage changes.” He says 18-year-olds act differently from 38-year-olds who act differently from 58-year-olds.

“And that’s true regardless of generation,” he concludes. “So I don’t put a whole lot of faith in the idea of generational differences.”

Hoffman retired as Chairman and CEO from Hoffman/Lewis, one of the largest independent ad agencies, which he founded, in 2013. Over a long career in advertising’s major leagues, he’s created marketing for some of the nation’s biggest brands, including Bank of America and McDonald’s. He continues to write and speak as head of Type A Group, LLC. His withering, often raw and occasionally ribald commentary leaves no doubt that, to him, marketers get an awful lot wrong.

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Another Generation, Another Label (Again)

Hoffman contends that generational thinking, and myths, aren’t new. They go back at least to his own generation, the Baby Boomers.

“The Boomers were going to be completely different,” he recalls. “We were sensitive to the needs of others. We were going to bring peace and understanding. We were going to change the world, and everyone was going to love each other.”

Actually, as all the Millennial and Gen Z talk has proven, he says, “every generation is going to change the world. We all start out idealistically, and then we learn what the real world is like. And by the time we get old we’re skeptical because we’ve seen this play out three or four times.”

“Research companies and marketing companies have to have something new to sell all the time,” says Hoffman. “So every 15 or 20 years, they invent a new generation that’s going to be completely different from the last one.”

First marketers, and banking companies, were obsessed by Millennials, says Hoffman, and then came Gen Z, the current bullseye.

“The bad news is that Gen Z doesn’t have any money. The financial industry is focusing time, energy and money marketing to people who will not have serious money for at least 20-25 years.”

— Bob Hoffman, Type A Group

Hoffman says this is ridiculous when it shortchanges marketing to people over 50 who hold 70% of the wealth and income in the U.S. “Yet 90% of all marketing is aimed at people under 50,” he sighs.

There is no logic in this, but Hoffman believes he has pinpointed the reason. Many marketing people are young, and they see the world as if everyone was young.

“It’s marketing by selfie-stick,” says Hoffman.

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But Aren’t Millennials and Gen Z Banking’s Future?

A key point behind generational marketing is the belief that the industry must make future customers happy now or lose the future.

“Everyone thinks that if they get someone when they’re 22 and have no money, they’ll still be with them when they are 50 and have money,” says Hoffman. “This is a complete fantasy and a delusion because of life-stage issues.”

When someone is young with little money, they choose their banking institution on the basis of convenience or geography, not economic reasons, he says.

“If you have $300 in checking, what’s the difference?” says Hoffman.

Fast-forward to that person at 52. With assets they think differently. And Hoffman believes they are likely going to be banking with someone else by that point. No return for that long generational investment.

Social Involvement Expectations Are ‘Mostly Nonsense’

Hoffman becomes a bit impatient with the idea that companies have to take stands on social issues, especially viewpoints that Millennials and Gen Z find important.

“It’s mostly nonsense,” says Hoffman. “There are some people who care very deeply about political issues and they do want the brands they use to reflect their ideological positions. But that’s really a small handful of the population. Most people don’t care what their peanut butter maker’s opinion on immigration policy is. They don’t know and they don’t care. They want something that tastes good.”

Uncomfortable Thought:

To the degree that “brand purpose” exists, it is a divisive force in the marketplace that society could do without.

“It’s creating political harm in a country that’s already terribly divided,” he says. “As a consumer I don’t need to worry what the maker of the battery in my car thinks about trade issues. I’ve got enough to worry about.”

In fact, Hoffman believes that taking social positions can backfire. In March 2020 Burger King got burned when it tweeted that women belonged in the kitchen. What was meant as a wry joke, apparently, to announce a program to put women through culinary school, blew up.

Bringing a brand’s social stance to social media poses risks. “People on social media are looking to make trouble,” warns Hoffman. “If you do anything that can be interpreted in any way negatively, someone’s going to jump on it and cause trouble for you.”

Hoffman thinks devotees of the “meaning” of brands are out of touch with consumers. “People are not in love with brands the way marketers like to think they are,” says Hoffman. “It’s a delusion, thinking that they want to have conversations with brands and have relationships with brands. It’s baloney.”

“In my opinion, the most important thing that marketers can do for a brand or a company is to create fame. Fame is an amazingly powerful brand attribute.”

— Bob Hoffman, Type A Group

Hoffman thinks that should be job #1 for any marketer. Creating a famous brand tops most other factors. Take McDonald’s, his old client, he says:

“Say you’re riding down a country road and you’re hungry. On one side of the street is McDonald’s and on the other side is Joe’s Hamburgers. Joe’s burgers will likely be a lot better but the chances are you’re going to go to McDonald’s — and the reason is because McDonald’s is famous and you have some degree of trust and confidence in that.”

( Read More: Top Brand Experts Identify 5 Critical Issues Facing Bank Marketers )

What About ‘Generation COVID’?

Will the coronavirus and its economic impact have its own generation impact? Interestingly, Hoffman doesn’t wholly dismiss that effect.

Much depends on how matters progress in 2021 into 2022, he says.

“If we are done with COVID by midsummer, with everyone vaccinated and people going out and about without masks, and they are not afraid anymore, I think that consumer behavior will snap back to normal more quickly than anyone expects,” says Hoffman.

He says most are ready for real life again and the charm of working from home has worn off for many.

However, if today’s middle ground continues for another year or more, “then all bets are off, and I really don’t know then what to expect.”

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