At over 80 million strong, the highly coveted Millennial demographic is critical to the growth and strategic direction of every bank and credit union worldwide. Representing more than one quarter of the U.S. population, Millennials are even larger than the Baby Boom generation, changing the way financial marketers must think, budget and plan.
What does it take to appeal to this critical market segment? How do you build relationships with Millennials using communications tools such as your institution’s website and apps? (Hint: it’s not just about a pretty design with a photo of smiley youths.)
- Born between 1982 and 2000, Millennials will spend $2.5 trillion this year, nearly a quarter of projected total U.S. consumer spending.
- Smartphones play a huge role in their lives, with 87% confessing that their smartphone never leaves their side, night or day.
- Millennials’ number one platform for marketing communications is email, followed by text messages.
- Simplicity of the user experience simplicity rules with this generation. 70% are more likely to recommend a brand because it provides simpler experiences and communications.
How Millennials Bank:
- Most Millennials will begin their research for new banking products online.
- Convenience is key for this generation, and when asked in a recent report what is very important in choosing a financial institution, this was a top-ranking item.
- 54% of Millennial accountholders say they would be willing to switch financial institutions to get a better digital experience.
- 94% of Millennials say they are active users of online banking.
- Millennials are more interested in mobile banking tools and solutions than any other generation.
- Low institution fees and rebates (cash back) have more appeal to this generation than others.
- 70% of Millennials prefer to check their bank account balance on their institution’s website (compare to about 40% who prefer via mobile apps).
- The favored method of communication for bill pay reminders is email.
- Most Millennials use their banking app a few times each week. Younger Millennials (ages 18-24) are nearly 2 times more likely to use the app once a day or more, compared to older Millennials (ages 25-34).
- Millennials are the generation most straddled with debt, namely student loans, credit cards and auto loans.
- The average debt for Millennials is $47,689 – primarily comprised of student loans, auto loans and credit card debt.
Sources: Novantas, 2014 Simplicity Index Report, Zogby Analytics, Moodys, FICO, Innotribe, SNL Financial
Are Your Products Millennial-Friendly?
Appealing to Millennials begins by looking at your institution’s core products and determining whether they are “Millennial-friendly.” Do you offer a checking product that has rewards or offers cash back? Are there no-fee or low-fee account offerings that would appeal to Gen Y? Do you offer savings products that have realistic balance minimums for this generation? Are you offering payments options that Millennials will love (pssst – Millennials don’t use checks)? When looking at your mobile and online banking investment, do you have competitive product offerings that provide the convenience this generation expects? What about your ATM network – are you connected to a large surcharge-free ATM network that allows Gen Y to access their money wherever they are? All of these considerations and more are critical to looking at your bank or credit union the way Millennials do.
Look Closely At Your Website and Apps
For starters, Gen Y expects an institution’s website to be equally accessible to them whether they are on their laptop, tablet or phone. This means the responsive website refresh that you’ve been putting off is a critical first step in making your site appealing to this crowd. Additionally, because Millennials are constantly online, they will judge your digital presence by others they often interact with. Look at sites and apps, such as Uber, Spotify, Twitter, Instagram and Netflix. Their common denominator is the simplicity of the user experience. This means that while Millennials are coming to your site and apps to log into online banking or check their account balance, they want the experience to be straightforward, modern, and convenient. Additionally, because this generation is accustomed to seeing news constantly (think – newsfeeds), they appreciate and expect their institution to keep up with the times and trends. Remember that Gen Y also likes personal financial guidance, so be sure to offer content that is relevant to their wants, needs and stage of life.
High Tech, Plus High Touch
While Gen Y wants all of the conveniences that digital offers, they also want the comfort in knowing that if they have a question, there will be a real human available to help. Whether in the form of online chat, quick email responses, or timely in-branch interactions, this generation wants to know they can get relatively instant gratification. Phone numbers with annoying tree prompts represents yesterday’s technology to this generation. Ideally, mixing the right dose of human correspondence and digital technology keeps the Millennial feeling that your brand is real, while still in synch with the technology that parallels their life.
One Size Does Not Fit All Millennials
Like every other generation, one size does not fit all for this crowd. While these tips outline some tried and true tactics, the diversity of this very large population segment requires more personalized and customized communication than ever before. So craft your Millennial marketing plan with care, because this segment represents the most growth for your institution. The banks and credit unions that are doing it right now will earn Millennial loyalty for the long-haul.