Financial marketers have a hard time wrapping their heads around Generation Z. Why is that? Well for starters, there’s no hard-and-fast definition of where the Millennial generation ends and Gen Z begins. Do you use 1994 as the cut off? Or 1997? Maybe 2000?
According to Nielsen, Gen Z represents those born between 1997 and 2015 — and they’re a whopping 26% of the U.S. population. But fretting over these subtle demographic distinctions misses the larger point.
Here are the relevant characteristics that define Gen Z — what financial marketers need to know so they can get ahead of this massive demographic trend.
1. They live on their phones
The members of Gen Z are the most technically savvy people who have ever lived. They didn’t have to adapt to social media; it’s as familiar to them as TV was to earlier generations. They’re used to spending 10 hours a day on their phones, consuming content.
“Media consumption for Gen Z’s is embedded in their daily lives,” wrote Nelson Granados wrote in Forbes. “They are not even consciously making a decision to consume content.”
You’d think the best medium for marketing to Gen Z is obvious: digital. It’s also completely ineffective. If members of Gen Z notice display advertising at all, it’s only because they’re annoyed by it. Having grown up with ad blockers and DVR, they have zero patience for messages that disrupt their experience as content consumers.
Also, email is about as relevant to Gen Z as the telegraph was in the 20th century. It means nothing to them. Do you want to know what they use their email accounts for? To set up their tablets… that’s about it.
2. They’re comfortable in a cashless society
Have you seen that iPhone X commercial that boasts about how you can now “pay with your face”? The implications for the financial vertical are massive, and right on target. You want it to be your financial services company all those iPhone faces are routing their payments through. Because remember, they have decades of spending ahead of them.
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3. They have different priorities
I’m a Millennial. Those 0% APR credit card offers that might have worked for Baby Boomers, but they are wasted on me. That doesn’t mean my priorities are better or worse; just different. And I respect that Gen Z might have priorities that are different from mine. Fine. But financial marketers need to adjust their messaging and their offerings based on what different consumer segments want. It would be foolish to encourage the financial vertical to use the same approach with Gen Z that worked with me.
The point is to determine what distinguishes Gen Z from millennials and tailor the Gen Z offer accordingly. Dig deep. Conduct focus groups. Data is your friend. Chase Sapphire followed precisely this blueprint by designing a card for millennials — by millennials, and it’s been hugely successful.
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4. They’re redefining brand loyalty
Researchers have found that members of Gen Z are less likely to be motivated by traditional loyalty programs than Millennials. But they are eager to develop brand loyalty in other ways — e.g., engaging interactions such as participating in an online game. They value brands that are honest, authentic, transparent. They enthusiastically support companies who share their values, ideals and beliefs.
Such meaningful interactions are certainly important to Chloe Kim, the 17-year-old Gen Z snowboarding sensation who won a gold medal at Pyeongchang. “I love working with sponsors,” Kim explains. “It’s so much more than just a contract, I genuinely only want to work with people that I agree with on certain things. I just need to make sure we’re all on the same page.”
Get on the same page as Gen Z now, and you could have loyal customers for life.
5. They respond well to properly targeted offers
For the financial services industry, here’s the best news about Gen Z: They actually want your products. A credit card is the new driver’s license. When a young adult gets that first credit card offer in the mail — with their name on it — it’s like enrolling in the real world. It’s like getting a present in the mail, but it’s more than that. It’s a rite of passage.
That’s why financial marketers need to look at the potential of programmatic direct mail. As a marketing channel, the U.S. Postal Service isn’t going away. Your financial institution may or may not have a Facebook page or generate any kind of ROI from its Twitter account. But you can always make money with a database loaded with mailing addresses. If there is anything timeless about mail, it’s that it is unobtrusive. You check it when and where you want to check it, not when some algorithm decides to hit you over the head with it — and this applies universally to all ages, all generations, all demographics.
“A mail piece is just not the same kind of thing as an email, a display ad, or a social update,” notes Kim Davis. “Its role is different. For one thing, it’s a tangible object (hopefully an attractive one). It has persistence: Until the time comes to throw it in the trash, it has a presence in the household, and is potentially seen by a number of household members. Digital marketing messages, in contrast, tend to have one recipient, and the lifespan of a falling snowflake.”
Financial marketers need to be relevant and timely, but good luck trying to stand out amid a blizzard of digital snowflakes. Banks and credit unions need to create a physical, tangible impression for banking services that cuts through technical jargon in friendlier terms and warmer tones — one that feels real to a generation that’s grown up in a virtual world.
Jacquelyn Goldberg is VP Sales/Financial Services at PebblePost, leveraging her customer-first approach and deep product knowledge to build the financial services sales vertical. As employee #6, she was the first person in sales at PebblePost. She plays an integral role in shaping the company and driving its phenomenal growth. Previously Jacquelyn worked in sales at Outbrain, calling on Fortune 500 companies and top New York agencies.