A younger Millennial whips out her iPhone and shoots a picture of her Social Security card so she can attach it to her digital credit card application.
“Are you crazy?” her security-conscious Boomer father asked. “What are you doing?”
Too late. As the daughter hits “send” on her phone, she explains to her father that she is simply following the card issuer’s online account opening protocol. She also used a referral link she received from her older sister, which would net them both a $50 bonus.
This situation illustrates a few key points about Millennials. They place great faith in recommendations for banking services from peers. They feel completely comfortable using mobile services for financial activities. Ultimately, they are going to live life in today’s world, not according to older ideas.
These are just some of the observations found in a 45-page eBook from Harland Clarke.
“Technology is a lifestyle for Millennials, not a toolbox,” the report explains. “”They trust it. As digital natives, it’s in their DNA.”
According to Harland Clarke, the lesson here for bank and credit union marketers — who are often not Millennials — is that marketing strategies must be orchestrated around the way Millennials live and the world they inhabit. This means rethinking all four Ps in marketing: products, pricing, promotions, and place (i.e., retail delivery channels).
This is a time when, the report states, “consumers control how brands do business with them,” and those institutions that adapt will succeed. “Those that don’t will fall behind, and eventually die off.”
Avoiding Millennial Marketing Mistakes
Harland Clarke’s report provides marketers with a detailed collection of facts and recommendations for reaching a demographic segment that’s increasingly the core target audience for banking services — numbering over 80 million strong, or one in three American adults. The eBook sets out detailed strategies for institutions looking for better ways to connect with this often complicated, sometimes contradictory demographic.
The good news, according to Harland Clarke, is that banks and credit unions haven’t yet lost the Millennial generation. But the bad news is that they haven’t won them over either.
“Although Millennials use more banking channels than any other generation, they have the fewest satisfying interactions,” the report notes. “They are the least likely generation to strongly agree that their financial institution knows them, looks out for them, or rewards them.”
To meet the marketing challenges this generation presents, here are six specific things Harland Clarke says financial institutions can’t do.
1. Don’t Treat Millennials As If They Were All Alike
The sheer size and diversity of the Millennial generation makes sweeping generalizations about Millennials risky. The eBook points out that older Millennials have already entered the years of homeownership, parenthood, and even thinking about retirement planning, while younger Millennials aren’t anywhere near those stages.
Beyond this, the Millennial generation continues to grow in size and diversity due to the influx of young immigrants, who share core Millennial attitudes but also introduce some new additional cultural influences to the mix. Nationally, nearly three out of five U.S. Hispanics are Millennials, and in some states minorities represent over half the Millennial audience.
“Millennials are changing the definition of diversity and inclusion,” Harland Clarke notes in its report. “They accept traditional diversity — race, religion, ethnicity, sexual orientation, gender identification, and age — as a given. They now consider the term ‘diversity’ in a cognitive context, meaning people with different thoughts, ideas, philosophies, skill sets, etc. Thus a diverse workplace or social setting isn’t just one where people look differently, but where they think and act differently as well.”
2. Don’t Misconstrue Their Love For Technology
If your creative team searched any stock photo service for the term “Millennial,” finding a shot that doesn’t show a smartphone in everyone’s hands would be difficult. And it’s true that Millennials love technology. But that does not define everything about them or how they prefer to handle financial matters.
“Millennials aren’t anti-establishment when it comes to their banking preferences,” says Harland Clarke in their eBook. “They just aren’t fixated on traditional ways of doing things, and are more likely than not to try new trends and alternatives in an effort to find what works best for them.”
What they want out of the technology is speed and convenience. What banks and credit unions offer must not only be tech, but be getting it right.
“They want what they want, and they want it now, on their terms,” the report explains. “They have little patience (or tolerance) for experiences that aren’t frictionless, clear, or fast — either online or in real life.”
However, Harland Clarke’s eBook points out that mobile services aren’t the whole picture for Millennials. Banks and credit unions can’t ignore the quality of the experience they offer on other channels.
For example, one study found that two out of five Millennials prefer using a computer rather than a smartphone for handling banking transactions.
The report advises financial institutions to provide smooth website experiences to appeal to Millennials. One specific example concerns onboarding. Harland Clarke recommends minimizing paperwork, opting instead for short, interactive, online questionnaires vs. lengthy documents that require new accountholders to print, sign, scan, or fax.
Branches can’t be forgotten in the zeal to digitize either. The eBook notes that nearly all Millennials cite “convenient branch locations” as an important factor when choosing a bank or credit union.
In other words, digital first — but not digital only.
3. Don’t Misunderstand Their Attitudes About Money
A key generational shift marketers must make involves how Millennials think about money. This can affect how financial institutions pitch products and services to this generation.
In one sense, Millennials can be less materialistic. “They have little interest in status symbols and luxury brands, as did Generation X,” the eBook says. “They have little interest in living in the ‘right’ neighborhood or belonging to the ‘right country club, as did Baby Boomers.”
One is the attitude of control. For this generation, “the meaning of life lies in control. The more control they have of their finances, careers, and social lives, the more freedom they have to engage with the world in ways they find most meaningful and to create experiences they consider most valuable.”
Instead of equating money with “stuff,” Millennials “view money as a means for saving time… a tool to support the way they want to live their lives.”
On the other hand, they see fees as a reason to move their business elsewhere, and regard “free checking, free rewards, and free cash-back options that fit their budgets and lifestyles” as major attractions.
Also, they see debt as a hindrance.
As a result, when Millennials think of saving, they aren’t thinking about retirement. “The affluent among this generation are focused long-term on financial freedom,” the eBook says.
Banks and credit unions need to bring their skills at advising consumers on how to navigate the credit world and more to a generation that is short on trust but in need of advice.
“One way to do this is to focus on the financial issues that Millennials struggle with and the financial goals they deem important,” the report suggests. “Then give them the tools they need to monitor and control their financial planning, budgeting, and spending. Empower them with advice and information to make smart financial decisions. Show them the tangible rewards that goal setting and follow through can achieve.”
Advice can take multiple forms. For those who like face-to-face service, provide personal advice. But also provide mobile and online, do-it-yourself financial management tools. Remember the importance they place on control — enable them to bring all of their financial matters together in one place.
Focus on immediate needs. Savings can be a struggle for Millennials. Show how putting by just $100 each pay period for a year could help them get their own apartment or make a down payment on a car.
4. Don’t Talk Down To Them
Financial institutions attempting to connect with Millennials must tread carefully. They have knowledge that these consumers need, but they must communicate it in palatable ways or they’ll fail to make the connection.
“Despite being the most educated generation in history, and having seemingly endless sources of information at their fingertips, many experts believe Millennials are lagging behind their predecessors in basic financial literacy,” the eBook reports. This fundamental lack of knowledge can make their financial challenges even more challenging.
Traditional financial players face an uphill struggle before they even open their corporate mouths. As the report details, Millennials’ formative years came during the Great Recession. The legacy is distrust of financial institutions and advisers
So the tone banks and credit unions take in offering help is critical.
“They want a conversation — they don’t want to be ‘spoken to’ or ‘talked at’,” Harland Clarke stresses. Traditional approaches may not engage Millennials. And they put a premium on communication that emphasizes “honest values.”
“Overly slick marketing materials are viewed as impersonal and old-fashioned, yesterday’s way of doing things,” says the eBook. “Likewise, authoritative tones and overtures about experience, legacy achievements, and milestones are now considered self-centered and out of touch.”
Help need not be provided solely via apps or one-on-one meetings. The report indicates that Millennials, a highly educated generation, also welcome appropriate formats like classes, seminars, and workshops.
5. Don’t Think They All Want To Communicate Digitally All The Time
Millennials’ preference for online communication is genuine, but not exclusive.
Millennials’ way of shopping illustrates this. They first seek information online, such as peer reviews and thought leadership from experts in their fields. They devour product reviews. They look for online “social proof” that the brand will meet their needs. Then they look for confirmation from family and friends. Once this research is complete, Millennials are comfortable making their own decisions on what to buy and from whom.
“While they do want to engage personally and emotionally, they look to connect digitally first, and then face-to-face,” Harland Clarke explains in its report.
And despite pronouncements that “email is dead,” the eBook also notes that Millennials are open to communication by marketers using both email and social channels.
“The caveat is that for email to be effective, it must be done right,” the eBook states. “This means personalized and targeted messaging, content that is useful, and not overladen with too much information. Concise, relevant, and timely will win the day.”
Living on social media, Millennials who complain about a brand’s service in online channels expect a timely response — within ten minutes.
The bottom line here, says Harland Clarke, is not picking a single “Millennial Channel.”
“The key is to ensure no matter what channel the account holder wishes to engage, the financial institution can offer a personalized and seamless experience,” the report advises.
6. Don’t Forget Millennials Love Experiences
Decades ago, banks and credit unions could build deposits by offering merchandise premiums for opening accounts. The days of building business with toasters and teddy bears have long gone, but people still like bonuses. The interest Millennials have in cash-back programs and other rewards scheme proves that.
However, to appeal to Millennials, marketers need to remember what’s important to them.
“Millennials’ preference for spending money on experiences — concerts, travel, sporting events, etc. — is driving growth in the ‘experience economy’,” Harland Clarke observes. “Over 75% of Millennials choose to spend money on an experience or event rather than a materialistic possession.” So incentives involving experiences may resonate more than any more things.
In a similar vein, institutions’ approach to charitable support may require rethinking to resonate with Millennials.
“Members of this generation don’t just donate money,” the report notes. “They also volunteer and recruit their social networks to become involved in social and charitable causes they belief in. Millennials take the corporate social responsibility of companies they deal with seriously.”