Financial marketers are facing a demographic challenge as Millennials discover new alternatives that are challenging the primacy of traditional providers. Young people’s expectations are constantly changing and evolving as fintech disruptors threaten the status quo.
As the financial industry continues to explore new applications, platforms and products, the marketing muscle needed to win consumers is being stretched, with an intense focus on generating positive ROI.
Millennials were the first generation to grow up with internet. Some of these “Digital Natives” may never handle a single financial matter without somehow using a screen. And with more and more Millennials transitioning to this cashless, paperless, branchless lifestyle every day, it is imperative that financial institutions master marketing to Millennials effectively.
1. Demographics & Psychographics
You can’t engage with someone in meaningful ways if you know nothing about them. It’s like trying to buy a gift for someone you never met.
Millennials span from age 16 up to age 35, with the largest segment falling in the 25-34 range; people in this nine-year group make up 13.7% of all Americans. As a whole, Millennials make up one fourth of the U.S. population. They represent 21% of consumer discretionary purchases, topping an estimated $1 trillion in direct buying power.
Millennials are mobile. 90% of them have smartphones, and they are likely to have their phone in front of their face most of the time. Many check their phones over 150 times a day. 6% of Millennial guys admit they checked their phone while their wife was in labor. Another 6% of all Millennials have done so at a funeral.
Financial marketers will be more likely to have their messages seen and heard if they reach Millennials through the mobile channel. And yet most banks and credit unions have allocated essentially $0 to marketing in mobile channels.
Reality Check: You can’t say that your institution is serious about targeting Millennials (and Gen Z) until you have a mobile marketing strategy in place.
Unsurprisingly, Millennials age 21-34 have the highest levels of trust in online and mobile formats. This means if you reach them through online, digital or social channels, Millennials will be more willing to hear what you have to say than other generations.
When marketing to a Millennial audience, it helps to think of one person rather than the targeting the group as a whole. Create representative personas. This will help you develop content that’s more personal, conversational and engaging. For example, think of Jason, a 24-year-old who just recently graduated college . Jason likes using tech tools like Venmo and Uber, and he dreams of spending a year in either India or Australia… maybe both. That’s a good starting point, but you can continue to define and expand Jason’s persona profile. This will help you hone in on customer lifestyles and improve messaging — a big step forward from the broad demographic brush used by the marketers of yesteryear (e.g., “college-educated adult males ages 18 to 35”).
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2. Show, Don’t Tell
This is what strong content marketing is all about. With traditional marketing, you are telling the world that you are a rock star, but with content marketing, you are showing your audience that you are a rock star. Millennials who engage with your content primarily care that their wants and needs are met, so show them how your products, platforms, software and ideas can do this.
Some of the most popular ways marketers are engaging Millennials today don’t look or feel anything like traditional “advertising” or “marketing”: social media (79% of organizations), articles (78%), in-person events (62%), blogs (51%), white papers (43%) and webinars (42%).
Another way to show your audience is by using social proof. Word-of-mouth is one of the most effective forms of marketing. According to Nielsen, 85% of Millennials (ages 21-34) trust recommendations from friends and family over any other source, which is why you should highlight social proof points. Share customer testimonials. Call attention to stats — the number of shares, downloads, purchases, users, etc. Find positive mentions of your brand in social channels and retweet/republish them. Leverage customer ratings and reviews of your products and services. When Millennials see that others have bought into your product or service, they are more likely to buy in themselves.
One brand that has word-of-mouth down is Zappos. Their whole philosophy — indeed their entire marketing strategy — is built around the concept of contagious ideas. They take the money they would have spent on paid advertising and reinvest it in their customers, letting their customers sell for them.
3. Keep It Simple
Millennials like simple and useful products. Who doesn’t, right? But Millennials have higher expectations and less patience than previous generations. They are living fast-paced lives and do not have time to sift through information to see how something might benefit them, or figure out how to navigate a platform. Brands like Buzzfeed have been successful with Millennials due to the straightforward format of their articles, quizzes and other editorial formats.
Beyond the simplicity of products, the success of any marketing message aimed at Millennials will directly correlate with its simplicity. A lot of Millennials are not attuned to fintech jargon. They only care whether the product or service you are offering can meet their needs. Your marketing copy needs to be boiled down to their level — short, quick, easy, intuitive, and in plain English. No one can engage with (much less buy) what they do not understand.
4. Transparency Builds Trust
In order to build trust with Millennial consumers, transparency is key. Millennials have the web at their fingertips — 24/7 infomania. With customer reviews, forums, social pages one click away, you can’t hide anything from them. You have to be totally honest and transparent about the digital solutions you are trying to sell them. If you don’t tell Millennials the whole story, they will roast you alive. And we aren’t just talking about lies, exaggerations or misrepresentations about a fintech product or service. It is important to be honest and up front from the beginning, and that includes whatever bugs or shortcomings you are still trying to sort out.
McDonald’s succeeded in being transparent when it launched the “Our Food, Your Questions” campaign. They chose to address rumors by sharing facts, and since it launched in late 2014, the international fast food chain has received 42,000 questions and more than 3.8 million web page visitors have read the answers to the campaign’s questions.
A large portion of Millennials are transitioning to becoming financially independent, as they leave for college, graduate from college, buy their first home, etc. They need to know their finances are secure with your product/service. Ensure this confidence from the beginning. If you test their trust with one misstep as you push a digital solution on them, they might never trust you again… with the large, high value services that will help make them profitable in the long term.
5. Keep It Fresh
Millennials set themselves apart from other groups in that they do not hate advertisements. Surprisingly, Millennials will “like” content marketing campaigns 52% more frequently than older generations. But originality is the only way to make this connection with Millennials. They value and reward creativity. Launching something fresh that has never been seen or done before can be scary, but Millennials love this stuff. Take a leap of faith and it just might just pay off big time.
Research also reveals that Millennials engage with sponsored content, particularly when it is tailored to their socio-cultural interests/lifestyle. These so-called “native advertisements” are a hybrid between genuine and paid advertising (often paid content disguised as unpaid) and it is something that online users are seeing more and more of.
6. Think Like a Startup
Startups are owning the fintech game, and there is much that can be learned from their success. Here are a couple tactics that will help banking providers as they pitch their own digital solutions to Millennials:
• Focus on the why, before the what or how. Most companies miss this, and tell their target market what their product/service is or how they can get it without explaining the benefits or the problem it solves.
• A/B testing. Startups are all about trial and error and learning from mistakes. With A/B testing, you can compare two versions of a webpage, app., email campaign approach, etc. against one another and see which performs better. It’s old school thinking but it works with modern marketing.
Study the ways in which fintech startups are selling their solutions to Millennials and you’ll get more good ideas.