Financial services are waking up to the potential of Gen Y consumers. Millennials may not have a lot of money now, but they are determined to pay down their debt and conserve resources for the future. Coming of age in an era of massive financial uncertainty, they may even come to be known as “Gen Frugal”.
That’s good news for community banks and credit unions which are all about helping moderate income people responsibly manage their own money.
Last week I was interviewed by Myriam DiGiovanni of the Credit Union Times. She wrote an article titled “Forget the Cool Factor, Focus on Millennials’ Needs” based on our talk. Here the full article (bold face mine):
Looking to engage meaningfully with younger consumers? Then stop assuming and start connecting through a common interest rather than trying to sell credit unions. “I think the main difference in Marketing to Millennials™ and other generations is that they have great filters–they only see what they want to see. If you want to engage them, the message can’t be about brand but rather something they care about,” said Carol Phillips, president of consulting firm, Brand Amplitude, LLC. “It’s not about being hip but providing services they find useful now, like finding a job, figuring out how to finance their education or new business. They are starting out their lives at a difficult time and credit unions should credibly speak to that.”
She added that credit unions shouldn’t fall for the stereotypical myths surrounding this group such as they are all tech savvy–they are in fact tech dependent. Another myth is that they have money–many don’t and those that do are in saving mode or paying down debt said Phillips.
Forget about making the luxury appeal. When pricier purchases are made they tend to rationalize it based on whether it’s a good investment. According to Philips, for example, moving in with their parents is not viewed as an admission of defeat. Rather they see it as a strategy for saving.
Don’t look to the exclusive use of social media as a guaranteed in either. While they are very social, Millennials have close bonds with their parents, often consulting them regarding financial matters or major life decisions. Phillips said it’s yet another challenge because typically you’d market to the buying group, which in this case would include their trusted board of advisors consisting of parents, family members and friends. The key is for credit union to reach out and be a part of their world, and Phillips said initiating a conversation is a good start. Given the age span of the group is from 16 to 30 years old, she also advised credit unions to segment by interests. From there, credit unions can figure out how to connect in interesting ways whether around careers, music, causes or even sponsoring events that matter to them rather than talking about the latest checking product.
“Meaningful connecting requires recognizing that they are not the same as their parents. They do not respond to marketing, and that is the definition of different,” said Phillips. “Take time to understand who they are as people and introduce your services in context of what is relevant to them. Social media is about a humanization of the brand but is still just a tool [and] not a strategy. So be interesting, have a conversation.”
She added their values are no different than previous generations-they care about family, leading a good life, finding a fulfilling job and they want to give back.
One bank that seems to be getting it right with young adults is UMPQUA, a fast growing regional community bank in California, Oregon and Washington.
Their web site looks more like an ecommerce site than a traditional bank and they call their branches ‘stores’. The language is plain English and yet stylish. The checking account featured on the home page is called HIP( for High Interest Paperless Checking) and offers 2% APR on deposits and returns ATM fees. Nothing tricky about that! News is broken out locally and is called ‘murmurs’. There are quick links to ‘deals and steals’, ‘reorder checks and supplies’ and ‘attend a neighborhood event’. The navigation is straightforward as well and feels like you could do everything you need to do from opening an account to managing it to taking a loan, right from the web. There are spam alerts and interesting discussions. The site is very sticky and feels quite local, despite being spread across three states.
The short, awareness-oriented TV spots featured on the home page are cheerful, and perky, and not very ‘bank-like’ — “Bank on the Bright Side“, “Optimists Unite“, “Pursue Hopefulness“, “You deposit your check in the Northwest economy, like a gentle rain in a garden of courage“, “Optimists are just realists ahead of their time“. The graphics and the voice over work together to create a hopeful feeling. I feel better just listening to them!
The part of the website I like best is under the tab heading ‘UMPQUA Life”. The sub categories speak directly to Millennial lives – Support, Belong, Discover, Inspire. The sub-subcategories further emphasize local charitable and volunteer opportunities, neighborhood events and community responsibility. There are links to social media like Twitter, but they are discreet. The site itself already feels like a social media site. Even the history page is fun, with just the right information about the banks’ origins with emphasis on what it is doing in the community with music, eco-friendly programs and being included in Fortune’s Best companies to work for.
It should be noted that UMPQUA’s products are not all that special. But, they are presented in a relevant and very accessible way that speaks directly to the Millennial Mindset®.
I suspect UMPQUA has been successful in attracting a higher than usual percentage of young adults and people who want banking to be less stuffy and more a seamless part of their lives. Other banks and credit unions could learn from their example.
