The term “millennial marketing” is often touted across numerous industries in an effort to better understand a generation that’s growing in many ways. According to the American Bankers Association (ABA), millennials are the fastest growing customer base, account for 83.5 million people in the United States and is expected to make up to 44 percent of the workforce by 2022.
It’s critical for small and mid-sized banks and credit unions to evaluate how to market towards and do business with the largest generation in the U.S. workforce. But who are they?
Pew Research Center defines millennials as people born between 1981-1996. They’re often described under choice buzzwords: technology-driven, entrepreneurs, community-focused, entitled, coddled and lazy, among many others. Crafting messaging that resonates with this group can be confusing for banks of all sizes. However, there are a plethora of ways banks and credit unions can rethink their approach to meeting the expectations of millennials. Banks can develop more effective millennial marketing strategies by understanding some of the defining characteristics of today’s largest living generation.
1. Become a conscious capitalist
Millennials take conscious capitalism into account on every monetary decision, including who they decide to bank with. Conscious capitalism operates under the notion that businesses must serve the environment and surrounding community. Across all industries, institutions that make an impact beyond their bottom line gain the most attention. One financial institution that is tapping into this movement is Wells Fargo, which aims to donate 1.2 percent to 1.5 percent of its earnings each year, and in 2015 it donated $25 million to NeighborWorks, a nonprofit aimed at financial education and supporting down payments on homes. Regardless of the initiative or the donation amount, if your financial institution participates in philanthropic events around the local community, make sure that message is heard by the right ears.
2. Educate your account holders
Four in ten millennials aged 25 to 29 years old have at least a bachelor’s degree – and that number is rising. Despite this, 75 percent of this highly-educated generation incurred student loan debt, with an average debt burden of $29,000, according to the ABA, and many don’t know how to manage it. Factor in that millennials are known for an entrepreneurial spirit, and it becomes critical that financial institutions stress financial education. As these young business leaders apply for personal and commercial loans, utilize marketing collateral to detail the life of a loan and the requirements to gain approval. Explain how student loan debt impacts individual credit profiles and the proper documentation required for banks to analyze credit risk and come to a sound credit decision.
3. Leverage advertising technology and target on social media
As technology becomes customary rather than simply convenient in their everyday lives, millennials are increasingly turning to their phones for an online banking experience. Whether it’s for tasks as simple as transferring funds across accounts or providing the ability to apply for a loan entirely online, a web presence is non-negotiable for all banks. In fact, millennials are three times more likely to open a new account with a phone than in person. Small gestures like offering the option for borrowers to upload documents onto a secure portal and sign with an electronic signature to speed up the loan decisioning process will increase client satisfaction and play an important role in the decision process for customers searching for the right bank.
Learn more ways to leverage technology and achieve higher customer satisfaction.
Furthermore, how is your financial institution’s messaging reaching your millennial audience? It’s time to unlock the power of digital advertising to target content toward the right screens. According to the 2018 Nielsen CMO Report, only 21 percent of marketers deemed print channels effective. If your bank or credit union is only utilizing print or direct mail campaigns, it might be time to reevaluate the strategy. Utilize platforms such as Google AdWords or Bing Ads to hypertarget potential borrowers by keywords, location, income and previous browsing habits right on their smartphone, tablet or laptop. According to the ABA report, 77 percent of millennials say their mobile phone is always with them. For institutions with a social media presence, use LinkedIn or Facebook Ad Manager’s audience targeting to tailor messages toward social media profiles right in their pocket.
4. Humanize the banking process
There is one facet of banking for which small financial institutions will always have an advantage over big banks: building personal relationships between lenders and borrowers. While millennials expect an online banking interface that is easy to navigate, it’s still important to remember names and personalize each lending approval process based on the specific needs of the borrower. According to Deloitte, millennials value high-quality frontline staff interactions. Perhaps the most fundamental way banks and credit unions can improve customer service for millennials is humanizing the customer experience with a friendly greeting and attentive representatives – whether on the phone, in-person or online.
As consumers, millennials like to see themselves in the media they engage with. This trend is no different when it comes to financial institutions. The writing adage “show don’t tell” applies here. Rather than writing a text-heavy newsletter or email campaign featuring stock images of people smiling or shaking hands, include a picture of a happy account holder from your financial institution or perhaps a high-performing employee. Show customers that your financial institution is made up of community members like them and isn’t just dedicated to supporting the financial health of the community, but the account holder as well.