Thought Leadership – Why Millennials Would Rather Go to the Dentist than Listen to a Bank Sales Pitch

by Lou Grilli 0

Much has been written about marketing to and attracting millennials. This is especially relevant to credit unions. The average age of credit union membership is 47 and continues to increase. Meanwhile, 4.3 million millennials are turning 30 each year. That number also continues to increase. A solution to reducing the average age of members without compromising the older demographics is to provide financial products for millennials, beginning at the time they most need it.

Millennials, as a demographic for financial services, are invaluable. According to the Global Financial Literacy Excellence Center, 38% of millennials have incomes $75k and up. Nearly half (49%) own their own home. While this somewhat reflects the statistics of their parents’ generation, the baby boomers, millennials are different than their boomer parents in many ways. As many have noted they are much more tech savvy, streaming music rather than putting in a CD, using Uber rather than hailing a taxi, pull out a phone while shopping in-store to see if there’s a better price online.

But several of their macro habits are learned from their parents, the most relevant of which are banking habits. And specific to banking habits is the attitude toward credit. Millennials have witnessed parents, or their friend’s parents, lose jobs during the recession; they know someone who’s had their house foreclosed, or at the very least they’ve seen many of their peers get overextended in debt. They see using debit as “responsible”, and the use of credit as irresponsible or risky. 64% of consumers aged 19-34 told Experian in a survey that they consider credit cards “dangerous”. For issuers looking to bring younger consumers into their portfolios, this is a problem that needs to be addressed. And to add to this, alongside their skepticism of credit cards, they come into the picture saddled with student loans, on average $37,172 in debt.

At the same time, millennials consistently ask “what’s in it for me”? They see the value in building a credit history, in developing and increasing their FICO score. They want rewards – they’ll google an offer for a credit card to see if there’s a better deal elsewhere. This leads to most millennials looking at bank communications as “junk mail”. Which is why 71% of millennials say they would rather go to the dentist than listen to what banks have to say.

So how can a credit union start building up a millennial membership in anticipation of replacing an aging existing membership base?

Communication Channels.

The challenge to winning millennials as members is to offer a product that meets their needs, using a communication medium that also meets their needs. Millennials are adept at filtering out the vast amount of information that’s coming at them. They are not oblivious to the data, just savvy enough to see that an envelope that says “congratulations, you’ve been pre-approved” looks like direct mail from 10 years ago.
Reach.

The optimum media to use is social media – through tweets, Facebook pages, and Instagram and snapchat. And the best way to reach a millennial is through word-of-mouth. In fact, in every category measured by Radius Global Marketing Research, which includes financial services, word-of-mouth is the biggest factor in influencing decisions, even more so than search engines, recommendations from sales people, or advertising.

Personalize the Offer.
Millennials span a wide gap of ages, from the end of their teens to their mid-30’s. Their needs vary widely. For the 18-22 age group, the offer needs to help them understand how to build credit, how to manage money (A great way to do this is to provide basic PFM tools online to help form a budget that includes student loans payments, rent, living expense, transportation expenses, and “fun money”). For the 22-28 age group, the offer should include best ways to save, how to buy a car and how to finance the purchase. For the 28-36 age group, the offer should also address how to deal with money when thinking about marriage, how much do weddings cost, what is a mortgage and how do I buy my first house, how much house can I afford, how much should I budget for my first baby, how do I save up for my child’s education?

Respond.
The quickest way to turn off a millennial is with an out of office response stating your hours are Monday through Friday, 9-4:30, except holidays. Millennials expect an immediate response, regardless of the time. A starry-eyed couple looking at their first dream house want to send a text asking if they can afford it, and expect a response while they are still at the for-sale property. Chatbots, or social media management firms can provide engaging responses, even if a complete answer requires more information.

Summary
Engaging millennials is a challenge. They are difficult to reach, and don’t trust much of the information being thrown at them. But reaching new members through the social media channels they trust, guiding them with information they want, with products that meet their needs, leveraging their confidence and need to be control, has great rewards.

Featured Content