Guess what marketing strategy would get Millennials to switch to your financial institution? Go ahead. Guess. Would you need to build more branches? Hire more staff? A slew of marketing tips? Place a small army of ATMs in prime locations? Nope, nope, nope, and nope.
You’d just need to build a better app.
In a recent survey involving more than 4,000 respondents the majority said that their current mobile banking app was “lacking” (53%). They also said they would switch to a different financial institution if a better app were available. And the generation that made the majority of that majority? Millennials.
Yes, the secret to the current marketing fad de jour “Millennials” — a buzz word that has quickly surpassed “Big Data” as the next, next big thing — has been revealed. The newest and strongest demographic, now surpassing Boomers in purchasing power, can be captured and converted into new members through mobile banking.
These smartphone savvy users are also very interested in “Branchless Banking” and would be most receptive to even paying a monthly fee, in this case, $3, to use a better banking app.
The big reveal in this survey is this: for Millennials, your most important branch is their most important and most personal device, their smartphone. Creating and marketing a better mobile banking experience will enable you to tap into a demographic that is 80 million strong.
This insight presents a once-in-a-generation opportunity to endear yourself to a group that can become the coveted member-for-life at the very beginning of their banking life. Let’s dig deeper to see how this generation ticks and why they will shape the future of banking.
Your timing couldn’t be better
The age of Millennials 19-37 is the prime occasion to find and deepen a relationship with a financial institution. It is the perfect time to win loyalty for a lifetime. This generation sees technology as connective and intuitive. For many it is not the means to an end. It is the beginning, middle and end. They came of age in the internet era. As a result, they are “connected” with their peers and their institutions like no other generation. Formerly known as Generation Y or Echo Boomers, they are more diverse and more educated than any other age group before them.
And here’s the very interesting tidbit when it comes to financial products, they are buying their first homes much later in life. Meaning the opportunity to capture a mortgage bearing member is still possible even if you’ve come late to the marketing-to-Millennials game.
They really are that into you.
A fairly common misconception that has gotten way too much attention is the rumor that Millennials are into anything but finances. Recent studies have proven this rumor to be a myth. This generation craves more financial information than the others, and they’re not afraid to ask for help. As they hit more significant life stages like advancement at work, having a child and as we mentioned before, owning their first home this need will only increase.
Additionally, this generation absorbs information in a completely different way. Long blocks of text are often avoided as they have been trained to scan their information for photos, videos and bullet points. Infographics seem to be custom made for their kind of information gathering.
Cash isn’t king.
More than any other generation before them, Millennials don’t rely on cash to get through their day. When asked in a recent study about the amount of cash they carry, nearly a quarter of them say they carry less than $5 with them seven days a week. Imagine putting your marketing dollars behind a campaign touting your convenient ATMs to this market. It would be more than wasted money. You’d be spending precious dollars letting them know you are out-of-touch with them and their lives.
They think globally and bank locally.
Most financial institutions are born and raised in their local communities. Does this point of differentiation matter to this young, fast-moving generation? Absolutely. More than half of the Millennials surveyed said that working with a local financial institution was important to them. And 40% of Millennials will pay more for a service if it’s local. The reason? They see their purchases and financial choices as a way to stay connected the their communities.
What to do with them once you have them.
In summary, the key to Millennials banking-hearts is through their phones. And once you have them, make them feel connected. Stress you’re impact on the local economy. Emphasize your digital offerings and let your employees reach out to them via social networks, texting and emails. And when they’re ready to learn about your credit union and how it can affect their lives, communicate in the way they best absorb information.
The bottom line is this: as different as Millennials may seem, at their core they have more in common with other generations than you might think. They’re grounded, community-focused, and can become loyal and lifelong supporters when you correctly present them to your institution.