Winning Hearts and Minds of Millennials
Posted by Michael VanErdewyk
Millennials aren’t coming into your branch asking about checking accounts, car loans, or even student loans. Where are they going? Addicted to the 24/7 accessibility and near-instant response of online and mobile banking, these future customers don’t see banks in the same light as their parents do. To millennials, banks are like brick-and-mortar bookstores—going by the wayside, replaced by Audible, SoFi, and CreditKarma.
Yet, you need to win these future customers because they define your growth.
Millennials are legion. In just five years, this generation born during the ‘80s and ‘90s will comprise the majority of the work force. Millennials number some 83 million and account for about $1.4 trillion in buying power. They’re often demanding, seemingly entitled—and they represent a revenue opportunity you cannot afford to overlook.
Danny Crichton, a Techcrunch contributing writer and a millennial, writes about his cohort in the following way. “My generation witnessed 9/11 and the wars in Afghanistan and Iraq … we were hit with the global financial crisis right as we were expected to get started in the workforce. That colors your worldview.”
And in a recent article, Forbes contributing editor Shama Hyder notes, “For this hyper-connected and tech-savvy crowd, finance is more synonymous with crowdfunding, virtual currencies, and online payment platforms than it is with the brick building with a drive-thru ATM on the corner.”
Millennials see the world through the lens of children and family, a structured life, patriotism, globalism, and environmental and social responsibility. They’re the most racially diverse—nearly 43% are nonwhite—and least-homogeneous generation in history. Their lifestyles vary widely. Actually, millennials are divided into three subgroups. The 18-to-22 age group is mostly single, in school, and frequently asks parents for financial advice. The 23-to-29 age group is divided more or less evenly between married and single status and is generally employed. It’s most likely to create budgets and save for houses and vacations. Millennials 30 and older are usually married and employed, saving for retirement and their kids’ education.
As a bank or credit union, what do you need to know to win the hearts and minds of this dynamic generation?
Many millennials have little affection for banks or banking. According to Ms. Hyder, 53% of millennials surveyed don’t think their bank offers anything different from a competitor. And 71% say they’d rather visit the dentist than listen to what their banks have to say. Many are annoyed by complex banking products and services and unexplained “gotcha” fees.
What Can You Do to Change That?
You can mitigate these issues with a multipronged marketing strategy built on millennials’ concerns about financial security, their technology savvy, and, where it exists, your student loan relationship with them and their parents. Though 74% of millennials think they have good financial habits, 41% are “chronically stressed” about money. A surprising 34% give themselves a grade of C, D, or F in their understanding of personal finances. (Perhaps this last point explains why some 63% don’t have a credit card.) Close to a third don’t know their credit score or how it is calculated. Still, many millennials respect balance in their lives. They’re preparing for the future but, at the same time, are willing to take on debt to pay for vacations and other life experiences. This is where their friendly bank or credit union comes in.
Forward-thinking institutions leverage these demographic insights and commit to competing for the hearts and minds of millennials:
- Think YouTube financial education videos.
- Consider creating a platform built around simple-to-use mobile banking—because three in five millennials will use their bank’s mobile app. (Mobile banking should not be an afterthought.)
- Be ready to absorb the costs of some services in anticipation of nurturing a relationship that will last through mortgage, investment, and retirement needs.
- Proactively offer to help millennials refinance their student loans.
- Be transparent, both online and in person. Build alliances with your young customers through a well-thought-out social media presence.
By the way, millennials do voluminous research on potential purchases. They actively consult with each other, and they avidly read product reviews, frequently taking the advice of strangers. Never underestimate the power of influence or millennials’ willingness and ability to endorse you or trash you online.
Millennials are the ‘next big thing’ in financial technology services, and they’re worthy of you taking the time to build a coherent marketing strategy to win their loyalty and keep them coming back to your institution for other products and services.