What You're Missing If You're Missing Out On Generation Y

Is your credit union equipped to attract, educate, and serve today's young adults?

 

By On Your Way

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What if you could attract a new group of members who were eager to learn how your products and services could help them prudently manage their finances? What if this same group might become loyal members as well as be willing to voluntarily recommend their credit union to friends and peers?

Most likely, you’d be interested in getting more products and services into the hands of this group, better known as Generation Y, ages 18 to 32. One thing is certain: Your competitors are already working hard to win the attention and loyalty of what is believed to be our nation’s largest-ever population segment.

Fact is, if you’re on the sidelines, you’re missing out -- both now and in the future. Time to "get into the game." And credit unions, coming off their best quarter in years, are going to have to deploy fresh approaches and new marketing tools (as well as dollars) to reach this audience . . . and the goal line!

Generation Y is not only more mobile, more interactive and more connected than ever before, but it is also more affluent and, according to wealth-watchers, expected to inherit more than $1 trillion during the next two decades. Credit unions must be more aggressive and better skilled if they are to get their share of these customers and if they are to help them wisely manage their financial assets.

Unfortunately, credit union managers and marketing executives too often regard today's young adults with a mixture of curiosity and apprehension, mistakenly targeting them with the shop-worn messages and methods that may have worked wonders with their parents and grandparents. Surprisingly, Gen Y still shares similarly important needs as their forbearers:

  • Interest rates and savings plans for big budget items;
  • Fair loan packages at fair rates and terms;
  • Financial advisors who appreciate and understand Gen Y’s short and long-term lifestyle goals.

Experience indicates that time and patience are required to win Gen Y’s trust, and mere newspaper ads no longer cut it. Targeted direct mail campaigns, opt-in e-mail educational and lifestyle messages and web-based, read-and-reward systems are vital. Once onboard, these members prove to be exceptionally loyal.

Resources vs. Results

Limited staff resources and budgets can make reaching Gen Y an extreme challenge. One answer is a "cooperative" approach using a sophisticated web presence that communicates-while-it-educates five-days a week with Gen Y-ers in ways they expect and prefer: No sticks; plenty of carrots. Those carrots take the form of gift cards, electronic gear, video game systems.

One groundbreaking young adult outreach program harnessing the co-op spirit of credit unions and getting Gen Y’s attention is On Your Way. Its program incorporates a progressive, fun website that all client credit unions share in the cost of operating and maintaining, which makes it affordable for each one involved.

One unique feature is the ability of each client to personalize the site with its own brand colors, logo, and customized content. Typical weekly maintenance time? Less than 30 minutes!

"We’ve seen firsthand the effectiveness of On Your Way," said Melissa Hacker, vice president of operations for Safe Harbor Credit Union, Ludington, MI ($35 million in total assets/4,400 members). "Our young adult members do refer their friends. They do talk about the site. They feel a special connection to our credit union."

New York author Kathryn Finney, CEO and Owner at TBF Group, LLC, recently noted, "Women control more than 80% of U.S. spending. And this is just the start of a sweeping change." It’s no coincidence, then, that the majority of readers of websites aiming financial education at young adults are women. At an estimated 75%, On Your Way is no exception.

"I like the dynamics the Gen Y-targeted website On Your Way created for us," said Elizabeth Dodd of Cinfed Credit Union, Cincinnati, OH ($308 million in total assets/30,000 members). "It’s branded throughout for our credit union, which is really authentic . . . much better than other ones I have seen that basically just have their logo pasted on a page."

On Your Way serves about 50 credit unions from California to New York -- $24 million to $2 billion in assets -- helping them reach out more effectively to young adults. To learn how your credit union can benefit from taking part in the program, visit www.onyourwayinfo.com. A 30-minute, one-on-one, live e-tour of the program is available, providing an overview of OYW’s foremost features.

This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.

If you are interested in contributing an article on CreditUnions.com, please contact our Callahan Media team at ads@creditunions.com or 1-800-446-7453.

 

July 11, 2011


Comments

 
 
 
  • Love the fact that a small CU can look "not so small" with an initiative like this. Well done!
    Roger Conant
     
     
     
  • I wouldn't disregard us completely! As a member of Gen Y, most of my friends are self-sufficient now and not living off their parents.

    Also, I have been having conversations with a lot of friends and coworkers regarding credit cards, auto loans, and mortgages. Most of us have credit cards and want to get auto loans within the next 4 years. I know I am more likely to get a car loan from the same institution I have my credit card if the rates are right, so the possibility of growing a relationship is highly likely. We will be profitable members, just not immediately.

    So don't forget about us. I think we are more than an experiment. We are here to stay and growing older by the day!
    Alexandra Gekas
     
     
     
  • Marketing to GenY is a fantastic idea If the goal is to increase the number of accounts without regard to profitability. However, if a Credit Union is at all concerned about profitability, their ability to fund operations, invest in new / enhanced capabilities (including online banking, mobile banking, RDC, etc.), enhancing the dividend to members, etc., then marketing to Gen Y probably tops the list of the worst ideas.

    Most GenY's - in fact - some 60%+ are supported by their parents for the most basic expenses (read: http://bankblog.optirate.com/still-think-that-gen-y-is-a-profitable-customer-segment/). Exactly what kind of relationship do you expect to establish with a demographic that is essentially on welfare?

    Most GenY are only interested / capable of supporting a DDA with a debit card - and we all know that most CUs (certainly all CUs with assets less than $1 billion) will lose money on this "relationship".

    We all know that GenY is interested in the WOW factor (read: http://bankblog.optirate.com/can-your-bank-or-credit-union-deliver-what-gen-y-wants-are-you-sure/) and my guess is that most CUs cannot deliver that today or anytime soon. Can your CU measure up to the wow! factor of BankSimple (http://www.BankSimple.com)? Be honest...

    But even if a Credit Union could see past all of these obstacles with the objective of generating a huge profit when the GenY inherits wealth... well, I've got some bad news for you. A typical consumer maintains a banking relationship (yes, that includes a relationships with Credit Unions) for 3 - 7 years. 1st year accounts have churn rates of 20% - 40% and 10%-20% annually thereafter. By the time a typical GenY is in the position to inherit, (s)he will have moved her/his banking relationship a few times.

    So, you still want to spend tens or hundreds of thousands of dollars to deploy technology, incurring marketing expense and the time of every senior officer in your CU? OK. But I suggest that you reserve a small amount of the marketing budget on acquiring profitable members, so that you can eventually pay for the GenY experiment.
    serge Milman | OptiRate
     
     
     
 
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