Credit unions want millennials because aging down is a long-term survival strategy. But millennials, easily the most scrutinized generation ever to mature, are influencing widespread change throughout the credit union industry, from university partnerships and marketing segmentation to a quicker adoption of technology.
The credit union average member age remains in the mid to upper 40s, and this generation is maturing quickly. If there’s ever a time to develop relationships with this generation, it’s now.
The average member age at Altra Credit Union ($1.1B, Onalaska, WI) is 39. Compared to the industry’s average of 47, that’s quite an accomplishment. The institution has effectively moved the needle younger by offering products that appeal to the young adult set, like youth certificates, student loans, and branded student credit cards. It’s also formed a Go Mobile team to increase online and mobile service education. The strategy seems to be working.
From 2010-2030, the U.S. labor force-age populations (ages 15-64) are projected to grow by more than 5%. Compared to countries like Japan, German, and Italy, which are all projected to see significant drops in population, this is good news. But the United States wouldn’t be projected to grow like this without minorities. Without them, the U.S. working age population would decline 8%. And there’s opportunity there. Many of these new immigrants are young, employed, and underbanked.
To grow younger, some credit unions have tailored products and service to better fit the needs of the millennial generation; others have gone directly to the source by partnering with local colleges and universities. Such is the case with Ent Federal Credit Union ($4.2B, Colorado Springs, CO). Since 2008, Ent has been the official financial institution of the University of Colorado, Colorado Springs. The institution hopes the relationships it builds while students are on campus will continue after they graduate.
“What matters to you, matters to us!” That’s the motto of Warren Federal Credit Union ($573.2M, Cheyenne, WY), and it’s the tagline it uses to recruit younger members from its Southeast Wyoming and Northern Colorado communities. For example, the credit union eschews the stereotype of massive numbers of young adults living in their parents’ basement. Instead, it treats its younger members with respect and takes the time to listen to what they really need, not what the credit union thinks they need.
Even before the University of Houston played a game in its new football stadium, TDECU ($2.7B, Lake Jackson, TX) saw an opportunity to build brand awareness among university students and to underscore its community commitment. In summer 2014, the credit union announced a 10-year, $15 million agreement for the naming rights, but took it a step further to establish a partnership with the university including financial literacy classes, various additional sponsorships, and commissioning its college of architecture to design its newest on-campus branch.
Few credit unions are as synonymous with youth outreach as Listerhill Credit Union ($674.4M, Sheffield, AL), which has used clever guerilla marketing, giveaways, and a college campus presence to grow younger. Of the members the credit union has gained since January 2014, approximately 50% of that group is 18-34, with an average age among them of 36.
One of the most difficult aspects for many credit unions in connecting with and serving today’s young membership is that there are so many different misconceptions and generalizations obscuring who these individuals are, what they want, and what type of business they can generate for their respective generation. That can make it difficult for credit unions looking to establish a young adult strategy. After all, how do you connect with millennial members whose future is still to be determined?
Based on philosophies, credit unions seem to be the perfect match for millennials looking to start a financial relationship. But there’s a problem. Based on a recent report from the Filene Research Institute, credit unions do a poor job of showing their own impact. Although that’s not great news, it implies opportunity for improvement. But how?
One is 59, the other is 26. One received a letter from her credit union promoting life insurance. This is why segmentation is vital for effective marketing; not every member is in the same stage of life, therefore it’s imperative for credit unions to adjust their marketing efforts accordingly. Is it relevant to the member’s current age, financial needs, or interests? Is it attractive or unique? Is it personal? After all, millennials want marketing tailored toward them, not their mothers.