Credit unions all over the country are racking their brains to generate new ideas for promotions, products, and services that can enhance their appeal to the ever-elusive members of Gen Y. Current economic woes emphasize two areas in particular where I feel credit unions can specifically provide the type of value that will cause Gen Yers to stand up and take notice.
The financial world has experienced deep seismic shocks over the past two years, and fallout from this negative economic environment affects everyone, including Gen Y. With credit availability dramatically scaled back, many young individuals are having a very tough time building a solid credit history – something desperately needed to function in today’s society. This challenge stems from two reasons: Gen Y’s lack of financial knowledge, and lack of borrowing opportunity. Credit unions can help in both areas:
Lack of Financial Knowledge
In 2008, thousands of high school seniors from across the nation completed a survey developed by the Jump$tart Coalition for Personal Financial Literacy, a national coalition of organizations dedicated to improving the financial literacy of kindergarten through college-age youth, headquartered in Washington, D.C. The survey evaluated their basic financial knowledge. The students failed miserably, attaining an average score of 48.3 percent, the lowest in the survey’s 11-year history. College seniors fared better on the same survey, scoring an average of 64.8 percent. Basic elements of financial literacy are no longer taught in many school systems, and the majority of individuals born after 1980 have never received any type of formal financial education.
Younger people probably realize on a basic level that failing to make payments on credit cards or bills negatively affects their credit score. However, what many often don’t realize are the relatively simple steps a person can take to build and maintain good credit. If you are looking for an engaging message to include on the youth section of your website, or in a youth-related mailing, I would include a list of action steps that someone can follow when looking to establish good credit.
Lack of Borrowing Opportunity
Because many Gen Yers have little or no credit history, they are among the first to feel the effects of tightened underwriting standards. Several of my friends who have graduated from college and hold down responsible jobs are having trouble obtaining loans at all, or face extremely high rates, even at credit unions.
If a young employed member has nothing negative on their credit report, granting them a reasonable loan should be a manageable risk worth taking for credit unions looking to reach younger members. Helping us build credit is a great opportunity for credit unions to actually differentiate themselves and provide a service that Gen Y needs.
Watching the economy come crashing down around you, along with the retirement savings of our parents’ generation, is enough to make someone wonder how they can avoid this type of situation in the future. Broadly exposed to all the recent economic turmoil, young people are more aware of financial matters, and more interested in being fiscally responsible. Now is the time to lead with Gen Y messaging that demonstrates your credit union is here to help.
Facilitating Employment Options
We are in the midst of the toughest labor market in at least 25 years. According to a survey from the National Association of Colleges and Employers, Bethlehem, Pa., only 19.7 percent of 2009 graduates who applied for a job actually had one at the time of graduation. In comparison, 51 percent of graduates who applied for a job in 2007, and 26 percent of those graduating in 2008 had a job at the time of final exercises.
Try to put yourself in the shoes of a recent high school or college graduate peering into an abyss on the job openings front. Massive internet job search sites like Monster.com are popular, but often not particularly useful for someone trying to find employment in a specific local community. If your credit union could somehow address the pain and frustration people are feeling on the job front, it would not only resonate with young individuals, but your entire membership base as well.
Leverage SEG Relationships
Most credit unions have strong relationships and key contacts with employer groups, so why not leverage them in such a way that will benefit both institutions? Find out if any of your SEGs are planning to hire in the next few months, and if so, ask what types of positions they anticipate having available. You could compile a list of specific opportunities and post it on your site along with links to other local job resources on a ‘Local Employers Hiring’ area. Be sure to specifically denote any opportunities that might have openings for recent graduates.
Hire Gen Y
While payrolls have been shrinking across the country, the CU industry added employees each quarter over the past year. CUs grew the number of full-time employees by 2.1% in 2008. If your credit union is looking to hire in 2009, you have an opportunity to entice some top-notch recent graduates you might not have targeted in the past.
A great way to increase your Gen Y outreach is to hire young full time or part-time employees and interns for your credit union staff. You have much to gain by allowing them to get involved in youth-centric marketing discussions and planning. You could end up with some great insights directly from the demographic you are trying to reach, and they get to incorporate a creative element into their jobs - everybody wins.
Gen Y employees can also become natural activists for your credit union. Despite knowing very little about the credit union industry before starting my career at Callahan & Associates, I soon discovered that the transparent practices and common-sense values that credit unions exemplify naturally align with principles that Gen Yers can understand and respect. I know that I am inclined to tell my friends to investigate credit union options when I hear them complaining about their latest banks fees or that they are preparing to apply for a loan. Several studies have found that Gen Yers are very likely to turn to the advice of family and friends, so young employees can provide a powerful source of natural endorsement for your credit union.
If you successfully align your Gen Y outreach to address points of pain for younger individuals, you stand a much greater chance of gaining their attention in 2009, while also planting the seeds for deeper relationships going forward.