How To Better Serve Younger Members

Takeaways from Empower U 2016, as well as how one credit union lowered its average member age.

 
 

The average American is 37 years old. The average age of a credit union member is slowly sneaking toward 50 — whereas in 1985 it was 40. So while roughly one-third of the U.S. population belongs to a credit union, older generations are more likely than younger ones to use these not-for-profit cooperatives.

There’s likely no one silver bullet to reverse this trend; rather, a credit union must focus on developing a holistic suite of products and services available to fill young members' needs when the time is right.

One such product? Student loans.

During the first day of Credit Union Student Choice’s Empower U 2016 — a Washington, DC-based conference focused on the role credit unions can play in higher education financing — the value and opportunity in credit union student lending were well defined. Student loans can introduce a young member to a credit union, potentially creating a life-long member in the process.

“It’s not about giving someone a student loan,” says Dustin Limburg, Student Choice’s director of marketing, “it’s about creating a valuable relationship.”

Limburg’s presentation focused on the best practices of marketing student loans, the most important piece of which, according to Limburg, is to know the financial aid calendar.

FAFSA deadlines vary by state, though the federal deadline is the end of June and most borrowers plan well in advance of that date. Students often receive scholarships and other awards in April, while fall and spring semester tuition becomes a point of attention for borrowers in late summer and early winter, respectively.

Knowing this calendar helps a credit union better plan its marketing outreach. For example, the market for undergrad student loans heats up in the summer months — so much so that for the other nine months in the year Limburg suggests marketing specifically to post-grads with student loan refinancing and then hitting undergrads hard in the summer.

That doesn’t mean credit unions should not engage with undergraduates for nine months. Rather, credit unions can focus on creating educational content to position itself as a trustworthy and reliable resource until the time comes to more actively and aggressively market.

One credit union that found success in reimaging its student loan marketing is Northern Credit Union ($227.9M, Watertown, NY). Alexa Bennett, marketing manager at the upstate New York cooperative, presented her institution’s experience with student lending.

The credit union’s marketing department of three decided to change the target of their student loan marketing campaigns, away from students and toward high school guidance counselors and parents or guardians.

“They push younger millennials to apply,” she said during her presentation.

In addition, Northern has seen success with a scholarship it runs in-house. Each October, students apply to be one of five awarded with $2,000. Winners are announced in April and last year, according to Bennett, the credit union received 77 applications, a high mark Bennett says stems from the credit union’s new marketing targets.

Northern also bundled its many young adult products into what it calls its NEXT program. Including student loans, the program runs the gamut of products including both checking and savings accounts, auto loans, micro lines of credit, and a Visa debit card, among others.

The program is separately branded from Northern, and thus far the results have been strong. Two demographics now make up the majority of the credit union’s membership: members from 16-36 and 51-70 years old each make up 31% of the institution’s total membership, and the average age of a credit union member has dropped to 45.

Follow Liz Furman, Michelle Parker, and myself on Twitter as we live tweet day two of the Empower U conference, and check back in with CreditUnions.com to see even more coverage of the two-day event at the Mayflower Hotel in Washington, DC.