Baby Boomers were once the ultimate buyer, and the target market of banks and CUs, as well as industries across the board. Now, a new generation is soon to be the biggest player in the market: Millennials. This generation will become the largest group of first time home buyers, and by the year 2020, they will control $7 trillion of U.S. assets. Among all the generations, there is the biggest gap between Boomers and Millennials as their values, habits, and interests are very different. This has spurred a lot of change for businesses, as they need to adjust several facets of their operations to fit the needs of this new generation. It has reached the point where this change is inevitable, and those who ignore the needs of Millennials will lose out to the competition. Here’s how you can redesign your credit union to fit the needs of the ever elusive Millennial member.
First and foremost, and of no surprise, digital is key. There have been countless studies that confirm Millennials and Gen Z prefer digital in almost everything they do. They find answers to their problems online and will go to great lengths to solve them on their own. They don’t enjoy interacting with salespeople or staff, so digital is their greatest tool in order to get the information they need… without actually talking to anyone.
For credit unions, this is a big shift. CUs were founded for the chatty Baby Boomers who yearned for more personal interaction with their financial institution. This has contributed to the lack of digital solutions in the financial industry. According to a study by PwC, only 25% of banking products are available online, and those that are can be difficult to find and far from user-friendly. To attract Millennials, this needs to change. Mobile apps are a great place to start, as they are a convenient one-stop shop for a majority of the services a member needs on a day-to-day basis.
Aesthetically pleasing visuals greatly influence the actions of younger generations. Baby boomers are used to conducting business on the phone, or in person, so they are driven by what they hear. Largely due to advances in technology, Millennials need to see it to believe it. As Millennials turn to apps, websites and other digital tools for information, they need to be functional, and visually appealing too. Even if a site operates seamlessly and incorporates features that these members want, like chat and online loan and member applications, they are easily spooked by outdated, clunky web sites. Investing in aesthetics is important, as it will make or break first impressions. A clean, efficient site with digital banking features will definitely help win over Millennials.
Social media has no doubt influenced the Millennials perception of privacy. Everything on social media is public knowledge, and younger generations are not shy to share even their most personal thoughts and opinions. According to a Salesforce study, 61% of Millennials agreed that they do not mind sharing their personal information with businesses in order to make a product or service interaction more personalized. 58% of that group would also share this information to get more accurate recommendations for products and services related to their interests. Conversely, only 41% of Baby Boomers are willing to share that same level of personal information. When cultivating a Millennial-focused credit union, information is key… ask and they will answer.
With younger generations, loyalty alone will not ensure member retention. Unlike older generations, brand loyalty has little effect on their actions. Millennials are happy to jump ship to competitors if they will receive better rates and services: a Kasasa study revealed that 82% of Millennials would change banks, and 83% of them would go to competitors who offer more favorable options. A whopping 65% of users would also switch to a more convenient mobile app. Their cause for switching could be as small as one negative social media interaction, so it’s important to lead with authenticity both online and in-branch.
Millennials and Gen Z are more socially conscious than previous generations, and they are not only looking for a credit union who can provide the best rates and services, but CUs that are environmentally responsible and involved in their community. According to a survey by Barkley, more than 50% of Millennials make an effort to buy products from companies that support the causes they care about. However, they are not looking for empty promises. They are looking for follow through as well. Especially with social media and technology, they are able to see which credit unions are actually committed to their claims, and those that are simply blasting marketing campaigns without any intention of putting them into action. While being socially conscious will help to attract Millennials, don’t put out claims if your credit union is not equipped to follow through on the promise.
Experience and Service
Member service and experience are extraordinarily important to Millennials. Whether online or in-branch, it’s important to create a unique and meaningful experience. This ties back into aesthetics and transparency because they want their experience to be modern and personal. An outdated website and branch design is as much of a turn off as generic, cookie-cutter solutions.
Service is at the epicenter of Millennials’ needs. Their standards for service is high and they expect quality service not only in banking, but at their local coffee shop, when online shopping, and in virtually everything they do. While they are not driven by loyalty, they are driven by service. They expect quality service with digital banking as well as in person. In fact, Edison Research found that 64 percent of Millennials believe social media is an effective channel for customer service, and 42 percent expect a response from online inquiries within 60 minutes. When dealing with Millennials in a member service capacity, address them quickly and lead with honesty -- they want things fast, and they want it done right.
Millennials can be a tricky audience to capture, especially for CUs used to catering to a completely different audience. While it takes some upfront work to acquire their attention and meet their needs, they will be a group of great value for your CU. After all, they are quickly becoming the most influential generation, and financial institutions can not afford to ignore this cohort. It is vital to implement new technologies and meet the demands of the digital-minded member with a comprehensive strategy that encompasses the laundry list of items that Millennials want, otherwise, you can expect them to move right along to a better alternative.