If you're only targeting Baby Boomers or Generation Xers, your business could soon be in jeopardy. According to the US Census Bureau, Millennials have already surpassed the 70 million mark, and other research shows that figure to be closer to 80 million -- and that's just in the US.
Either way, the Millennial generation is now the largest in US history. And they're already proving to have incredible buying power.
Brands and sectors that have previously overlooked Millennials in not just their marketing strategy, but also how they develop their products and services, will need to pivot quickly if they want to survive. So how do you gain loyalty among this group, particularly if you've grown accustomed to catering to Baby Boomers and Gen Xers?
Tapping the shift in buying power
Think about the age bracket of Millennials-- they range from young 20-somethings to almost 40-somethings. Contrary to their reputation as lacking in work ethic, these people have jobs, and they're making good money.
As a result, they're interested in purchasing homes, paying off student loans, and saving for the future. They also have a combined spending power of approximately $600 billion per year.
Millennials are the first digital natives, and as such, have seen change occur rapidly over the course of their lifetimes largely due to the speed of innovation. This has become somewhat of a wake-up call for industries that have been locked into traditional ways of doing things. For instance, the financial industry has had to rethink their approach to banking, credit, and lending to meet the needs of this unique generation.
Navigating a disappearing comfort zone
Still, many lending companies and credit unions are struggling to target Millennials effectively. Why?
It could be due to a false sense of comfort. Lending companies and credit unions understand Baby Boomers-- they've been dealing with that generation for years. They know how to advertise to Boomers, and they understand what they want.
Millennials do things completely different. They're getting married later in life, purchasing homes later, and they're more interested in the sharing economy than owning high-ticket items like vehicles. They've also grown accustomed to convenience and a more personalized experience thanks to apps and services like Grubhub, Amazon's Prime Now, Uber, Lyft and the list goes on also want convenience and a personalized experience.
Getting to know them
As more fintechs enter the financial space, financial institutions like credit unions will need to work to understand what their Millennial customers want, need, and desire. The only way to do that is through market research and getting out there and talking to them.
What do they care about? What are they concerned about now and in the future? How, when, and where do they prefer to do their banking?
A deeper knowledge of this market sector can help you develop the customer loyalty you need to build long-term client relationships. And that's one area where credit unions and locally owned banks can really stand to win -- offering a true personalized experience and a sense of community.
Millennials are largely driven by having a sense of purpose and place. According to an article by Gabrielle Frank for Today.com, Millennials tend to prioritize time spent with friends and family rather than earning a premium salary -- though many of them do make good money.
Derek Flanzraich, founder, and CEO of Greatist also said Millennials, "define success in a different way. This idea that happiness is the outcome as opposed to wealth is a profound shift."
The sense of purpose often carries over into their shopping and borrowing habits. Millennials value businesses or institutions with a greater purpose or broader goals that benefit the local economy or the world -- and that's one thing credit unions do well.
Creating meaningful experiences
Happiness, purpose, and intention is important to Millennials. They want to affiliate with groups and brands that have a greater purpose than just profits.
They also prize a great customer experience more highly than saving money. A rewards program or member loyalty program can't be solely about discounts.
In her article on ChiefMarketer.com, Kelli Haemmelmann said, "Whether online, through a mobile app, or in-store, brands can reinforce Millennial loyalty with a program that keeps them looped into the brand experience."
Millennials enjoy getting to know about programs or offers before anyone else. They like exclusivity, special treatment, and personalized attention. Give them a unique, pleasant experience, and help them connect to your deeper purpose, and they'll come back for more.
This generation also prefers to research products or offerings on their own first, and they want to be engaged via their preferred online channels. To secure their loyalty, think about your online and mobile presence. Is it a pleasant experience?
Does it provide answers to all of the questions they might have? Are there resources to support them in their fact finding and decision making?
If a program, offering, or website is too complex, too slow, or too difficult to use, Millennials will simply leave. They want their technology fast, streamlined, and intuitive. Through chatbots, artificial intelligence, and automation, companies can give Millennials their privacy and space while still being ready to seamlessly engage at a moment's notice.
Reviews are also important to Millennials. Make sure you're monitoring reviews and comments --good and bad-- across your Google Business listing, Facebook page, Twitter account, and so forth. It will demonstrate you're actively engaged and care.
Catching Millennials' attention is one thing; maintaining that attention and transforming it into customer loyalty is much more difficult. Prioritize worthwhile information over clickbait, and focus on a frictionless customer experience rather than promotional gimmicks. With consistent dedication to quality service and flexible multi-channel solutions, your financial institution can capture the hearts of a new generation of borrowers and investors.