Sometimes it seems like the same story, just a different day. Financial institutions aren’t getting younger. The average age of members or customers is mid 40s. Is there anything left to say on the topic? Yes – if you want to capture the business of the most affluent and populous generation to date.
Generation Y – also called Millennials – accounts for $1.3 trillion of consumer spending, according to an article at Barrons.com. That’s 21 percent of all consumer spending. By 2017, Millennials are expected to outspend Baby Boomers. Financial institutions need to capture this generation now. Here are three reasons they are failing.
1. Purchasing Influence
Online reviews on company websites are one of the most compelling factors leading to a purchase decision for younger people. They are looking for the number and quality of reviews posted, and they don’t want to see all perfect reviews. They want honest feedback on whatever they are looking to purchase. Go a step further and give them the opportunity to comment on reviews they read.
2. Technology Innovation and Collaboration
If your goal is to attract new, young members, you must adopt new technology and work with Gen Y consumers to develop apps and programs they want. Virtual Wallet is a financial service that has succeeded at this very area. Marketed as “an entirely new approach, designed to make life easier and transform the way you spend, save and grow your money,” Virtual Wallet opens 6,000 accounts a week for people ages 18 to 34. Like many services that appeal to this generation, Virtual Wallet gets better with every upgrade, because it uses the feedback it gets from online reviews to continue giving consumers the features they want. Successful financial institutions should be in constant communication with their young members and developing the technology that supports a lifestyle, not just a bank account.
3. The Generation Box
When we talk about generations, we sometimes want to put them in a nice neat package. It’s important to remember that these are still people. Gen Y in particular is a generation of people who want personal treatment.
Be sure to look at age groups and opportunities instead of just seeing generations. For example, the 18 to 25-year-old demographic represents an enormous opportunity for marketing life events. You have high school, college, graduations, marriages and major first purchases like cars and houses. The way you sell these to Gen Y is to be genuine. Make them feel special. Don’t sell a product or service. Sell a lifestyle or a dream.
Read my monthly e-newsletter for more in-depth information on three reasons why financial institutions aren’t getting younger. The newsletter includes tips and discussion from two Generation Y experts.