By Walt Albro
Successfully marketing to millennials may seem like a complicated headache. But, actually, it’s easy—as long as you follow a few basic principles.
Is it important to market to millennials? Yes, says Ryan. For one thing, there are a lot of them. They are the largest generational cohort in U.S. history—there are more than 75 million of them—more even than there were in the baby boomer generation.
“They have a lot of money to spend,” notes Ryan. By 2017, they will start to hit their financial prime, spending at least $200 billion a year.
The popular conceptions that millennials are entitled, low on cash and can’t find a job are not representative of the group as a whole. “They are far from a homogenous group,” says Ryan. Millennials come in a variety of ages—currently from 22 to 35—and a variety of life stages. You can’t just market to all millennials as if they were one big cohesive group. When it comes to millennials, your marketing needs to be much more targeted than it was with older consumers.
Millennials have more products than customers of any other generation—three or four per person. Yet, they are much more prone to switching banks. “They are happy to switch if they are not happy with your fees,” says Ryan.
If you expect to market to millennials, you first must understand them and their attitudes and behaviors. A few common characteristics:
- They expect technology. Millennials grew up with the Internet, social media and smart phone. “These are digital darlings,” Ryan explains. “They expect that the technology will simply be there.” They spend 35 hours a week on digital channels—the equivalent of a full-time work week—which is 50 percent more than all other generations combined.
- They view smart phones as standard. They use them constantly to show off where they have been, where are now and where they are going to be in the future. They check in and update photos and their status. “Its how they plan, learn, explore and socialize,” says Ryan. “It’s how they bank.” Millennials who are not mobile, use plastic rather than cash. They usually carry less than $5 in cash in their wallets.
- They trust each other and their families—but not banks. They grew up during the Great Recession and they have no nostalgic attachment to traditional banks.
- They feel more comfortable with institutions that share their values. When making a purchase decision, 87 percent will investigate what your bank stands for before acting. They will go to your website and look at your corporate responsibility statement as well as your financials. They will look at what you are posting on social media. Like investors, they will pore over your “about us” page. “They want to know what they are signing up for,” says Ryan.
- They think that all banks are the same. Slightly more than half think that banks are a commodity.
- They are optimistic about their economic outlook and financial future. Many expect to stockpile large retirement savings or to retire at age 55.
- Despite their financial optimism, they recognize that they need financial advice. Sixty percent say that they want a relationship with a bank. But they do not want a traditional relationship. They want one that is digital, high-tech and high-touch.
- They want mobile apps. But, they want apps that are more sophisticated than those that only check balances or transfer funds between accounts. They expect “awesome” apps with all the bells and whistles. (Ninety-four percent do their banking on mobile, not desktop. “If you have to invest your money anywhere, invest in mobile apps, not desktop,” advises Ryan.)
- They want the bank to pro-actively offer products and services that will help them live better. They also want the bank to help with financial planning, such as providing tools to create and manage budgets.
Today, many bank communications to millennials are not working, Ryan notes. In many cases, millennials are not engaging or connecting. So, what is the best way for banks to start conversations with millennials?
A few simple suggestions:
- Identify their emotionally significant life events: such as when they graduate from school, get their first job, get married, move into an apartment, buy their first house and so forth. There may be a lot of help, assistance and guidance that banks can provide during these important periods.Let’s say, for example, two millennials are planning to get married. For them to achieve a conventional dream wedding, they are required to do a lot of complicated planning, budgeting, coordinating and managing that extends over periods of up to a year or more. This is a great opportunity for the bank to catch the attention of the millennials by offering them advice and assistance. The bank could, for instance, offer such things as a wedding planning kit, a wedding planning app, a partnership with local vendors who offer wedding-related services, rewards or discounts for millennials who use the bank’s partners. In additional to offering such financial services as a personal loan, the bank could provide a virtual wallet, mobile bill payment, etc. In connection with the honeymoon alone, imagine the peace of mind the couple would gain from such financial services as travel insurance, foreign currency exchange, and protection against credit card and identity theft, etc.
- Connect with them emotionally through these special life events. Banks should look through their portfolio of products and services and figure out which products and services would be needed by their millennial customers during a significant life event such as a wedding—and also ways that the bank could help them manage each of these stressful events. “If you do that, they are going to come back to you,” Ryan says.
- Empower your employees to have conversations with millennial customers and to get to know them better. Millennials are not interested in being “sold to.” However, they will converse with you if you speak to them with authenticity. Encourage your employees to have real conversations—not scripted talks—with millennial customers. This will help the bank to learn what millennials need and assist the bank in a continuing effort to hone and optimize the products and services targeted at millennials.
- Meet millennials where they are at. Every communication should be personalized. Email communications should be segmented both by age and by categories you have developed based on trends identified by data you have collected about your customers. Social media should contain advice and resources that millennials can use to do better financial planning. But your messages should not be self-promotion. Communications should focus on the needs of millennials. Advertising should also center on their needs, reminding them that the bank is there to assist them during their emotionally significant moments. If you take this approach, you will capture their attention. “They will actually be interested in listening to you,” Ryan says.Again, the best way to gain sales with millennials is to connect with them through their needs—especially the multiple needs they have during emotionally significant life events. “Your messaging should be about how the bank is helping them to solve their needs,” says Ryan.
Once the bank understands the needs of its millennial customers, then the bank has a chance to figure out what it can offer that will capture their attention.
Anne Ryan is senior brand strategist for Brownstein Group Inc., Philadelphia.