By Preetha PulusaniWhile there is plenty of talk and knowledge shared on marketing that appeals to millennials or how to reach Gen Z, it is hugely important that we not leave the baby boomer generation in the dust.
With a population of 76.4 million, the baby boomer generation is the nation’s second largest living generation. The oldest boomers are only in their mid-70s, and this generation is aging youthfully. In efforts to keep up with their grandkids, boomers are taking advantage of their disposable income to experience the adventures they put off during their working and child-rearing years. In addition, in most cases, people say they feel about 20 percent younger than they really are, according to a Michigan State University study of aging and age perception of more than 500,000 people. Older people usually say they feel younger than they are, and those who report feeling younger actually tend to live longer and healthier lives with less of a pattern of decline, according to the study.
But perhaps the most important statistic that financial institutions should think about is related to wealth. Millennials rule the U.S. workforce but they hold only 6.4 percent of U.S. wealth. That accounts for almost eight times less than the U.S. wealth than the 50 percent that baby boomers hold.
Keeping boomers as a key focus for customer engagement efforts should be a no brainer. What does that entail for financial institutions? Here are three key tips to follow:
1. Make it easy
With ages ranging from the mid-50s to mid-70s, many boomers are actively part of managing the finances of their adult children and aging parents in addition to their own. The good news is these interactions between generations encourage many boomers to be open to the advantages that technology can bring to their banking experience.
Seven in 10 boomers bank online at least once per week, and their use of mobile banking is growing exponentially as more and more of this generation utilize online banking, mobile check deposits, fund transfers and payments options each year. This means that banks have a prime opportunity to promote these financial services to a targeted group segment that will appreciate the simplicity and 24/7 access that online and mobile banking can bring.
Making it easy and making the entire digital experience a positive one goes a long way.
2. Make it secure
Over the last few years, the adoption of mobile banking tools for baby boomers has been on the rise but usage increased in response to the pandemic. Nearly 90 percent of baby boomers agreed that they will continue to use digital technology to make daily life easier once the COVID-19 pandemic is behind us. Most boomers are more than willing to adapt. However, the 2008 recession hit their wallets hard, causing skepticism in their trust for FIs and lingering suspicions about online banking exchanges.
Due to the fear of fraud or security breaches, baby boomers like the idea of security alerts attached to their accounts in conjunction with a local branch or representative that can be easily contacted. Transparent communication around all security efforts and protocols is a top priority for this demographic. One way to accomplish this is by interacting with targeted messages and services while they are already digitally engaged. Digital engagement is about more than cross selling products and services.
3. Don’t make ageist assumptions
A recent study discovered that 27 percent of pre-retirees plan to work part-time during retirement with no plan to stop working. A great depiction of this generation’s dedication to the work force and commitment to staying intellectually engaged, it is also a way to maintain additional income.
That extra disposable income means that products typically marketed to young adults can be an even better fit for the boomer generation. New car? Kitchen renovation? Dream vacation? Even small business loans are opportunities that baby boomers will be looking to their financial institution to help them navigate.
Today is truly the age of the customer—no pun intended. Customers have the power, and they ultimately will decide where to look for their next financial product or service. Banks that improve their understanding of their customer base will better serve and engage them and gain a true competitive edge. That goes double for this increasingly powerful demographic.
Identifying audience segments, from baby boomers to Gen Z, and going even further to understand microsegments in order to create comprehensive, custom communications that are relevant to each banking individual’s financial journey is a key to success. Engagement technology is more accessible than it has ever been. It’s also driven by more and better data insights and intelligence (including AI/ML), increased automation and efficiencies, and powerful performance analytics. Taking advantage of it today will have a tremendous impact on a bank’s ability to retain customers and increase revenue. In other words, it will have a great impact on an bank’s tomorrow.
Preetha Pulusani is the CEO of DeepTarget, a fintech company helping financial institutions grow. For more information, visit www.deeptarget.com.