Marketing to Gen Y: Banks have their work cut out for them
There is a new generation of consumers entering the world as young adults and they are looking for a financial institution that fits their needs. However, this generation is vastly different than the generations that preceded it, therefore the marketing tactics and messages that the Baby Boomers and Generation X reacted to will not have the same effect on this group. They are Generation Y, those born after 1982, and “they look at the world through much more leery eyes,” said Rich Weissman, president and CEO of DMA. Why is this? They are a generation that has seen a lot of turmoil, not just in the world, but in their own backyard. They have seen such tragedies as Columbine and 9/11, and such corporate scandals as Enron and Bernie Madoff, just to name a few.
What does this have to do with banks and how they market to this audience? Generation Y has a general distrust of corporations and the messages that they produce and distribute on their own. They are most likely to seek financial advice from family and friends as opposed to online. What’s more important to them than a flashy advertisement, is a message they can relate to: enter the young and free movement. Young and Free is a North American credit union movement designed to give Gen Yers insight, education and a voice in their financial institutions. Credit unions involved in the program hire a Gen Y spokesperson, someone in their early to mid twenties, to represent the credit union and essentially speak the language of the demographic they are targeting. The Young and Free website offers videos on debt, shopping, retirement, student loans and various other topics facing young people entering the working world for the first time and more importantly, taking ownership of their finances. There are currently about 9 credit unions involved in the program, all the way from Alberta to Alabama.
Another financial institution that is thinking outside the box to target Gen Y is First National Bank of Omaha with their Pay Yourself First Challenge. The program focuses on teaching young adults to pay themselves before paying their phone bills, their mortgage, etc. This concept, which has been preached by financial gurus for years, was molded into a competition by FNBO who selected 5 unique contestants who saved and blogged about their experience over the course of 6 months. At the end of the challenge, one winner was selected based on their savings and was then awarded additional prize money from FNBO.
Above all, Gen Y is looking for a genuine message involving products and services that cater to their needs, not those of their parents or grandparents. They are a tech-savvy, on-the-go group who wants access to everything, finances included, at a moment’s notice. Technology- specifically online banking and mobile apps specifically- are a MUST for any financial institutions hoping to target Gen Y. Gen Y is more educated than the generations before them, and as a result, is smart enough to shop around, understand pricing/fees and see through traditional gimmicks.
How will your financial institution approach the challenge of marketing to Gen Y?
Meagan Southmayd is an Account Coordinator at Griffin York & Krause.