Over the next few decades, an estimated $30 trillion will pass from baby boomers to millennials, according to Accenture.
As the roughly 75-million strong millennial generation accumulates wealth and leads increasingly complex financial lives, credit unions will see more opportunities to engage this demographic and meet their financial needs.
Millennials’ major life experiences were shaped by the Great Recession of 2008. They witnessed record-high unemployment levels, and parents losing their jobs, savings, and investments, in addition to their own financial challenges.
They are managing more student debt and faced higher unemployment than any generation since the Great Depression. Still, their financial goals are not drastically different from those of baby boomers when they were in their 20s and 30s.
In other words, owning a home, saving for retirement and raising a family continue to be defining factors for financial success. The key differences between millennials and baby boomers are their technology dependence and the communication tools used to satisfy their needs.
However, the Millennial Disruption Index reveals that 71% of millennials would rather go to the dentist than listen to advice from financial institutions, making it challenging to reach this segment of consumers.
This disconnect could be attributed to the financial industry’s slowness to regain millennials’ trust, reluctance to adapt to new technologies, and lack of ability to help this generation achieve its financial goals.
To capitalize on opportunities with millennials, credit unions must recognize that this audience expects targeted communication and offers to be presented through their preferred channels at the right time.
To accomplish this, credit unions must leverage one of their most valuable assets: Data, combined with omni-channel marketing communications technology.
With a well-executed data analytics strategy, credit unions can develop more effective marketing and communications programs and measure the program’s true return on investment to continuously improve millennial engagement.
Yet most credit unions are challenged with using data successfully because their data is often housed in disparate databases and spreadsheets across various systems and business lines. Without the right technology, it is nearly impossible to locate and analyze accurate, relevant information, gain insights and develop a strategy.
To address this, credit unions need to evaluate and implement a business intelligence system capable of data aggregation from multiple, disparate databases and spreadsheets, including the ability to append market data such as demographics, business-graphics, and agri-graphics to gather insights about its members and markets.
The next steps are to design a strategy and make the insights available across the entire organization. This will give employees the visibility needed to tackle marketing initiatives and implement an omni-channel solution to provide a consistent member experience across all channels.
In doing so, credit unions can strengthen their knowledge of millennial members and develop marketing/communications programs that are closely aligned with those members’ needs.
For example, credit unions can review data from a millennial member’s spending profile and recognize patterns, such as the recent purchase of major appliances. This could indicate that this member is a good candidate for an increased line of credit, a home equity loan, or a second mortgage loan.
Without data, it would be incredibly difficult to identify this opportunity, let alone act on it.
Automated marketing tools are also crucial for engaging Millennials and fostering lasting member relationships. Although data analytics can help credit union employees identify who to reach and how, communicating the relevant information to the appropriate members via the correct channel can be complex.
By using omni-channel marketing/communications tools, credit unions can manage the difficulty of leveraging multiple channels simultaneously, while ensuring messages reach the targeted audience through their preferred channel, whether mobile, web or email.
This is particularly important because marketing to millennials is about nurturing relationships rather than simply reaching an audience, as a single message is not likely to result in a sale and each message is not heard or read every time.
Demonstrating to millennials that their needs are understood is ultimately about marketing to the right person, at the right time, with the right message and through the right channel. This can be achieved with a well-executed data analytics strategy and omni-channel marketing tools.
Credit unions must harness the power of data—their greatest asset—to take a more modern approach to marketing and cultivate lasting relationships with the largest generation in U.S. history: Millennials.
NASEER NASIM is president/CEO of Baker Hill.