SAN FRANCISCO (7/3/14)--With seemingly infinite competition for the attention of young consumers, it's not a surprise a credit union marketing expert who presented strategies Wednesday on how credit unions can attract younger generations led off his discussion with a stark message.
There is no magic pill that will miraculously make your credit union attract younger members.
"I don't have that," said Tim McAlpine, who heads the Canadian marketing company Currency, during his breakout session at the Credit Union National Association's 2014 America's Credit Union Conference.
McAlpine said that even though it is not always easy to chart a marketing course to attract younger consumers, the reasons to do so are compelling. Generations Y and Z, or those born after 1980, make up more than half the U.S. population, making it crucial for credit unions to appeal to them.
Further, credit unions in particular must be mindful of these youthful demographics, as the average age of a credit union member continues to climb. In the United States it has reached 48, which is nearly 10 years older than the North American average.
"This should be a major concern," the marketer said.
McAlpine also discredited the assertion that less effort should be expended marketing to young people because they don't have any money.
While that may or may not be true now, a massive transfer of wealth from Baby Boomers and older generations to their children is on the horizon, he said. An amount of money some estimate could total $40 trillion over the next 30 years is about to change hands and studies show it will be searching for a new home.
McAlpine said that after receiving inheritances, 98% of people transfer to a new financial institution, a fact that essentially puts the $40 trillion in play over the next few decades.
Another reason McAlpine offered for credit unions to get into the young-person game was to beat back the mega-banks who are "swallowing" the market.
"The absolute dominance of the top 100 banks is the real elephant in the room," McAlpine said. "So while credit union market share has increased slightly over the last 20 years, the community bank share has dropped by nearly two-thirds, literally being swallowed by the big banks."