What Are Members' Money Motivators?
Money matters have an emotional component for consumers.
Dear Old Dad and I visited Grandma in the assisted living apartments recently.
Grandma is 97, opinionated, and tough as nails. Sometimes, her “meddlesome” caregivers are bossy and question the contents of her refrigerator, Grandma says, but we know they interact with her in ways she appreciates while protecting her dignity and keeping things in order.
Grandma was found unexpectedly sitting on the floor recently. The staff said she lost her balance and fell, but Grandma stubbornly says she was looking at family pictures and sat on the floor of her own volition.
It is hard for Grandma to admit she needs help. But the staff understands how to maintain her dignity and self-esteem while they offer personalized care. Grandma responds well to sass, and they tailor their communications to suit.
Money matters also have an emotional component for consumers. It may be that some of your members have financial issues that are difficult to discuss.
Understanding their money motivators will allow you to meet not only consumers’ financial needs but perhaps emotional ones as well. Credit unions deliver quality services that, for some, may protect self-esteem, enable good future decision making, and grow confidence. You might even cement relationships with increased loyalty in the process.
What do they think about money?
“Psychology Matters,” according to Rick Kahler, financial planner and founder of the Financial Therapy Association. He claims consumers need to understand their money beliefs in order to have a healthy relationship with money because “80% of money decisions are made emotionally.”
Kahler has identified “Seven Deadly Money Disorders,” which include anorexic spending—an inability to spend available funds on basic necessities; financial enabling—giving money to others, which prevents people from addressing their own issues; and risk aversion—when consumers fail to recognize the benefits of prudent long- term financial risk. A video link further examines the importance of understanding the emotions behind money habits.
“Women Don’t Ask” for more money on the job, which may account for the disparity in their earnings compared to those of men: “77 cents for every dollar” says a Boston College Squared Away blog post.
Researcher Lisa Barron claims women “feel less comfortable in salary negotiations and tend to ask for less.” Also, “What this really is about is this whole concept of thinking of yourself in terms of monetary worth.”
Seventy percent of men in Barron’s survey “felt entitled to earn more than others, while 71% of women’s remarks showed they felt they should earn the same as everyone else.”
“Overconfidence Linked to Senior Fraud” says Boston College. “The seniors who are most confident of their knowledge about money and investments are also the most likely to fall victim to fraud. Declining cognition is associated with lower financial literacy…the concern is that seniors do not recognize the problem.”
This makes seniors particularly vulnerable to scams and financial abuse.
“People make more rational economic decisions on behalf of strangers and distant relatives than they do for close family members or themselves, new psychology research has shown,” according to a study reported in Science Daily.
The study focused on participants’ ability to engage in delayed gratification with money, concluding “The closer the decision maker is to the imagined beneficiary, the less rational their decisions were.”
This study is significant as the first to indicate the identity of third parties “in relation to the decision maker is a crucial consideration.”
What opinions and beliefs about money and self-worth do your members hold? How do emotions impact their financial choices? Will understanding of these thoughts change how you attempt to meet their financial needs?
Many variables come in to play as consumers make buying decisions. Here find “20 Stats about How Social Media Influences Purchasing Decisions” as reported by Marketing Cloud.
Among the influences of social media:
Meet members’ needs through social media
Your members may prefer to interact with you through social media channels. Perhaps you can tailor your communications to meet specific needs they express there.
Social media comes of age, according to Nielsen in “State of the Media: The Social Media Report 2012.” This report reveals social media user habits and indicates ways consumers like to engage in “social care,” or customer service through social media channels.
Reportedly, “47% of social media users engage in social care.” Popular channels used to access social care include Facebook, company blogs, Twitter, and YouTube.
In turn, companies are responding to consumers’ desires to interact via social media, as outlined in “Social Media, Online Video Driving Ad Spend Growth.”
Consider that your members might want to hear from you through these communication methods as “Internet advertising, forecast to overtake newspapers for the first time in 2013, will likely exceed the combined total of newspaper and magazine advertising by 2015” and “video formats overall…are increasing their share of global spend, from 41.5% in 2010 to 42.6% in 2015.”
Appreciating how emotions motivate certain financial behaviors may help credit unions not only provide needed services, but also meet members’ psychological needs.
Know what makes your members tick, and communicate with them in ways they will appreciate.