In their earliest years, the post-World War II baby boom generation were characterized as spoiled television-hypnotized consumption machines. As young adults they were often nonconformists-hippies, yippies, yuppies or preppies-who rejected or redefined traditional values. These baby boomers were associated with privilege and grew older during an extended time of affluence. The unprecedented size (76 million strong) of the baby boomer demographic bulge remodeled society as it passed through its lifecycle-often referred to as the "pig in the python." In 2010, nearly 40 million of these baby boomers are now called something else-credit union members.
Although the demographics will vary at each credit union, research suggests that over 40% of members typically are baby boomers between the ages of 46 and 64 years old. The average age of a credit union member is nearly 50 and growing older each year. These baby boomers now have a more seasoned take on life garnered through their experiences from parenting, from careers, from economic cycles and from societal shifts. But baby boomers will have to be dragged kicking and screaming into old age and retirement, since most believe that 60 years old is the new 40. And even if they were ready and willing to retire, many of them can't afford it.
These baby boomers are also facing the sober reality that Social Security, Medicare and other government-provided entitlements aren't mathematically sustainable.
Getting baby boomers to cheerfully relinquish their expected entitlements or embrace new taxes seems an unrealistic expectation.
A credit union's first step in coming to grips with this evolving baby boomer strategic scenario is to recognize that these 40 million members remain a diverse and unconventional group that is unlikely to fit the patterns of its predecessor cohorts. The traditional financial services lifecycle of initially being a net borrower, then being a net saver, followed by being primarily a net investor will be stood on its head. The baby boomers programmed their financial services lifecycle on random play mode and are expected to borrow, save and invest in whatever order their changing circumstances dictate. As an illustration, the need for new careers following the dramatic downsizing of so many industries and professions is certain to generate a wave of still-energetic baby boomer entrepreneurs seeking small business start-up loans.
Although many readily adaptable baby boomers can be found on cutting edge social networks and have otherwise integrated the Internet into their daily lives, they are unlikely to be motivated by the same e-savvy marketing appeals that enthuse either Generation X or Gen Y. Additionally, many baby boomers have embraced self-service delivery systems like debit and credit cards, ATMs, I-banking and even mobile wireless services, but they also still want a convenient branch with a drive-thru staffed with live humans, even humans decades younger than they are. On the other hand, older baby boomers will be reluctant to follow investment advice given by a twenty-something. Since they are already loyal long-time credit union members, they don't need to be sold on the institution's brand value, but they still respond to customer-centered cross selling, especially for products and services that resonate with each baby boomer's specific situation, hopes and dreams.zAre credit unions prepared to serve large numbers of retirement-challenged 60-, 70- and 80 year-old members who are still working, borrowing and juggling unconventional income streams? These baby boomers are not strangers just now showing up at the front door with hat in hand, they are the credit union's existing members, the same ones who contributed to the member-owned financial institution's historic growth and success. How can credit unions step up and continue to serve the financial services wants and needs of these existing long-time members? Finding answers to these compelling questions is of the utmost strategic importance for a credit union that might otherwise implode from the demographic pressure of its aging baby boomer membership. Credit unions that are shifting focus to court hard-to-convince younger potential members are missing some low hanging fruit: the longer living, still working baby boomer current members that will continue to be an unconventionally good market for many decades to come.
Marvin Umholtz is president/CEO of Umholtz Strategic Planning and Consulting Services.
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