10 Ways to Grow Millennial Loyalty
Many industries are grappling with how to build loyalty among millennials, but perhaps none face as many challenges as the financial industry does. With an addiction to mobile and digital services, a voracious appetite for rewards programs and strong aversion to fees, Gen Y has left many financial institutions scratching their heads.
As the industry tries to catch up to changing consumer demands, it's not surprising that an Accenture survey of more than 4,000 retail banking consumers in the United States and Canada showed 18% of millennials switching from their primary bank in the previous 12 months.
While millennials want innovative and convenient ways to manage their money, they are still concerned about the safety and soundness of their finances, and they need help finding the happy medium. Credit unions should seize this opportunity to step in as trusted financial advisors to this segment.
In order to create raving fans out of millennials, credit unions must prove that they offer services that can't be found more conveniently elsewhere, and that their technology meets millennials’ standards and keeps their money safe. This is especially important given Gen Y's propensity to select a recognizable brand name when it comes to banking; a BancVue study found 81% of millennials surveyed indicated a recognizable brand name is important, and 25% believe community institutions don't deliver the same level of benefits as their larger competitors.
To best overcome these preconceived notions, credit unions must proactively develop a thorough, strategic and integrated plan that covers four key areas: Engage, communicate, educate and mobilize.
Here are 10 things credit unions can do now to attract and retain a Gen Y membership base:
Approach segments differently: Create targeted acquisition and marketing campaigns based on specific millennial behaviors and life stages.
Incentivize loyalty and deeper relationships: Build robust loyalty and reward programs that provide Gen Y the cash back options they want. These programs are also important in ensuring the credit union's card product is top-of-wallet as millennials make the transition to digital wallets.
Cross-sell: Use interactions to promote services they might not even be aware of, such as digital and self-service channels. The Accenture study revealed 75% of shoppers under 30 are shopping for more than just a checking account – they also want a savings or money market account and 25% want a credit card.
Provide alerts to help them avoid missteps: Implement alert systems via text messaging and email that notify members when they are approaching an overdraft situation or bill payment deadline.
Leverage data to differentiate services: Use this data to provide critical information about their financial status.
Offer a variety of financial management tools: PFM technology is an increasingly effective selling point for millennials as they seek services that provide advice and guidance. Carry educational offerings through digital channels and into the branch experience.
Help them plan for the future: Provide services that enable them to maximize their assets as they accumulate them.
Blend technology and service delivery: Deliver a consolidated omnichannel solution where millennials can handle their immediate banking needs, while gaining an understanding of their financial picture.
Design product bundles: Pair services that deliver value and meet specific needs, such as convenience and on-time payments. These bundles should be built around transparent pricing, immediate funds availability, as well as linked offers and rewards.
Offer a comprehensive product set: Make sure that sought after products such as savings accounts, credit cards and prepaid cards are available and easy to find.
Deborah Matthews Phillips is managing director of payment strategy at Jack Henry & Associates. She can be reached at (972) 359-5163 or firstname.lastname@example.org.