ST. LOUIS — When it comes to Gen X and Gen Y, just being their primary financial institution is not the automatic "score" it once was.
The old expectation that it is too much of a hassle to switch doesn't hold true for these young consumers.
According to a recent Maritz survey, 61% of Gen Y and 53% of Gen X have considered changing or actually have changed their primary financial institutions in the past two years, compared to 37% of baby boomers.
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"For the most part, the current customer experience model at banks caters to the silent generation and boomers, who more frequently bank in-person at branches. But, younger generation customers are much more mobile and rely more heavily on online interactions," said Thad Peterson, division vice president, sector strategy and solutions for Maritz' financial services sector.
In general, the survey results showed that younger people can be more impatient, less tolerant and just plain harder to please. The survey, which looked at customer satisfaction and loyalty among retail banks, found that younger customers also are more likely than older customers to find fault or have problems with their primary banking institutions. Eighteen percent of Gen Y and 17% of Gen X reported being upset about a lack of ATM locations; 22% of Gen Y and 21% for Gen X were upset in the past year about high fees; and 37% of Gen Y and 36% of Gen X believe they would get better customer service at a different financial institution.
Peterson said financial institutions interested in building long-term relationships with Gen Y and Gen X need to expand the definition of convenience beyond just location to include online and mobile convenience; identify and offer products and services that they want and need; and treat them the way they want to be treated, ensuring the experience is consistent across all touch points.
As for entry via the promised land of social media, Peterson cautioned against being dragged into the hype, especially as a way to initially reach younger consumers.
"Using Facebook to attract new customers is like standing in a corner passing out business cards at a cocktail party," said Peterson. "If you don't have a genuine relationship with them, all you are going to accomplish is to diminish the value of your brand to that individual."
How to Build Loyalty
Tips to building more loyalty among Gen X and Gen Y:
- Be the source for their first primary debit card–Gen X and Y are the debit card generations.
- Provide incentives to migrate to online banking with a significant reward for paying bills online.
- Make sure front-line employees are treating Gen X and Y the way they want to be treated and can solve problems on the spot–a key to securing lifelong patrons.
- Stay in tune with how younger customers want to connect–online banking, bill pay and mobile banking are three customer touch points that must be state-of-the-art and part of every financial institution's overall customer experience.
Source: Thad Peterson, division vice president, sector strategy and solutions for Maritz' financial services sector.
TREND ALERT: HEAT MAPS
The volatile nature of the housing market has promoted the popularity of heat mapping, in which data values are presented as color, like temperatures on a weather map. The visual nature of heat map data makes it more user friendly, especially to Gen X and Y, said hotpads.com co-founder Douglas Pope, who draws 1 million users to his Web site each month. Heat maps aren't just for kids. The charts are so effective at communicating volatile data, NASDAQ uses them to show NASDAQ-100 index volatility.
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