What has more than 160 million legs and the power to change American culture? The baby boomers, that's who. Almost eighty million strong, the boomers (born between 1945 and 1965) are the largest single generation in American history, and they are leaving their mark on every facet of culture. They are the most powerful demographic group of Americans in terms of their influence and buying power in this country. They control the marketplace in lifestyle and leisure spending, health care, real estate, finance and technology.
And, it is estimated that they stand to inherit $10 trillion to $13 trillion dollars in the next decade. This will be the largest intergenerational transfer of wealth in the history of humankind. They will be redefining aging and retirement. Research is showing that only one-third of boomers have adequately planned for their golden years. Over 10,000 baby boomers retire every 24 hours, and many will be engaged in a phased retirement, second careers, or part-time employment beyond the traditional retirement years.
The best part of all this boomer awareness is that credit unions do not have to go hunting for them because they are in our communities and in our membership. All this new business is right under our noses. Credit unions need to wake up, smell the buying power and target market to boomer consumers.
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I affectionately refer to boomers, as the "sandwich generation." This is because they are sandwiched between, and have tremendous influence over, younger consumers, their children, as well as the older consumer, their parents. Boomers will bring their family members into your institution if you get them hooked. Think of the life-time value of a boomer family to your credit union in terms of product and service opportunities. This age-defying generation has a multitude of financial service needs, and your credit union could easily become their preferred financial institution. Boomers present long-term relationship potential for credit unions.
Services such as long-term care insurance, second-home financing, RV, boat, motorcycle and muscle car loans, bill-paying services, reverse mortgages, and retirement planning are just a few needed by boomers. In other words, be prepared to offer this generation wealth management. Boomers will need assistance with the accumulation, preservation and the transfer of their assets. Boomers need institutions they can trust and rely on for this service, and credit unions have a tremendous opportunity to move into this arena and fill the need.
You need to segment and target your boomer members. Also, keep abreast of the boomer local market place for community outreach and marketing initiatives. After they have been identified, craft and cluster products to their needs.
Use of clever outside the box graphics and themes when marketing to this group will help you connect. Boomers are influenced and respond to cultural nostalgia and memories, staying young, fulfilling dreams, safety, travel, adventure and NASCAR-type promotional themes.
Some examples of successful campaigns and initiatives credit unions have used to reach boomers include:
Addison Avenue Federal Credit Union has implemented an investment integration program resulting in increased IRA deposits and investment services growth in brokerage accounts.
Navy Federal Credit Union implemented a trust services program for members in 2004 now averaging $250,000 per account and resulting in $148 million future assets signed.
Neighborhood Credit Union has implemented an Advantage 50 Plus checking program specifically designed for members over 50 that includes lifestyle benefits that are tailored to boomers (insurance, prescription and vision benefits and bonus travel).
Relationships are very important to baby boomers. They are seeking guidance and the credit union brand philosophy of trust and personal service is a very powerful attribute to this group. Important features to market to this group are both personal contact, with excellent member service, and the convenience of Internet banking, since boomers love their computers and love discovery. Boomers are the generation looking for fulfillment and value-added experiences to their lives. Positioning the credit union as a one stop concierge financial service center to meet their needs will have a huge impact on future business.
Credit unions should not only strive to be a great place to serve boomers financial needs but also to be a trusted and personable place that can add value to every member's current and future lifestyle.
John A. Vardallas is founder and CEO of the
AmericanBoomeR Group. He can be reached at
608-577-8707 or
[email protected]
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