Unleashing New Revenue with Older, Tech-Savvy Members
Forget the myths floating around about baby boomers’ lack of savoir faire and stubborn reluctance when it comes to embracing mobile phone and social media.
They’re just as tech wired – if not more – than their millennial counterparts if various pieces of industry data are indications.
According to a Google mobile banking trends report, 71% of boomers bank online at least once per week and a 2013 Pew Research Center report found that seven out of 10 seniors 65 and older own a mobile phone.
Social media use is just as strong for those in the 50-64 age bracket with boomers increasing their presence on Facebook alone by 80% between 2011 and the first half of this year, revealed a 2014 survey from iStrategyLabs, a Washington-based digital communications agency. Last year, 43% of boomers said they used at least one social networking site, up from 26% in 2010, according to Pew.
“If you’re really looking at connecting with the boomer crowd on social media, Facebook is really the best place for you to connect,” Michael Ogden, digital media manager at CUNA Mutual Group said. “Right now, baby boomers make up roughly 16% of the Facebook population and that's way up from just a couple of years ago. The thing is, Facebook is turning into a connecting and shopping network for this age group.”
Credit unions looking to engage their boomer members for services such as retirement planning and investing, might want to consider social media as a key way to reach them, Ogden added.
“They’re engaging, they’re shopping, they’re snooping around for good deals, so I say as a brand, as a credit union, do your audience research and connect with the boomers. They’re listening and they want to engage with you, if you can help,” he suggested.
With the tidal wave of information available on how credit unions and others can use social media to not only sell products and services but open up cross-sell opportunities, the deluge of data can be overwhelming. Where should credit unions start?
As Ogden offered, researching boomer online behaviors can help determine what they’re looking for. For instance, the traditional checking account still remains a valuable asset for most credit unions even as the payments industry continues to evolve.
“You have the ability to connect and make [them] more valuable and useful for your consumers,” said Karen Webster, CEO of Market Platform Dynamics, a Chicago-based platform planning firm, during a May CUNA Payments Roundtable that took place in Las Vegas. “You have the relationship, and you have the funding source. Everyone wants access to those assets.”
While boomers have the spending power to affect change, Webster said until millennials’ use of financial activities improves, it may slow down the pace for other generations including boomers.
Boomers have the money to invest and spend on technology, said Joe Sullivan, CEO and founder of Market Insights, a Chicago-based financial services industry consulting firm that works with credit unions. As many of them reach their retirement or the end of their careers, their income and assets could very well be the greatest they’ve ever had, he pointed out.
“This equals much more disposable income to spend on new phones [and] tablets,” Sullivan said. “This, when combined with the propensity for personal financial management and investing via mobile devices suggests that credit unions must not only provide access to investment products and services but also seamless access of them through a mobile device.”
Long-term products tied to investments and retirements are the logical choices for boomers making life transitions. Where to place the bull's eye varies between each generation. Boomers ranked risk level, portfolio diversity and previous returns as the three most important factors when selecting investments, according to deVere Group, a global independent financial advisory organization that polled more than 880 of its 80,000 clients ages 22 to 70 in the U.S, United Kingdom, Hong Kong, South Africa, India, and several other countries.
Besides investment and retirement planning products and services, boomers still have a need for auto loans, home equity lines of credit, and lately, small business loans, Sullivan said.
The oldest of the boomers have become the most likely segment of the population to buy a new car, surpassing the 35-to-44-year old age group which dominated five years ago, Sullivan said. Among the reasons for their vehicle purchases is many are working past the typical retirement years and need reliable transportation, he added. Others still relish the feelings of freedom and youth that new cars can bring.
Some boomers aren't likely to sell their houses but many are open to home renovations, which can create an opening for credit unions to offer HELOCs, Sullivan said.
One in four individuals ages 44 to 70 is interested in becoming an entrepreneur and 63% of Americans plan to work during retirement, according to the SBA. Sullivan said credit unions that offer small business loans to boomers can carve out a niche here.
Regardless of the product or service being offered, social media can be the link to secure that loan or bump up a line of credit.
Earlier this year, Facebook launched the “Buy Now” button in certain markets, meaning you can actually shop while looking through your feed, Ogden said. Amazon learned early on that boomers love to shop at home, he noted, adding, he's guessing Facebook is hoping for the same thing.
“Let's not forget Twitter and Google+, both sites are seeing great growth in baby boomers signing up on these platforms. What's interesting is that this population isn't posting on Twitter, for instance, that much,” Ogden said. “But Twitter and Google+ have become great tools for healthcare research for this population.”
On the mobile front, like the younger generations, boomers have little patience for websites that are not optimized for mobile use, Sullivan said. The Google mobile banking trends report found that 40% of consumers would move to a competitor's site if the one they’re on is not mobile-ready. One in six said a clunky and frustrating mobile experience drove them to switch financial institutions.
“Everywhere along this this technology wave, boomers were the first adopters of technology. They were the ultimate trial market for decades,” Sullivan said. “It's a convergence: They’re older, they have more money and they are comfortable with mobile devices.”