For credit unions that are interested in appealing to younger consumers, the solution is rather straightforward – focus on perfecting the member experience, both online and offline.
"It's not about appealing to a generation," Ryan Ruud, CEO/founder for The Credit Union Consulting Group, said. "Stop asking how we can reach millennials, Gen X or whatever generation or member segment. And start with the question of, 'What can each generation teach us about improving our member experience?'"
A Filene Research Institute report titled, "Coming of Age: Young Adults in 2015," found that 73% of millennials are more likely to be excited about a new offering in financial services from Google, Amazon, Apple, Paypal or Square than from a traditional financial institution. Furthermore, in part two of its Young Adult Membership Growth Series, a recent World Council of Credit Unions report titled, "Lessons for Young Adult Membership Growth," further drives Ruud's point home. The report provides 14 case studies from 10 countries detailing how to effectively reach and serve younger consumers, and in one instance, Sam Maule, emerging practice lead for the Charlotte, N.C.-based Carlisle & Gallagher Group, shared that in the digital age, the mantra "save me money" applies to all age groups, income levels and ethnicities.
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"These simple three words turn your work from internally focused to consumer focused, and at the end of the day that's all that matters," he stated in the report.
Connecting the dots between brand and member experience, regardless of the generation targeted, will help credit unions deliver what consumers need, Ruud said. Credit unions should also avoid making the mistake of trying to be hip by attracting members with a promise that gets broken when the member heads into a branch, applies for a loan or searches for information online.
"When credit unions stop looking at generations as something unique and needing to be handled, but rather as the needle tip of a fluid transition from trends of the past to what the future will look like across a wide swath of the population, then we're in business," Rudd said.
It's also important to take steps to change processes, as well as learn from emerging trends, rather than dismiss them as a millennial thing, he said.
"Half the battle is figuring out how to spread what we're doing now to reach this younger generation across our membership as a whole," he said. "Because before you know it, those trends you thought were just for millennials will spread to the boomers, or become the only way to reach the underbanked."
By focusing its resources on membership growth and retention, and by increasing the number of services per member by age group, Altra Federal Credit Union has lowered its average membership age to 39 years old in the past three years. According to the NCUA Financial Performance Report Ratio Analysis, effective March 2015, Altra FCU's market share growth was 20.07% compared to its peer average of 14.90%, and its membership growth was 7.02% compared to its peer average of 4.60%.
The shift began five years ago when the $1.08 billion credit union, based in Onalaska, Wis., hired a youth coordinator responsible for recruiting members aged 17 and younger, as well as coordinating youth and educational programs. For these younger members, developing programs that allowed for fun while learning was a priority – for example, the credit union created Camp Cash for children ages 8-10, where key financial concepts were taught through hands-on activities during two four-hour sessions. Another program, Modah Island, allows high school students to create their own avatars while playing in a virtual financial world.
As Altra FCU members transition to various life stages and reach new milestones, the credit union adjusts its retention plan accordingly, building awareness while catering to members' needs.
For example, when members turn 13, the credit union sends emails to the teen and his or her parents promoting Altra's prepaid debit card. The credit union also offers its mobile deposit services to teens ages 15 and older with their parents' permission. And high school juniors and seniors receive retention packages from the credit union designed to make them aware of the programs, products and services that can benefit them as they move out, head to work or enroll in college.
Altra FCU also created the microsite DriveAltra.org to assist first-time car buyers with researching cars and financing options. For first-time homebuyers, the credit union offers a special share certificate that can be used to save for a down payment – members can deposit money any time at a rate of 3.00% APY on balances of up to $25,000.
To spread the word about the homebuyer certificate, the credit union hosted Homebuyer After 5, a trade show-style mixer where attendees were not only provided an information packet outlining the dos and don'ts of home buying, but could also talk to builders, Realtors and home inspectors while enjoying appetizers, wine and beer. The event drew in some 80 new members.
"We're lucky that the culture here is one that encourages sharing ideas and getting things done," Cheryl Dutton, vice president of marketing for Altra FCU, said. "We're not afraid to try new things and if it doesn't work, we regroup, figure out what worked what didn't, and move on from there."
Plans are now underway to launch a first-time homebuyer microsite and video series containing 30-second clips that help educate consumers. Dutton said Altra FCU is also looking at ways to help college students with their student loan debt.
"We think it's important to have that membership succession plan of how we can help our members better prepare for life, whatever their goals or dreams," she said. "We still have a lot to learn. Our biggest surprise in this process has been that 23% of our members joined during youth, and they have a higher number of services per member than our average member does as they move through life stages."
The credit union also grew engagement by sending out auto loan and free credit report check offers to inactive members with checking accounts. Dutton said the credit union's ongoing challenge is to develop new programs that keep members engaged in a rapidly changing technology environment.
Ruud added that credit unions need to remember that innovations such as mobile banking and 24/7 service shouldn't be restricted just to those ages 35 and younger. Finding something that works for one generation, but can also influence your entire membership, is a win-win, he said.
"The reality is, we are all now exposed to the Amazon effect," he said. "We all know what it's like to have extremely great experiences online and that banking can be different. It's time for credit union boards and executives to see generations as guides for their membership and the credit union's strategic vision overall, rather than just one of a handful of member segments."
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