While millennials are now the dominant demographic in the U.S., and certainly the most connected generation, they have yet to accumulate much wealth collectively. This group is managing considerably more debt than previous generations and has postponed many major purchase decisions, simply lacking the means to do so. The 15 to 24 year olds whose earning power was muted during the recession are now in their early 20s and 30s and beginning to blossom financially; they are at a point in their lives where the propensity to explore and accept financial offers is higher than ever. The rate at which millennials mature aligns closely with the pace at which new technologies evolve, providing them with a level of technological savviness that other generations simply don't have. To maximize the opportunity with millennials, credit unions must understand that reaching this audience requires new methodologies and the use of flexible, creative and non-traditional offers that are presented at the right time and via the right channels.

Influencing the Purchasing Decision: Reward and Engage

Millennials are a mobile-first generation, and prefer to keep in touch via text messaging, social media and instant messaging. They rely heavily on online information to make purchase decisions and 57% of millennials will comparison shop at the point of sale. From a marketing perspective, that's very important. Millennials don't want to get anything in the mail; even email response rates are declining, as is the success of embedded ads within web pages. Online methods tied to social media tend to resonate much better for this market segment.

There was a time when brand awareness was once king and consumers would proudly display a brand or logo associated with a particular product. But a trend among millennials is to develop an affinity for the intrinsic value of a product or a service instead. Even free branded merchandise, like hats, T-shirts and other "traditional" marketing giveaways are not as well received among millennials. A 2015 study by Accenture found that while millennials perceive financial institutions as purely transactional, 54% do respond to rewards.

Engaging millennials is important, so in addition to supporting their financial needs, credit unions should also prioritize advising this group on how to make a major purchase. Communicate about not just the products, but also the consulting services provided by your credit union. Investing in the relationship by focusing on ongoing engagement and active nurturing establishes the strongest approach to capturing millennials. If they are engaged and comfortable, they will be less likely to continue comparison shopping and more likely to make a purchase with the guidance of your credit union.

Know Your Member

Conducting a member analysis allows credit unions to develop marketing programs that closely align with members' actual needs. Traditional manual processes are ineffective for both developing and executing marketing campaigns. Credit unions need automation to develop scalable, long-term programs that allow for a very high-touch, micro-targeted outreach.

With automation, marketing to millennials makes offers more:

• Relevant by taking the long-term approach and investing in the experience and relationship. It's still important to provide the right offer through the right channel at the right time, but it's not a single event that results in the sale. Credit unions should use multiple touch points and never assume that every message is heard or read every time. Millennials (like the rest of us) are constantly on the go. If they receive an offer late in the evening while they're more likely to be at dinner or at a bar, they probably won't read it. Conversely, if they receive an offer in the morning or afternoon when they are likely in transit, an embedded link with the option to simply touch the screen and connect with a credit union employee who can answer their questions begins the process of building trust.

• Engaging by delivering multi-faceted and intriguing messages to reward the member's investment of time. Embedded online response mechanisms make it easy for members to take action when it's most convenient for them. Technology makes engagement easy, so leverage mechanisms like a hyperlink or a phone number rather than send someone directly to an inconvenient form with questions they might not have time or feel comfortable answering.

• Successful by constantly gathering and organizing data to build a digital profile. Credit unions can strengthen targeted outreach by producing relatively smaller groups that are highly-targeted, which can return a higher response rate. With the right data, credit unions can better understand a member's likelihood to accept an offer. Look at their spending profile: Maybe the individual is three years into a loan and consistently pays the bill every month. This could indicate that he or she is a good candidate for a mortgage. Yet, without automation as a foundation for gathering and highlighting this data, it is difficult to develop multiple campaigns and customized messaging to act on this insight.

Conclusion

Credit unions do not suffer from a lack of data; the real challenge is in the ability to make that data actionable. The right triggers can still influence financial decisions, so proactively building them into the engagement ensures that marketing opportunities are not overlooked. With a robust automated marketing platform in place, credit unions are well positioned to leverage analytics to more intelligently drive member acquisition and member relationship growth.

Naseer Nasim is CEO of Baker Hill. He can be reached at 800-821-8664 or [email protected].