Gen Y: The Financial Industry’s Next Boom(er)
Everywhere it seems, marketers are targeting younger and younger customers.
Malls are full of ‘Tweener stores. Print media, like Time For Kids, flood grade school classrooms. On line, social networking sites like Club Penguin have huge followings. And multiple TV networks targeting youth like Sprout and Noggin are prevalent. Obviously marketers see opportunity in chasing this young demo. And it appears this target audience is only getting younger.
One place where customers are actually growing older is in financial institutions like banks and credit unions. And it’s not a good thing. For instance, just look at credit unions, where the average age of an account holder is 47!
It makes sense when you consider that the largest generation of our time, Boomers, who now range in age from 45 to 62, represent 78 million people. This group is well past their prime borrowing years of 25-44 and is moving full speed into retirement. So clearly, banks and credit unions face a challenge in trying to re-balance their customer profile in the near future. The 76 million dollar question is where should they be looking to find their next audience?
Start with middle schools and move up.
Generation Y, or Millennials, will be the next big market for financial institutions. This group’s age range is 14-31 and represents 76 million people. It will have a buying power like no other group before them, wielding $500+ billion in annual spending power, more than their Boomer parents had.
To understand more about this group take a look at these facts from eMarketer and the Millennial and Financial Services Forum:
- By 2015, Gen Y will make up two-thirds of the consumer financial market
- 90% of Gen Yers own a personal computer; 85% own a cell phone
- They spend more time online than watching TV
- Gen Y lacks basic financial knowledge/education, and they have few healthy financial behaviors
- They don’t save– 69% of Generation Y workers who are eligible for a 401(k) retirement plan are not enrolled
- Gen Y workers communicate more thru technology than in person
- Gen Y is family centric and have influence in their parents buying decisions
So while we’ve established that Gen Y is a force to be respected and marketed to, the question remains how to do it. It’s not a gimme. Gen Y knows and relishes their role as a prime target for marketing and pitching. They don’t respond to overt sales messaging and will quickly move on to something else if you bore them.
But if you can reach them and earn their trust, you will be rewarded.
A great place to start is addressing one of their vital needs– financial literacy and education. Provide them helpful insight but do it on their terms with options so they can choose how they want to receive it. Ask for their input in shaping the strategy. Try creating an advisory board of Gen Y members. And above all, test your campaign on a focus group before executing it fully.
If you have tried reaching Gen Y with or without success, let us know how you fared. We’d be happy to compare notes and share more information.