Member Marketing Isn’t One Size Fits All

When it comes to banking, consumers have more options than ever. Competition for business is fierce. And to win it, credit unions need to understand what today’s consumers really want and meet them where they are with personalized solutions that help them achieve their financial goals.

As uncovered by “Anatomy of a Banking Customer,” a recent study conducted by Vericast, no two customers are the same. Banking habits and preferences vary widely by demographics. And in understanding the nuances, credit unions can design effective marketing programs that attract members, drive loyalty and boost the bottom line.

Gen Z

Like just about everything else in our world, banking has gone digital. And Gen Z has embraced it. When asked how they prefer to bank, 83% of Gen Z survey respondents said via mobile app and 67% said the website of a physical institution. They are thinking about and concerned with their financial health and are looking to financial institutions for assistance with savings strategies, budgeting, raising and managing credit scores, and understanding how credit cards work.

Gen Z is approachable, with nearly half of those polled indicating they are “very or somewhat receptive” to receiving marketing offers from financial institutions that will help them reach their goals, including deposit incentives for checking accounts and buy now, pay later (BNPL) promotions.

When asked how financial institutions could better serve them, respondents identified the following:

• Decrease or remove overdraft fees (28%)
• Provide financial coaching (25%)
• Help increase and/or manage credit scores (24%)

Millennials

This generation, born between 1981 and 1996, sees how other industries use technology to simplify and improve the customer experience, and they want their financial institutions to do the same. They tend to bank digitally using mobile apps (88%) and websites (76%), and they expect these channels to provide access to services and support that allow them to manage their finances, such as 24/7 support, credit card controls and person-to-person (P2P) payment capabilities.

Having come of age during the 2008 economic crash and its aftermath, millennials have delayed life’s typical milestones while navigating a challenging financial situation marked by high debt and low or stagnant earnings. They are starting to regroup and build a healthy financial life, but they need help. And they want it in three areas:

• Savings strategies (37%)
• Raising or understanding credit scores (30%)
• Budgeting (26%)

At 65%, millennials are the most receptive of all generations to receiving marketing promotions. But they expect them to be targeted and make clear how banks and credit unions can help them get their finances in order. For instance, 42% are open to offers for credit cards that enable them to save on the things they need, while 36% would like deposit incentives for checking accounts.

Gen X

Of all the generations, this is the one to watch, although it is often ignored. Members of Gen X, born between 1965 and 1980, are in their prime spending years. And they’re using all the vehicles available to them to make purchases and pay bills, including debit cards (64%), cash (49%), online or mobile bill pay (47%), and credit cards (40%). At 42%, they aren’t as open to being marketed to as other cohorts, but credit unions that serve up offers that provide value on this front, including debit or credit card purchase incentives, can capture their attention and business.

Another way to win them over is by helping them prepare for the future. While they aren’t quite ready to retire, many Gen Xers are beginning to think about and plan for it. They’re looking for ways to save money and see bank fees as one area where they can do this. They don’t want to be nickel and dimed, and they want financial institutions to lower the costs of doing business by reducing or removing the following:

• Overdraft fees (31%)
• Monthly maintenance fees (29%)
• Late fees (26%)

Baby Boomers

Born between 1946 and 1964, baby boomers are ready to retire. And finances are very much on their minds. Some are focused on making sure they have enough saved to live the lifestyles they are accustomed to in an uncertain and volatile economy. Others know they’re not where they need and want to be and are actively planning ways to get there.

Unlike other generations, boomers aren’t looking for strategic support – 56% said they are confident in their financial know-how. What they want are tactical solutions that will help them build and grow their nest eggs, such as:

• Deposit incentives for savings accounts (34%)
• Deposit incentives for checking accounts (31%)
• Higher interest rates (26%)

One notable exception to this is fraud. Of those polled, 14% said they would like their banks to continually educate them on how they can avoid being scammed.

The bad news when it comes to baby boomers is that they are less receptive to marketing. At 27%, they are the least open to receiving offers of any kind from banks other than those related to fraud prevention. The good news is that 42% said they are satisfied with the services their current institutions provide.

Marketing isn’t one-size-fits-all. Today’s consumers demand a personalized experience that meets their unique needs and preferences. Armed with market insights and data and tools to analyze it, credit unions can design and execute targeted campaigns that reach the right consumers with the right offers and boost their ROI.

Lisa Nicholas is vice president of strategy, financial services for Vericast, a marketing solutions provider based in San Antonio, Texas.