Millennials are the largest adult generation in the United States, comprising over 2 billion people with a spending power in excess of $200 billion in the United States, giving them the largest buying power of any generation. While many are already reaching their mid-30s, banks have largely left millennial banking habits out of the picture when developing marketing strategies. Today, that is changing, as millennials are outpacing baby boomers and previous generations in spending, earning, and lending needs.
At the same time, Millennials present a new demographic, with unique technological and cultural challenges which banks must face and tackle in order to market to them effectively. Here, many millennials are digital natives, looking for hyper-connectivity and relationship building rather than focusing solely on cost or convenience. This requires a significant shift in marketing tactics for many banks.
Knowing what millennials want and adopting strategies for attracting millennials to your bank in 2019 will help you to cater to this market, their growing financial needs, and begin to adjust your bank for the needs of Generation Z.
5 Strategies to Capture Millennial Banking Business
1. Self-Service and Convenience
Most people have heard that millennials are searching for convenience, and this is true to some extent. Millennials increasingly expect services available 24/7 with self-service options as part of the product. You can incorporate self-service on your app and website by allowing consumers to update their own products and set up bank accounts. Allowing customers to fill out forms on their mobile app is another way to increase convenience and improve the overall user experience.
Consumers can achieve many things they would normally have to contact customer service for, which will save you money while giving millennials the convenience to simply make a change that they wish to make. Your bank can also integrate self-service through kiosks and smarter ATMs, allowing customers to check balances, change their products, or access information right from kiosks located in your bank.
2. Integrate Automation into Your Millennial Banking Experience
Automation is increasing in popularity for banks, with many integrating everything from chatbots to extremely sophisticated fraud prevention algorithms. There is a reason behind this trend, it works. Most banks own and have access to a lot of big data, which can be applied to everything from Paid Search Marketing to creating personalized experiences for consumers. This is important for your bank because it reduces manual involvement in utilizing automation while improving the quality of service and availability for your customers.
Combining automation with self-service means that you can use an algorithm to auto-approve loans and mortgages so that consumers always know how much they can borrow and when. If they can see pre-approval rates and options upfront, because an algorithm performs the calculation based on their bank transactions, credit history, and listed assets, they will likely immediately opt for that (convenient) option before shopping around. Automation can help you to offer more personalized services, to identify services before consumers need them, and to offer better and more relevant support by automatically directing consumers to results, information, or products and services based on their previous activity.
3. Customer Outreach
Customer outreach is an old marketing tactic for banks but it’s also one that continues to add value. While millennials value a digital presence and convenience, they also greatly value face-to-face interaction and assistance. More importantly, millennials are often suspicious of banks and companies and much more likely to distrust their bank than a baby boomer. Focusing on customer outreach, where you offer value to the customer through workshops, training, webinars, and financial literacy programs will help you to build that trust and bridge that gap.
Customer outreach is simply taking the strategy of determining what consumers want and need and why and then reaching out to fulfill that gap. This can result in college and university programs, collaborating with organizations to offer education to employees, and simply offering free signups to webinars and classes at events or outside your bank. What will you get from this sort of strategy? While customer outreach doesn’t often pay off in the form of direct consumers, it can help you to begin building relationships, helps you to build trust with millennial consumers you already have, and increases brand awareness, along with awareness of the value of the products and services you are offering.
4. Creating a Strong Digital Presence
From social media to web and mobile, your bank needs a strong digital presence if you are marketing to millennials. Most millennials are active on at least 1 social media platform, will look your bank up online before ever walking into a branch, and will compare your products and services, likely across at least two platforms. Understanding millennial banking habits and establishing a presence on social media, a website, and creating an app allows you to target the broadest range of people, show that you are committed to digital, and allows you to offer the maximum of consumer information and customer support.
For example, many millennials will simply contact you on social media rather than calling or going through a customer support helpline. This can drive value for simple questions and FAQs, and you may be able to use chatbots to automate answers on Facebook. Most millennials won’t appreciate your presence on social media because they expect it, but it will pay off in terms of more exposure, more convenience for consumers, and more value to the consumer. At the same time, social media can cost as much as 70% less to maintain than a call center, which can save you considerably as well.
5. Focusing on Relationship Building
Millennials can be extremely distrustful of businesses and corporations. Many have accrued massive amounts of debt through university and high-cost-of-living, have seen financial crisis, and understand that banks don’t always have their best interest at heart. Millennials don’t appreciate the same marketing gimmicks, free things, and loyalty programs as baby boomers. Instead, what millennials want is a significant efforts to build personal relationships, which requires that your bank operates in a transparent way, that you share information with consumers, and that you consistently offer value.
Here, you can take on policies such as assigning a few customer service representatives to customers for the duration of their lifecycle with the bank. You can also offer more in terms of personalization and customization for accounts and products. Millennial consumers want to be able to see fees and pricing with no hidden fees, they want to see their data and how you’re using it, and they want to be able to see their products and services and be able to update them at any time. Over time, these tactics will go a long way toward building and maintaining relationships with millennial consumers.
Millennials make up a generation born between 1985 and 1995, and are, today, the most important financial generation. Working to attract more millennials to your bank will help you to grow revenue and increase profit.