Millennials are currently the largest adult generation in the nation, and they have the largest economic impact. They’re over 2 billion strong with spending power in excess of $200 billion. But “banks have largely left millennial banking habits out of the picture when developing marketing strategies,” according to Everfi, a financial education firm.
Your financial institution can’t afford to neglect this huge group. Many millennials are newly employed, buying their first home, and hitting other milestones that require financial help. According to 2019 Morgan Stanley research, “millennials could become the largest borrowers over the next ten years.”
To help you capture and retain as many millennial customers as possible, we offer these four tips:
- Improve your electronic banking options.
- Increase your social media presence.
- Earn their loyalty.
- Go above and beyond.
Let’s look at each of these tips in detail.
Tip #1: Improve Your Electronic Banking Options
Everyone knows millennials have grown up with technology at their fingertips. If your financial institution falls behind the competition’s electronic offerings, you’ll never win millennials over. Over 80% of millennials own smartphones, and that could be a low estimate. But despite the clear importance of smartphones to this huge population, many financial institutions are missing a crucial opportunity to reach millennials. As many as 67% of millennials say their banks aren’t giving them the digital experience they want.
Millennials want digital banking to be easy and robust, whether on a computer or on a mobile device. The vast majority of them prefer electronic interactions to talking to someone at a financial institution. If your digital offerings aren’t up to par, millennials will quickly go where they can find better electronic financial services—often to large national banks.
You need a website and a mobile banking app that meet their needs. These electronic banking options should allow your customers to take care of as many of the details of their transactions as possible, including:
- check-scan deposits
- loan rates and applications
- electronic payments
- real-time information, updated immediately
- updates and alerts
- iron-clad security
To tap the millennial market, you must meet or exceed the digital offerings of your competitors. Find out what they’re offering online and on mobile devices, and do what it takes to stay in the game. Any investment in your electronic options will pay huge dividends with millennials.
Tip #2: Increase Your Social Media Presence
Estimates vary on how much time millennials spend on social media, but the National Retail Federation cites 3.8 hours a day. This demographic likes to interact with businesses via social media, too. Lorman states that “52% of millennial customers have used social media to ask their banking institution a customer service-related question.”
To engage millennials, be sure your social media posts are helpful to them and address their concerns. If you don’t show you understand their needs, they’ll go elsewhere. They’re often struggling financially due to high student loans they’re still paying off, they’re battling a volatile economy, and they’re unsure how to navigate long-term borrowing. They need guidance on financial management for life goals. Use your social media sites to address such needs.
For example, here are a few ideas of help you can offer via social media:
- a guidebook for first-time investors,
- a step-by-step student loan repayment plan for recent grads, and
- information on buying a new home for newlyweds.
Millennials live fast-paced lives and expect you to keep up. You need to respond quickly to their questions on social media; staff members who can answer customer questions should regularly check for them. If you don’t, your competitors who do will win their business.
Although you may have had a tried-and-true approach to financial services that worked with previous generations, now you need to embrace change. Stay current with the changing social media landscape. Millennials favor different social media outlets than older generations do. In 2022, TikTok will likely outpace all other platforms for social media marketing, especially among millennials and even younger audiences.
Tip #3: Earn Their Loyalty
While cutting-edge technology is crucial, don’t neglect the personal touch. Many millennials distrust institutions and are quick to jump ship if they have any reason to. In fact, they switch their primary bank about 2.5 times more often than baby boomers or traditionalists.
The ABA points out that earning millennials’ trust requires a focus on personalization as well as on seamless technology. Younger customers expect and reward brands that provide a more personalized experience.
What does a personalized experience look like for financial institutions who want to attract millennials? For one thing, millennials want choices. Although they insist on first-rate electronic options, sometimes they do want to interact with your employees. Two-thirds of millennials visited a bank branch in the previous six months. And anytime they interact with your employees, they expect excellent customer service.
Make sure your customer service is quick, easy, and truly helpful. If a customer must give information multiple times before they can get the help they need, you’ll lose millennials. They won’t waste their time. “Millennials are four times more likely to leave their current service after a high-effort experience”.
Tip #4: Go Above and Beyond
Millennials have high expectations, and many financial services are willing to meet them. To compete for millennials, make sure you meet or exceed their expectations.
Here are some suggestions:
- Help them track their spending. Alert them of red flags for overspending or nearing financial trouble. One millennial quoted in Deloitte research says this is a key to winning her business: “If my bank had a tool that let me understand what my spending habits are and helped me figure out how much should go in my savings account per month to get to my goal, that’d be awesome! I’d trust it more than third party apps because it already has all my information and best shows my purchasing habits since it details everything I purchase.”
- Forgive fees when possible. For example, reward a good customer by waiving a late fee if it’s a one-time infraction. Give customer service agents authority to forgive some fees. · Offer other perks and rewards, such as interest on checking accounts and cash-back credit cards. Deloitte concludes that millennials want to know what’s in it for them, and they’ve “been trained” to seek out incentives when choosing a financial institution or service. One millennial put it this way: “My credit card saves me 5 percent, it's a no brainer. I always try to have a credit card that will save me money in every category.“
If millennials see you as just another financial institution that wants their money, why should they choose you? They want to know you’re willing to give them more—more options, more perks, more help. If you don’t, they’ll find someone who will.
Deloitte’s article quotes one millennial’s frustration with her bank’s “business-as-usual” approach: “My bank is not really helping me . . . because right now they’re kind of just holding my money. . . . So they’re not really helping me do the work, and they’re not helping me to reach my goal. And there’s nothing really helpful that they’re doing to help me earn additional money.”
Conclusion
Online banks and Fintech are tempting and convenient. Millennials think high-tech options are a given. At the same time, they need a guiding hand to make smart decisions about savings, borrowing, financial planning, and more. Local, more traditional financial institutions can give them that guidance and a personal touch they won’t find with tech-only options. That’s where you have an edge. Make it count.
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