Millennials are different. And marketers, none more so than those working for financial services brands, need to embrace the difference. Millennials simply use different financial services products and prefer to purchase them online. Their digital-first orientation is influencing how people, regardless of generation, purchase banking, lending, and credit services.
Millennials are the first generation to come of age when education and economic security are the primary milestones to becoming an adult, according the U.S. Census Bureau. They’ve delayed marriage and children to focus on school and careers.
Many millennials entered the workforce saddled with heavy education debt during the Great Recession. Consequently, they have drastically changed how they manage their financial lives compared to previous generations.
Recognizing and acting on the differences in millennials’ financial services needs is critical to pursuing smart digital financial services marketing and advertising strategies to acquire them as customers.
- Focus on lifestyle
Millennials simply don’t use credit as much as previous generations. The percentage of Americans under age 35 who hold credit card debt has fallen to its lowest level since 1989, according to a New York Times analysis. But that’s not to say that they don’t use credit cards—they do. But unlike previous generations, they don’t use them to finance everyday living expenses.
Financial services brands need to find ways to offer innovative lifestyle products and financial management services tailored to millennials. Also, creating financial services marketing campaigns focusing on incentivizing usage with opportunities to experience something memorable is one way to reach Millennials, which taps into millennials’ preference for spending money on experiences, not owning things.
The financial services marketing campaign surrounding the Chase Sapphire Reserve card was an instant hit with millennials who travel more than any other generation at their age. While the $450 annual fee is steep, the number of travel rewards available to card holders easily outweighed the price. While Chase took a $200 million hit to profits because of the card’s generous loyalty benefits, retention rates were recently reported at 90%. Their millennial-focused offering appears to be paying off.
- Get personal
As millennials continue their life journeys—get jobs, get married, start families, etc.—their credit needs evolve quickly. These digital natives desire a brand experience tailored specifically to them. In fact, just within the financial services arena, 67% of millennials and parents of children under 18 are willing to see a personalized ad from their bank that helps them meet a financial goal, according to American Banker.
Yet simply trying to sell this customer additional products—especially if they aren’t experiencing the milestones mentioned above—isn’t enough. Financial institutions must anticipate needs and use personalized messages to become sources of empowerment and trust during all life stages.
The personal loan market, driven by FinTech firms, has been very successful in appealing to millennials’ changing life-stage needs.
SoFi is a FinTech that started in student loan refinancing by focusing on high-earning college grads. Yet they’ve gone much further. Not only have they expanded to offer other lending products from personal loans to mortgages, they also offer insurance and wealth management services.
But where they’ve truly distinguished themselves is by offering non-banking services that align to the needs of recent graduates, including career coaching and networking events to help their customers make a business contact or a personal connection.
- Tailored messaging
Reaching millennials online isn’t a problem. We know they’re online all the time. They’re also highly receptive to digital ads. 79% of people 18-34 say ads are necessary according to a Nielsen.
In almost every business, you need to give people exactly what they want, right when they want it–or they’ll simply move on. Unlike most consumers, this is really true of millennials. Innovative technology will be a catalyst for engagement. Couple the use of these platforms with messages and offers that speak authentically to millennials’ financial needs and circumstances.
In order for financial services marketing teams to execute this successfully, they’ll need good information. Using the most relevant and actionable data for targeting ads is essential to delivering personalized messages that demonstrate you embrace the difference of the millennial generation.
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