It’s my pleasure to have guest blogger Tansley Stearns, Chief Impact Officer, Filene Research Institute, share her thoughts on Millennials and personal finances in a pair of special blog posts. The second post will appear next week. -Stephen
Millennials are changing the English language. From ‘YOLO’ to ‘the struggle is real,’ Millennials think and express thoughts in their own unique way as they navigate the social, economic and cultural influences surrounding them. They are the largest and most diverse generation in American history — and they have the most buying power.
Knowing how this group of consumers feels about borrowing, saving and investing is imperative to the future of banks and credit unions. For example, the average credit union member age is 46, illustrating the importance of attracting and retaining consumers in the 18-33 age bracket.
If financial institutions want to avoid a failure to communicate with – and attract the business of — this unique market segment, marketers need to understand the language Millennials use to discuss personal finances.
In the next two posts we’ll explore these topics about Millennials:
- How they talk about money-related issues
- Their style of speech for discussing personal finances
- Their perceptions of financial services, instruments and institutions.
Millennials don’t think or talk the same way other generations do about money-related issues, and financial institutions should follow their lead by designing products and communications about those products that directly address who they are and where they are in their financial journey.
Whether it’s a basic checking account for prospects, or a cross-sell opportunity for existing account holders, Millennials want to hear a message that’s attuned to their life situation, not to their older siblings, their parents or grandparents. In other words, be relatable.
When you differentiate your offerings and communications to Millennials, it also means you are differentiating your financial institution from your competitors.
For many Millennials their initial attitudes about money are negative, having been shaped by the cost of their college education. College debt monopolizes the money conversation. For many, the college loan process has been their sole or primary interaction with the financial services industry, it’s not always been a positive experience.
A college education should create opportunities to succeed, but many Millennials consider it a prison sentence: a burden that weighs on them and heavily impacts their attitudes and actions about money. In their eyes, it’s not the future they expected. After all, they were told to ‘get a college education.’ But too many students are saddled with a lifetime of debt because of it. This influences decisions about careers, jobs and their attitudes about additional borrowing, whether it is for a credit card, an auto loan or a mortgage.
Millennials can see financial institutions as the bad guys in charge of a rigged system. From your perspective as a marketer, you may be promoting attractive products and services with great rates, all in an effort to engage and interest them in your financial institution. Millennials, however, may feel as though you’re setting them up, enticing them to take on credit card debt they can’t handle, loans they don’t need, and potential bankruptcies just waiting for the first economic slowdown or job layoff to become a reality.
What’s the answer? Financial institutions need to make Millennials feel good about their financial choices. To be relatable, plug into their mindset and attitudes about life.
Millennials are fond of the saying “you only live once,” or YOLO. Their thinking is to go for it. You only get one life so do what you want, enjoy it. Oh and by the way, although I see my debt as a burden, I shouldn’t be penalized for it.
Contrast that with the Millennial who lives with a “fear of missing out,” or FOMO. This is the anxiety Millennials have that others may be having a great time doing ‘X’ and I’m not there, too. This Millennial craves social and experiential consumption over the accumulation of material possessions. Driven by social media, FOMO feeds Millennials’ need to be part of the scene and avoid feeling left out.
In our next post we’ll look at how financial institutions can use these aspects of Millennial language and attitudes to communicate successfully about your products and services.