Apply these 10 strategies to grow your millennial and Gen Z membership.
The average age of a credit union member worldwide is mid-to-late 40s: In Canada, the median age is 53; in Australia, the United Kingdom and U.S., it’s 47.
But with 70 million millennials (born between 1981–1996) and 86 million post-millennials (Gen Z and beyond, born after 1996), it is safe to say that these younger generations will comprise the majority of future credit union memberships in the near future.
Unfortunately, 71% of U.S. non-members ages 18-24 are “not at all familiar” or “not very familiar” with credit unions, according to a recent World Council of Credit Unions guide. This demographic will become your base membership in 2042.
Millennials were forced to deal with the reality of adulthood during or shortly after the 2008 financial crisis. Both generations grew up with the internet and smartphones. They have diverse opinions on culture, race and politics but common needs when it comes to money and technology.
Due to their broad range of digital experiences, today’s young adults demand more from financial institutions than they did 25 years ago. They need an app for banking on the go, student loan options and financial education around budgets, borrowing, credit scores and investing.
So how can credit unions keep up with the financial needs and interests of future generations? Start by applying these 10 strategies.
1. Establish Credit
Credit unions are known for their fair loan repayment terms and for helping people establish and maintain a high credit score.
With a lack of financial education in schools today, credit unions can take on the task of educating younger members about building credit. This can lead to additional opportunities within the CU for the same member. For example, a new member with a high credit score be presented with offers personal loans, auto loans, a home loan or increased credit card limits.
2. Provide Easy-to-Understand Information
Millennials and other young adults don’t need trendy language to help them make a financial choice, but they do need easy-to-understand information that can help them weigh pros and cons. They might even need human interaction to determine the consequences of certain financial choices.
Making adult financial decisions will never be “cool.” While personal finance is a part of growing up, credit unions must stick to providing up-to-date services and spend fewer marketing dollars on trying to “fit in” with the latest generation.
Keep in mind, you need to reach this age group by the time they are leaving college and before they are influenced by an employer. These generations are used to being guided by parents, family, friends and teachers—in person and on social media. Try connecting with this group about the benefits of your credit union through their networks.
3. “Young & Free” Websites
An outdated website is a no-no for any business, but it’s especially harmful for businesses that are interested in attracting young consumers.
Credit unions can appeal to millennials and Gen Z by launching "Young & Free" websites. These sites feature young spokespeople who provide such financial education as how to maintain a good credit score, how to save money, the pros and cons of car buying versus leasing and how to find an apartment.
Some credit unions also offer special incentives via their “Young & Free” websites to attract a larger audience. Incentives could include fee-free accounts, budgeting tools, mobile access and more.
4. An Easy, Customized Experience
With the rise of social media, today’s young adults have scrolled and swiped it all. They can instantly know the latest pop culture trends or make a payment, whether they are at home or on the go.
Credit unions must customize their mobile and payments experience to stand out from the crowd. Offering personalized debit cards, fee refunds (because we all make mistakes) and app tools that track personal financial goals can build a relationship between younger members and their credit union.
New members should also be able to virtually apply for an account or loan, make payments, transfer funds and receive notifications. Services should be as easy to complete as possible while being safe and secure.
5. A Community-First Approach
A common trend when appealing to younger generations is to support socially conscious businesses. Supporting businesses that give back to the community shows that your credit union values its member and community relationships.
6. Change is Good
It is important to continually look for ways to improve the interaction between young adult potential members and credit union employees. The attitude and personality of your employees can make a huge difference in boosting word-of-mouth referrals. And today’s young members are used to patches, upgrades and enhancements, so don’t be afraid to upgrade your CU’s member experience.
If your young adult member base is low, consider surveying current millennial members for improvement and upgrade opportunities. Younger employees can also offer insight into what is working and what is lacking.
7. Keep Your Banking Options Online and Offline
Even though future generations will be heavily influenced by tech, they still crave human interaction. While most will do the majority of their banking on their smartphone, they still may request help from an employee for more complicated financial matters like loans or new products that would be better explained in person.
Keeping both mobile and brick and mortar options available to future consumers has proven to be more beneficial than going digital-only. Having a physical location to make cash deposits and talk to financial professionals is key to building a solid relationship.
How you share an incentive is just as important as providing one. If you provide an amazing incentive for young adults but only use traditional marketing, you are selling yourself short. Incentives must be advertised where young adults hang out. Place targeted ads on social media, segmented by age and location, for the greatest impact. Consider incentives related to the day-to-day interests of those potential members (e.g., tickets to movies, sporting and charitable events.)
You can also offer such programs as monetary rewards for good grades, low-interest micro-loans for first-timer borrowers, or free financial counseling via online chat.
9. Engage With Your Target Market
Young adults can see empty promises a mile away. If you want to turn them into long-term members, you will need to be available when and where they spend their time. Social media channels should be checked regularly and often, and compassionate responses should remain a priority, just as they are in branches.
Social media posts should be consistent but have a conversational tone, offering value for your members. The posts should not sound “salesy,” as this language is a turn-off for young adults. Informative posts can help increase your member base as current followers share practical, helpful content and tell others about your credit union’s excellent service.
10. Encourage Board Diversity
Need fresh ideas? Take a look at your credit union board. Are there any members under 60? Younger board members can offer ideas that directly reach new members in their age group. A young director can also be a spokesperson for your target market. If you need younger members, choose a vibrant board member with distinction in your community.
A focus on diversity is always a good investment. Your board members should be a reflection of your community. This creates trust and ensures consideration of community groups that could be a substantial source of revenue and referrals for your credit union.
By employing skilled young adults in your credit unions and recruiting Generations Y and Z to your board, you will have a fresh take on challenges, opportunities and marketing initiatives. It is with this input that your organization can grow in membership, markets and assets over the long term.
Richard Gallagher is CEO of CUES Supplier member Oak Tree Business Systems Inc., Big Bear Lake, California. Oak Tree has provided top-quality, fully compliant credit union forms and disclosure packages for more than 35 years that easily integrate with any data processor in any state.