There have been countless debates, discussions and deliberations on how to best connect with and establish loyalty among millennials over the past several years. However, this generation’s time in the spotlight is coming to a close as a new generation quickly gains notoriety—Generation Z.
Millennials have caught credit unions’ eyes because they are maturing in their financial decisions—buying cars, purchasing houses, having kids and starting to consider retirement plans. However, Gen Z is not far behind. Gen Z is positioned to become the largest generation of consumers by 2020, accounting for $29 to $143 billion in direct spending according to FutureCast. This group’s impending fiscal prominence represents a strong opportunity for credit unions to forge relationships now and help them navigate their financially active years ahead.
Below are three tips for establishing meaningful, lasting relationships with Gen Z members.
Do Your Homework
To effectively connect with Gen Z, credit unions must understand who they’re trying to reach. Even though Gen Z shares many similarities with millennials, like their common obsession with their smartphones, there are still some staunch differences that impact engagement.
So, who is Gen Z? This generation includes anyone born between 1995 and 2012; the oldest in the group graduated from college this year. Gen Z grew up post-9/11 and doesn’t remember a time without conflict, such as the war on terror and the Great Recession of 2008. These events have triggered realistic and pragmatic attitudes in Gen Z members and cause them to be more anxious about their financial futures. As a result of witnessing economic turmoil during their formative years, this group is often suspicious of large institutions—a great opportunity for credit unions.
This group’s relationship with technology is also unique. Millennials, although they’re quick technology adopters, still remember the sound of AOL dial-up and phones that plugged into walls. Gen Z, in comparison, has never been without Wi-Fi, multiple screens or social media; they are the first true digital natives. Their constant access to a digital world creates higher expectations for every product and service, including banking.
Craft the Appropriate Messages
To forge meaningful relationships with Gen Z, credit unions must reach out with information and offers that are relevant to what this group cares about. Considering the economic landscape of their childhoods, Gen Zers are generally open to different financial management options and budgeting tools and would be receptive to information about financial health and wellness. Credit unions should pay particular attention to the student loan information and other tuition programs offered to this generation, as paying for college and managing debt afterward is a significant concern for them.
Credit unions are also well poised to help this generation follow their passions. According to a study by Ernst & Young, 62 percent of Gen Zers would rather start their own companies than work for an established business. And, the current economic and political environment is adequately set up to help them do so. This presents an opportunity for credit unions to share advice with their young members about the steps necessary to establish and finance a small business.
Gen Z cares more about making a difference than any other generation. Because credit unions also deeply care about their communities, CUs should make an effort to incorporate their community-driven and philanthropic efforts into their marketing and PR efforts. This will demonstrate to Gen Z that credit unions share their values, deepening their connection and sense of loyalty.
Leverage Digital Channels
Given that Gen Zers are the first digital natives, social media is a strong way to connect with this group. However, credit unions must be wise when selecting which platforms to use. Gen Z has a strong affinity for Twitter and Instagram but tends to shy away from Facebook. Gen Z very much views social media as a two-way street; not only will they appreciate receiving relevant information from credit unions via social, but they’ll also use these channels to reach out with specific questions and feedback.
When considering content for social posts or other communication, credit unions should embrace video. According to a study by AdWeek, 95 percent of Gen Z regularly uses YouTube, and 50 percent “can’t live without” the platform. Credit unions can incorporate video into their Gen Z engagement plan by creating “how to” videos on different aspects of financial management, offering quick explanations of financial terms and events, and by using video to illustrate the credit union’s culture.
Given their dedication to the community, commitment to member service and use of technology, credit unions possess many characteristics that Gen Z seeks from any service provider, particularly banking. But be careful not to lump this group in with millennials, or any other member segment. By understanding who they’re trying to reach and sharing relevant, tailored information and offers through the appropriate channels, credit unions have a real opportunity to form meaningful connections with Gen Z to serve them now and into the future.
Amber Bush is an account agent at William Mills Agency, the nation's largest independent public relations firm focusing exclusively on the financial services and technology industries. The agency can be followed on Twitter, Facebook, LinkedIn, or its blog.
CUES’ Credit Union Management’s online-only “PR Insight” column runs the first Thursday of every month.