When it comes to marketing for financial institutions, most individuals will think of Millennials, the center subject of marketing for the last 10 years. Acquiring young consumers means a major lifetime value of the consumer, and Millennials are now entering a more evolved stage in their earning potential. However, Gen Z is now on the map, and Gen Xers as well as Baby Boomers have become incredibly valuable assets. Consider the following when thinking about how your financial institution targets generational cohorts.
Gen Z Provides Unique Opportunities
When most people thinking of marketing toward Gen Z, they think of a young, tech-savvy generation that will likely focus entirely on digital interactions as a point of differentiation. However, for retail banking, this isn’t the case. Due to their uncertain financial states (being young and building a financial footing for the first time), Gen Z consumers have a higher tendency to visit branches, consistent with the idea that those less certain with their finances tend to show up in person more. Marketers need to see this as an opportunity to differentiate their brand through in-branch experiences, including unique out-of-the-box concepts like Capital One cafes, geared toward a more casual in-person interaction.
Millennials Aren’t That Young
Millennials are buying homes, having children and entering a stage in their careers where they have found consistency of work and are getting promotions. The stereotype of Millennials being childless, scraping by and only interested in saving enough money for happy hour may have been applicable as recently as five years ago, but this cohort is evolving and, after a long stretch of delaying child bearing, may be thinking about their families and long term futures more.
In order to cater to this demographic, financial institutions need to tailor their services to meet the needs of this evolving demographic. Specifically, financial institutions should think about ways they can serve these life events, such as providing life insurance before having children, tailoring retirement savings to set Millennials up for success, and helping Millennials budget in order to achieve the ever-elusive goal of home ownership.
Complex Landscape of Gen Xers
Often considered a forgotten generation, especially in terms of marketing, Gen Xers have a particularly strong financial stance that puts organizations overlooking their financial power at risk. Gen X owns businesses, is in the peak of its earning potential and is accumulating wealth at the highest rate. These unique characteristics also make Gen X extremely financially responsible — that is, they are responsible for the financial wellbeing of their household, children, communities, and are increasingly facing the task of providing financial assistance to aging parents who may need help with medical care.
With all of this responsibility, financial institutions should work to provide personalized help to Gen Xers on how to best leverage their finances, meet the pressing needs they’re faced with and help them stay on track to long term goals like retirement and paying for parts of their children’s college educations.
Changing Needs of Boomers
Baby Boomers seem like an unlikely target for marketers. With most financial institutions soliciting young individuals with the hope of acquiring a malleable consumer’s attention, Baby Boomers seem like they might be stuck in their ways, already committed to a financial institution. However, the transitions of retirement, increasing medical costs and wealth management present new challenges for Boomers, and new opportunities for financial institutions. Banks and credit unions should give attention to this cohort, especially due to the sheer amount of wealth it has amassed and the huge population it represents. Finding ways to serve annuities, help with estate planning and maximize the value these individuals can receive in healthcare will help financial institutions win over this huge market share.