Winning over Millennials through Time and Convenience
Often stereotyped as self-centered social media handlers, millennials have idiosyncratic habits that are hard to understand by many. Millennials have been estimated as the largest age group in U.S history and account for 40% of the age demographic (ages 15 to 70) in the country’s labor force. If banks don’t start tweeting, posting and cultivating an authentic relationship with this generation, they may miss the opportunity to receive a friend request from this elusive demographic.
Despite their complexities, millennials’ financial goals are simple: Save. In fact, millennials are the most likely of all demographic groups to set specific retirement goals. However, millennials face a steeper road to retirement than their predecessors. For example, the graduating Class of 2016 inherited on average $37,172 in student debt. With rising interest rates, borrowing and paying down on student loans have become overwhelming. According to a recent study, 27% of millennials is willing to pay down their debt should they come into $10,000 of tax-free money compared to 15% who would invest the same amount in real estate. It’s obvious that millennials are striving for financial freedom and security and that they are often misunderstood. It’s also worth remembering that millennials are expected to inherit a significant portion of an estimated $30 trillion wealth transfer that will occur over the next couple decades. Understandably, that should make financial institutions interested in capturing this demographic.
More so than their parents, Millennials value saving on time, convenience, and experience above all. They prefer to be efficient with their time, rather than wasting it on tedious tasks. Thus, they are more likely to spend their money on convenience. We found that Starbucks, Amazon and Netflix are few of the top volume merchants millennials spend their convenience on. 60% of millennials admitted to spending on their caffeinated habits. According to our analysis, millennials are making almost 10% more transactions per card at Starbucks compared to baby boomer’s transactions per card at Starbucks.
Some previous generations – Gen X and baby boomers in particular – view this behavior as wasteful but millennials view it as a lifestyle choice. Still, this generation’s financial end game is no different than Generation X or baby boomers – they strive for financial freedom and security.
To keep pace, financial institutions will need to tailor their rigid systems, communication styles and approach to make saving money and time more effortless and convenient for this strong-minded bunch. Your friend request is still pending because it must win millennial’s trust through innovation. The key to a winning millennial campaign is to keep it convenient and authentic. No millennial wants a fake friend. In fact, they want a personalized connection that also meets their expectations for convenience rather than a lesson from financial institutions or products.
Financial institutions will need to engage millennial through instant gratification. Time is money for these millennials and financial institutions should be reluctant to waste a millennial’s time. They will need to constantly enhance the time saving experience. Communication and social media engagements must be an ongoing effort. Financial institutions will need to be authentic in their approach but must stretch all available channels. The firms that can master these practices will be far ahead of the pack. Doing so may finally result in an accepted friend request from this demographic.
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Boston, Mass.-based Saylent, named to Deloitte’s Technology Fast 500 list in 2014 and 2015 and a sixtime Inc. 5000 Fastest Growing Private Company (2012-2017), provides financial institutions with data analytics software and services that improve profitability and product innovation by delivering smarter, deeper, actionable insights on the financial behaviors of consumers and businesses. With Saylent, financial institutions are empowered to drive new revenue streams and increase loyalty by delivering targeted programs and solutions that their customers and members desire.