How To Get It Right With Millennials And Money
Feb 24th, 2010 by David Svet
Each of us is intimately aware of how we are being impacted by the current financial crisis. However, it is the younger millennial generation that deserves closer examination, as their response to the situation will have the furthest reaching impact on our future. The financial crisis is having a greater impact on the saving, investing, and consequently giving habits of millennials than many have realized. Consider the following from the Microsoft “Millennials in Financial Services” survey, conducted by KRC Research where Colleen Healy general manager of U.S. Financial Services at Microsoft states, “The financial crisis has created a deep sense of mistrust in millennials, which is keeping the next generation of wealth on the sidelines.”
• 82 percent are concerned that more financial institutions will continue to fail in the near future.
• 67 percent are less likely to invest money in the stock market based on the current economic climate.
• 51 percent are not likely to invest money in 401(k)s or other retirement plans.
This is important. Their mistrust is justified in some cases, but not all. Some financial services institutions operated in a responsible manner and are being unfairly painted with the wide brush that’s damning the entire profession. The result will be catastrophic if this is ignored. So, how can this be fixed?
I see two major steps that every institution needs to take if they are to have any chance of overcoming a grim future:
• Clearly demonstrate a differential advantage in the market by showing the good work that you do in the community — demonstrate value and integrity.
• Communicate to your market in the appropriate channels.
Most financial institutions; banks, credit unions, financial advisors or insurance companies, are unable to claim a clear differential advantage in their market. To your customers you all look the same and compete on price. Most claim that their difference is service but cannot prove their claim making it a moot point. To claim an advantage, your constituents must be able to clearly articulate how you are different and why it matters to them.
I suggest cause marketing as a solution. I understand that most institutions are philanthropic and support their local communities. But very few have aggressively taken up cause marketing as a means of supporting something they believe in and inviting others to join them with their money and effort. Millennials are civic minded and used to having a hands-on effort with causes they support. There is opportunity in making an honest effort to provide extraordinary support for a cause and inviting others to join you.
However, to make this work with the millennial generation you are going to have to start communicating with them in the channels that they choose. This means that you will need to aggressively adopt the use of social media. Recent advances in available technologies have eliminated all of the regulatory hurdles. Social media in the financial services sector is not only possible; it is now a requirement for survival. It is the channel of choice for a generation that you need as customers. To provide the service that they want, and that you claim to provide, you will need to change. It isn’t a big change, but it is a critical change whose time has come.
Original material is licensed under a Creative Commons License permitting non-commercial sharing with attribution.
