Mark Arnold > speaking • branding • planning

Why Marketing to Old People is Important

“Younger, younger, we must get our credit union younger.” That is a mantra many credit unions are chanting these days. While attracting Generation Y members is a critical strategy, credit unions must not forget a core constituency: old people. For the sake of this post, I’m not going to define “old.” I’m guessing some folks will consider anyone over 30 “old” so I’ll leave the defining to you. However Matures are typically between the ages 69 and 86.

Who are you calling old?

First of all be careful how you address old people in your marketing. They don’t want to be called “seniors”—until they go to Denny’s or the movies! More than likely, many of your credit union’s board members are from this generation.

This demographic still has plenty of things that are a fit for credit unions. Their deposits serve as a base for loans to our younger members. They are also planning on transferring a huge amount of wealth to their children and grandchildren. Products like investment services, reverse mortgages, RV loans and vacation loans (to take their grandkids to Disney) are all good options.

Tips to reach Old People

Here are a few suggestions on ways to market to the Mature generation:

1)      Make branch printed material larger—One of the worst parts about getting old is failing eyesight (not that I would know anything about that). Make sure your rate sheets aren’t printed so small that someone can’t read them.

2)      Emphasize savings—Don’t assume you have all your Mature members’ money. One friend recently recounted the story of his older mother letting him know she had $5,000 cash in her freezer for safe protection.

3)      Remember investments—Obviously, they are a good target for estate planning because of the wealth transfer issue. Having a CUSO for investment services can generate additional non-interest revenue for your credit union.

4)      Reward loyalty—This generation tends to be your most loyal members. Relationship building through a high level of personal service is fundamental.

5)      Don’t write off technology—They do indeed have some level of sophistication with technology. Because they have now discovered pictures of their kids and grandkids they are using computers to connect with their family.

6)      Treat them with respect—This is perhaps the most important thing your front line staff can do. Use the words “Yes, sir” and “No, mam.” We tend to de-value old age in our society. Give them the respect they’ve earned.

7)      Ask for family referrals—Be sure you know who their kids and grandkids are. Getting to know the entire family will help when the wealth transfer issue becomes a reality. One credit union actually told a story in their newsletter about one of their Mature members who had over 20 grandchildren: all of whom were members of that credit union.

So yes, your credit union should certainly “go young.” But not at the expense of reaching the old.

10 Ways CUs Can Bridge the Generation Gap

“The old style advertising that works very well with boomers, ads that push a slogan and an image and a feeling, the younger consumer is not going to go for.”
—Business Week

 

Our society continues to change with each generation. We’ve gone from Pearl Harbor to Pearl Jam; from stern parents to Howard Stern; from Neil Armstrong’s walk on the moon to Michael Jackson’s moon walk; and from American Bandstand to XM satellite radio. Our society and culture have changed.

But what does that mean for credit unions? Actually, quite a lot. There is a huge generational gap that exists both with our membership and among our employees. Credit unions that embrace and leverage these generational differences will succeed. Those that ignore the generational implications risk becoming obsolete.

Various dates are used with each generation. For example, one source might indicate Boomers were born in 1960 while others say it was 1964. For the purposes of this post, we will use the dates from William Strauss and Neil Howe. They are the leading demographers of our country and use dates associated with societal change rather than parental birth patterns.

Strauss and Howe break the generations into the following groups:

• Matures—born between 1925 and 1942 (between the ages 69 and 86). Matures are also known as the Silent Generation and the Greatest Generation. There are currently 27 million Matures (9% of the population). You never want to call this group “seniors” in your marketing material. They don’t want to be called seniors—until they go to the movies!
• Baby Boomers—born between 1943 and 1960 (between the ages 51 and 68). Baby Boomers are also known as the original “yuppies” (the young upwardly mobile professionals). There are currently 64 million Boomers (21.5% of the population).
• Generation X—born between 1961 and 1981 (between the ages 30 and 50). Generation X is also known as Baby Busters, Slackers and Latchkey Kids. There are currently 89 million Xers (30% of the population). We just blew away a myth. The myth is that there are more Boomers than Xers. That is actually not true (of course, it’s because the Boomers are dead from the drugs they took in the sixties—just kidding!).
• Generation Y—Born between 1982 and 2003 (currently between the ages 8 and 29). Generation Y is sometimes referred to as the Dot Com Generation, Echo Boomers or Millenials. Depending on where you mark the demarcation line, there are 78 million in the Gen. Y group (26% of the population).

Here are several practical steps credit unions should take regarding generational issues:

(1)    Pull the current age of your existing membership base and put them in these generational buckets—This gives you invaluable data about your credit union. If the majority of your members are in the Mature or older Baby Boom demographic, where will your credit union be in five or ten years?

(2)    Conduct generational training with staff—Your front line staff tends to come from Generation Y, while your members who conduct branch transactions tend to be older Boomers or Matures. Can you say “generational clash?” One credit union actually became one of the top ten credit unions in the country in membership growth by focusing on generational training with their staff.

(3)    Focus on generational issues in your strategic planning session—Every credit union should conduct strategic planning on a yearly basis. When doing your session this year, spend time examining these generational issues and the many strategic implications.

(4)    Examine your brand—Does your brand resonate across the generations? What is your brand vision, mission and message?

(5)    Determine your targets—Your credit union cannot be all things to all people. And it can’t be all things to all generations. The best credit unions focus on particular niches.

(6)    Serve the generations uniquely—Take the above information and customize talking points your front line staff can use with each group (for example, grandchildren CDs for the Mature generation).

(7)    Bridge the generations—While separating the generations is helpful, you also want to look for ways to bring the generations together. This could be in the form of wealth transfer or college planning workshops.

(8)    Update your marketing—Make sure marketing is not “old school” (unless your primary target is Matures). Do the images in your newsletters and brochures match your target generations?

(9)    Conduct generational focus groups—One of the best ways to research the generations is to dialogue with them. Focus groups can provide keen insight on what is important to each group.

(10)Show each generation value—We are biased toward our own generation. Yet each generation brings unique value to the credit union. We need each generation to grow our credit unions.

For more information about credit unions and generational issues, you see read two longer pieces on the subject I wrote recently. One appears in the December issue of my e-zine. The free e-zine gives more details about marketing insights for each generation. You can also read a piece on CUInsight’s Community Page, American Bandstand to Satellite Radio: Generational Marketing Improves Results.

Tips For Managing Generation Y

A few months ago I had the opportunity to interview Matt Monge, vice president of People & Development at Fort Campbell Federal Credit Union (and also president of the Mojo Company, a consulting firm specializing in organizational culture). That interview tuned into a post, “Changing Your Credit Union Culture.”

Matt also had some keen observations about Generation Y and business books that were unable to fit into that original post. Below is a brief Q&A with Matt Monge.

What tips could you give supervisors who are managing people from Generation Y?

You’ve got to paint the picture for Gen Y. They want—no, they need—to feel like they’re part of something bigger. They need to see that what they do, both individually and organizationally, matters in the grand scheme of things. They need to have answers to questions like: Why does my work matter? Why is it significant? Whose life will be better as a result of my work?

Provide Gen Y with work environments where collaboration is the norm. They like to feel and be connected. While this used to be a luxury for Gen Y, now it’s an expectation.

Allow them appropriate levels of autonomy. Give them space to further define their role within the organization. They need to feel like they’re making their own way, not simply checking off duties on a job description. Give them expectations and goals, but also provide them room to create, innovate, and take their role to another level.

Further, provide a clear path for them to make real contributions to the organization, its goals, and its direction. This certainly includes empowering them to do meaningful work. Again, simply punching a clock and getting paid isn’t enough for Gen Y; they need to feel like their work matters. They need to feel that they’re making an impact.

Allow them to express individuality. Whereas in eras gone by, fitting into the corporate landscape was the norm, Gen Y values being able to be themselves. They want to be able to express themselves – in appropriate ways of course – while at work.

What business books should every credit union professional read?

Wow. That’s such a tough question; there are so many great titles out there. I’d recommend anything by Patrick Lencioni and Seth Godin. I know those are relatively new authors, but their books have been exceedingly helpful to me. They won’t connect with everyone the same way, but their messages and ideas resonate with me. The Five Dysfunctions of a Team; The Three Signs of a Miserable Job; The Four Obsessions of an Extraordinary Executive; and Silos, Politics and Turf Wars are a few of Lencioni’s works that I’ve especially enjoyed. And among Godin’s books I’d point to Linchpin and Poke the Box as a couple of my favorites. Though Lencioni and Godin are entirely different stylistically, I appreciate how they both focus on the human element of business and acknowledge that that’s where the true power of any organization or idea is.

Using Student Loans to Reach Generation Y

A new white paper (authored by Jim Jerving) published by the CUNA Lending Council attempts to answer the question, “Should Credit Unions Attempt to Offer Private Student Loans?” The paper explores an even bigger questions credit unions are dealing with: how do we reach Generation Y?

“Credit unions need to forge relationships with the 18 to 24 year old demographic,” says Gary Perez, CEO of USC Credit Union in the paper. “We are not serving young members as we did during the days of their parents and grandparents. They don’t look to us the same as prior generations; this group needs us.”

The white paper is extremely thorough, offering a student loan game plan along with multiple credit union examples. Credit unions highlighted include USC Credit Union, University of Michigan Credit Union and University of Wisconsin Credit Union.

Some of the key insights the report offers include:

• Government guaranteed loans, grants and personal savings no longer cover the costs of college for a number families; students and their families are turning to private student loans to finance the gap.
• Private student loans are an opportunity worth considering as lenders seek more options.
• Schools now certify the student’s financial needs. Loans are paid directly to the college and it’s rare to have the loan discharged through bankruptcy.
• Many college students are unaware that credit unions offer student loans.
• Credit unions may want consider partnering with a CUSO to offer private student loans.
• Offering private student loans does have many challenges.

Your credit union will not get younger unless you offer products and services with Generation Y in mind. One of those key products is private student loans. Before launching into that service, you should read the CUNA Lending Council white paper to determine if it is a good fit for your credit union.

Technology as a Game Changer: Are You Ready to Play Ball?

 

Note: The following is written by Colleen Cormier, an associate with On the Mark Strategies.

My family took a much needed (and pleasantly cool) vacation to Maine earlier this summer. On one of our many flights, I witnessed something I won’t soon forget. It was a teenager who had so many wires attached to his body, I almost wondered if he was part robot. I’m not kidding. He had cords coming out of his head, and more cords coming from under his shirt, and all them eventually led to what appeared to be a watch on his wrist – about one square inch of space. I first spotted him in the airport, but as luck would have it, he ended up sitting directly across the aisle from me on the plane. I was so fascinated with this person that I couldn’t take my eyes off of him the entire trip. I finally got the nerve to tap his arm and ask if his watch was really controlling all of his other gadgets.

 

He was a very nice young man and he humored me (and probably thought I was really old). What he had on his wrist was an iPod nano – an MP3 player which also served as a charger for his other gadgets. The reason he was so “wired” was because he was listening to music with his earbuds, charging his cell phone and doing something else I can’t remember, all from the iPod nano. That got me to thinking. If he’s running all of that from an MP3 player, what must he be able to do with his cell phone? And if he can do just about everything with two small gadgets, how will that change the way financial institutions operate moving forward?

Traditionally, the financial services industry has been reluctant to adapt technology according to the speed at which it moves. Banks are just as guilty as credit unions, and some of it can be blamed on the regulatory environment. However, technology will be a game changer moving forward. It will serve as a great differentiator in this industry. The organizations who succeed will be those most willing and able to serve the needs of the digitally dependent.

This is strategic planning season for most credit unions, and technology should be part of the discussions. Often, these discussions become a battle between generations. Listen to your younger executives pulling for more cutting edge service. Let them conduct a technology audit to see where your credit union stands and where it needs to be in five years. Bring in an expert speaker who can demonstrate to your decision-makers how technology will change the face of banking. Allocate the proper resources to make technology a priority now, even if that means partnering with organizations that have the resources to help you bring cutting edge services to your members.

The technology game is on. Credit unions have to decide if they’re going to get in the game or sit on the sidelines. It’s time to play ball!

Generation X is Turning 50 This Year: What that Means for Credit Unions

 

Do you remember when Generation X was the latest buzzword? It doesn’t seem that long ago when these people with body piercings, grunge clothing and an aversion to alternative rock were all the rave. They were changing our world as we knew it. This year, the oldest are turning 50. That will mean a shift in financial needs. Is your credit union prepared to continue serving them? The answer is not an automatic yes, just because you have served people of the same age from previous generations. Gen Xers are not Boomers, and their needs are not the same.

Strauss & Howe, the leading demographers in the country, define the Generation X population as anyone born between 1961 and 1981. Now squarely at middle age, this generation grew up with remote controls, pagers, microwaves, computers and cable television. Many were latchkey kids. They have always defined themselves by individuality and account for about 70 percent of business startups. They are somewhat skeptical, have a “believe it when I see it” mentality and are both independent and diverse. Gen Xers have families, careers, a lot of stuff and a lot of debt to go with it.

Reaching this generation may require you to subdivide them into two groups: 30s and 40s. All of them are in their prime borrowing years, but 45 percent of them have so much debt, they may never retire. If you can help them turn that around, you may have them for the rest of their lives – particularly those approaching 50. They want to retire some day, and those with kids need money to send them to college. Helping to make them more financially stable with considerably less debt will be important if they have any chance of making these dreams a reality. In essence, you will need to convince the older half of Generation X that it’s time to become a generation of savers, at least more so than they are today.

This should not be a difficult sell if you communicate with them in a very real and authentic way.

Gen Xers don’t want hype. They don’t want marketing slogans that promise one thing and deliver another. They want information, education, variety and options. They want real solutions to their financial obstacles, and they want realistic steps to help them achieve their financial dreams.

Provide the products and services that will help get them out of debt or help them turn around troubled finances. Give them free educational seminars, but not necessarily in person. Offer them in the form of webinars or web videos. Educate them about investments and help them recover some of the retirement savings they have lost in this unstable economy. Offer products and services that support their dreams of entrepreneurship.

The August issue of my e-zine includes a detailed article about Generation X and how credit unions can capture their business. In it, you’ll also find information about credit unions already offering some of the products and services referenced above.

Help Young Workers Crash Your Credit Union

 

I had the opportunity earlier this month to speak with the “Crashers” at the Louisiana Credit Union League annual meeting. According to their website, the crashers are “a group of young credit union professionals catalyzing the movement through meetups, development project, online collaboration and mentorships.” Most of the crashers are under 30 and working in a credit union.

I didn’t do a formal speech with notes, PowerPoint presentation and handouts. That is boring—and the Crashers don’t do boring. Instead we just chatted for about 30 or 45 minutes. I could choose the topic so I wanted to talk about their career development and generational issues.

It took all of about five minutes to realize that while many of those young people are extremely enthusiastic about the credit union movement they are at times equally frustrated with walls they hit at the credit union. Many felt their ideas hit deaf ears. Some struggled with supervising older co-workers. And all wanted to develop their careers more.

There is a definite generational gap in the credit union workplace. As credit union leaders, we need these young people. We need the crashers. They can improve (“crash”) our credit unions—but not on their own.

Here are ways you can help young workers “crash” your credit union:

1. Listen—to their ideas. And don’t just give lip service. When possible, implement their suggestions. And be sure to give them credit for their ideas. Don’t be quick to say “no way.”
2. Include—someone under 30 in your strategic planning session. More than likely, one of your strategic initiatives at your credit union is to get young. Your best source for this target market are those that are actually in the target market.
3. Mentor—your brightest young stars. I wouldn’t recommend a “formal” mentorship program, however, take time to meet informally with younger co-workers. Pour your life into theirs.
4. Train—conduct generational training. Three generations (Baby Boomers, Generation X and Generation Y) are all colliding together in the workplace. The better we understand each other the better we will work together.
5. Feedback—Give feedback on a regular basis. The number one thing young people need at the office is feedback. And I’m not talking about yearly performance review. Have weekly and project by project comments on how they are doing.
6. Challenge—Give them a project that is too big for them or a goal you don’t think they can reach. Let them prove you wrong.

Baby Boomers and Generation X sometimes see these young 20-somethings as annoying and self-entitled. While Gen Yers are certainly not without their faults, they do bring a great deal of energy and enthusiasm to your credit union. Let’s use their skill set to “crash” our credit unions.

Connecting Through Credit Unions

 Note: This month marks the five year anniversary of my father’s death. Below is a modified/updated version of a “Letter to the Editor” I submitted to Credit Union Times upon Dad’s passing. As you will see, my father and I are connected through credit unions. Credit unions are not just financial institutions: in some ways they can even connect a father and son.

 

 

 

 

As we begin a New Year in credit union land, it is often appropriate to also look back on the previous year. I will always associate 2006 as the year my father and credit union pioneer, John Arnold, passed away. While the pain and grief is still tender (even five years later), I am filled with pride for my dad and reflect that our careers are somehow linked together just as our lives always will be.

One of the fondest memories I have about my father is reading and discussing articles from the Credit Union Times. Whenever my wife and I would go by Mom and Dad’s (invariably to drop off the grandkids!), Dad would often be sitting in his chair reading the Credit Union Times. He would always get his copy before me because my office copy would arrive weeks late after being circulated to my co-workers.

There is a great line in the movie City Slickers where Daniel Stern’s character is fondly remembering his father. He says, “When my father and I couldn’t talk about anything else we could talk about baseball.” For me and my dad, our version of “baseball talk” was credit unions. If we couldn’t talk about anything else, we could always talk about credit unions. In many ways, my dad and I connected with each other through our credit union careers.

We often knew some of the same people. We’d catch up on credit union gossip: who was at particular credit unions and how they were doing. He’d tell old war stories about so and so and I’d keep him up-to-date on what issues credit unions were facing today. Of course, Dad always offered sage advice on my credit union career (whether I wanted it or not!).

People would often say, “Are you John Arnold’s son?” While some would feel it might get old being asked that, I learned to embrace it. I understood that was who I am. Yes, to a degree I’m a credit union legacy.

Dad’s home subscription to Credit Union Times came up for renewal recently. When Mom sadly handed me the renewal notice, I paused for a few minutes wondering what to do. It was a bitter thing to see, another reminder that I had lost my father; another reminder that I would not be able to talk credit unions with him.

However, instead of letting the tears form I chose to do the only thing I felt was appropriate. I went online and renewed the subscription, changing the name and address to my information. It is one minor way to continue my dad’s memory. And one of the first things I did when I formed On The Mark Strategies was subscribe to multiple credit union publications, including the Credit Union Times.

So I encourage all you credit union executives out there to share your professional reading with your children. Share the Credit Union Times. Pass down your credit union love and career to your children. Who knows, maybe one day you can connect with them through your own careers just like my dad and I did.

Five Key Gen. Y Traits Credit Unions Should Know

Credit unions need to reach Generation Y to survive in the future. Duh. Since credit unions’ average membership age is 48 it doesn’t take a rocket scientist to figure out where credit unions will be in five or 10 years if they don’t penetrate the up and upcoming Dot Com Generation. Credit unions will be dead.

Multiple dates are used when it comes to the various generations. According to Strauss & Howe, the leading demographers of our country, Generation Y are those born between 1982 and 2003, so they are currently between the ages of eight and 29. There are approximately 78 million Gen Yers in the country. There are many traits that describe this key demographic, but here are some of the most important (at least for credit unions to consider):

(1)    Diverse

The key word to describe Generation Y is diversity. “Gen Y is the most racially diverse population in our nation’s history,” notes a Filene Group special report. Those younger than 18 are twice as likely as adults to identify themselves as multi-racial in the census.

• Credit union application: Make sure one of your target markets is a racial minority (Hispanics, African-American, etc.).

(2)    Media savvy

This generation of teens and twentysomethings is the most marketing-savvy group ever. They are multi-tasking masters: they play video games, talk on the phone, text message and watch TV—at the same time! They are also incredibly hip to what marketers are trying to do: brands that are real and authentic will connect with this group.

• Credit union application: Ditch the hype and pitch the value. Don’t rely on one medium to reach them.

(3)    Family oriented

“We are seeing a closer relationship between generations than we have seen since World War II,” says Jeffery Arnet, a University of Maryland psychologist. “These people genuinely like and respect their parents. According to Monster College, 69% of college students reported they planned to live at home after graduation and 21% said they planned to remain there for more than a year.

• Credit union application: Use the parents as an entry point to Generation Y. To see more detailed action steps for this point, check out the post “Reach Gen. Y Through Mom and Dad.”

(4)    Technology driven

Forrester Research notes that the Internet is now an integral part of a young person’s life (just as previous generations came to depend on the automobile and television). And just as cars and television triggered significant social shifts, Forrester suggests that what it calls the “Net-Powered Generation” will come to expect certain privileges as consumers.

• Credit union application: Stop talking about technology products and start implementing them. These include live chat support, account to account transfer (outside your institution), text alerts/messaging, and mobile banking among others.

(5)    Financially smart

We sometimes cast the young as financially naïve; that would be a mistake with Generation Y. Recent statistics indicate that 37% of Gen-Yers expect to start saving for retirement before they’re 25. Among those eligible, 70% of Gen Y respondents in a recent retirement survey indicate they already contribute to their 401k plans.

• Credit union application: Don’t talk down to people from Generation Y (even if they dress funny and have multiple tattoos!). Most importantly, give them information and not a sales pitch—they’re smart enough to figure out what to do.

To learn more about Generation Y and how to reach them, be sure to attend the webinar, “Why Y: Strategies to Reach the Dot-Com Generation” on June 22^nd. This inexpensive webinar offers an extensive overview of the Dot-Dom Generation, practical ways credit unions can market to Dot-Comers and financial products Dot-Comers find appealing.

Reach Gen. Y Through Mom & Dad

 

Credit unions know they must get younger. Decreasing the average age of your membership is a strategic goal for many credit unions. There are several initiatives, such as Young and Free, that are having a great deal of success. The Filene Institute also has given many ideas for penetrating this key target market.  You can also check out the post “How One Credit Union Keeps Membership Age Low.”

While directly marketing to Generation Y should be a major strategic initiative, one tactical approach credit unions can implement is to reach Generation Y through mom and dad. As a parent of two teenage daughters I can attest that many kids begin their “banking” experience with the First National Bank of Mom and Dad.

As Jeffery Arnet, a psychologist from the University of Maryland, says, “We are seeing a closer relationship between generations than we have seen since World War II. These young people genuinely like and respect their parents.”

According to research from CUNA, there are 19.1 million nonmembers under the age of 18 who live in a credit union member household. In other words there are over 19 million kids under the age of 18 whose parents are credit union members but the kids aren’t. Can you say opportunity?

Ways to reach Generation Y through mom and dad include:

• Offer relationship pricing by household and not individual (design the program around the entire family’s accounts).
• Offer loan discounts for the parents if they get an auto loan for the teenager at the credit union.
• Promote linking all the accounts together (where mom and dad can transfer funds from their account to the teens’ account—remember mom and dad are often human ATM machines).
• Provide educational materials on finances for parents to share with their kids; try and make as much of this online as possible.
• Develop a membership marketing program encouraging mom and dad to open a credit union account for their teenagers.

So when thinking generationally, credit unions can use Baby Boomer and Generation X parents to reach their Generation Y kids. The bottom line is don’t forget about mom and dad when reaching Generation Y.