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The 2000 U.S. Census counted 139 million Americans under the age of 35. According to one expert, understanding the events that are shaping Generations X, Y and Z will help credit unions if they wish to succeed with these new generations.

Meredith Bagby, a CNN guest reporter and authority on youth trends, told attendees at WesCorp's Future Forum conference that"generational marketing" is knowing what happened that shaped a generation. Hard factors include macro history, world wars, economic swings and newsmaking events. Soft factors include music, sports, culture, fashion and other nostalgia-related items.

"Credit unions must start early. Students are an underserved market in banking," she said. "After college, most plan to stay with their financial institution. Only 21% say their banking relationship is temporary. If credit unions get to them early on, they build a relationship for a lifetime. To do this, credit unions must support community and family life."

After years of dominance, the "Baby Boomer" generation no longer is the largest generation in the United States. Currently, Generation Y, or "millenials," is the biggest.

Generation X, defined as persons born between 1965 and 1977, comprises approximately 40-million Americans, or 20% of the U.S. population-slightly smaller that Boomers or Generation Y, she said.

According to Bagby, the major events that shaped Generation X include the Iran hostage crisis from 1979 to 1981, the Aids/HIV outbreak in the 1980s that made sex dangerous and scary, the space shuttle Challenger explosion in 1986 that showed technology does not always work, and the dissolution of the Soviet Union in 1991.

"The collapse of the Soviet Union changed the way we look at our country. Boomers grew up in the Cold War, and have a different perspective," she said. "Generation X doesn't remember bomb shelters."

Members of Generation X tend to be skeptical and cynical towards all institutions, are non-joiners, they reject materialism, are self-reliant, not team players, competitive, and pragmatic. They are the most educated generation, as over 50% are high school graduates and 45% have college experience. Forty percent grew up in non-traditional households, either single-parent or divorced.

"They didn't have a 'Leave it to Beaver' household, so they wait longer to get married because they saw marriage doesn't work," said Bagby. "More importantly, because they don't believe they'll do as well as their parents, they are better savers than Boomers at the same age. Generation Xers are putting money away for their retirement."

70-Million In Generation Y

Generation Y-at 70 million strong the largest American generation ever-includes people born between 1977 and 1995. While the oldest members are just entering the workforce, this generation spent $172 billion in 2000, and is in control of the pocketbook at home, Bagby said.

One of the earliest defining memories for Generation Y was the election of Bill Clinton in 1992. "He was a young president; the first Boomer president," she said. "Clinton embraced pop culture by inviting actors and musicians to the White House. He made politics, entertainment and news as one."

Other major events for Generation Y were the 1995 Oklahoma City bombing and the 1999 Columbine school shooting that showed the enemy is within, and the late 1990s Internet boom that created unrealistic expectations.

"These people grew up thinking all they needed was a computer and some web software, and a gray-haired person would give them $100 million for their company," Bagby observed.

Generation Y members tend to be wildly optimistic, team players (similar to Boomers), they hold a "tribal" sense of community, are overscheduled, and are the most connected generation ever thanks to cell phones, pagers, and their own technological savvy. Because of their large numbers, they are in competition for a limited pool of spots in the best prep schools and colleges. Almost half are non-white.

Generation Y grew up with an incredible number of entertainment choices, so they have a short attention span. Bagby said it is difficult to get them to sit down to watch a long documentary or read a thick document-something for CUs to keep in mind when attempting to reach them.

The Three Lessons To Be Learned

In order to market successfully to Generations X and Y, Bagby offered three lessons: speed, selling values and speaking the language.

"Embrace the speed of communication," she said of the first. "Employ viral marketing. With e-mail, wireless, text messaging and other forms of instant communication, things happen quickly. These generations are used to comparing prices instantly online. Credit unions must make their information available."

Product adoption in Generations X and Y takes place from the bottom up, not the top down, she continued. Marketing is not about companies telling people what to buy; it is about people finding things out for themselves. Successful companies place information where people can find it for themselves.

One example of this marketing style is a company that introduced the public to its camera phone by quietly sending operatives to Times Square in New York City. Instead of dressing in company logo clothing and overtly pitching the product, the operatives simply asked passers by to take a picture of them with their mobile phone. When the astonished people asked questions about the camera phone, they were told where they could buy one, never realizing the "man on the corner" worked for the company.

Generations X and Y are more interested in what a company represents, and will avoid a brand if they don't like the company's practices, so selling values is important. "Companies are not just selling a product, they are selling an identity," said Bagby. "These new generations want less flash, more substance."

In order to "speak the language," companies must go to places where the younger generations are. This includes taking the time to watch MTV, she said.

"Young people speak differently than older people. It is important to know what those words are. GAP gets it. It has an ad with Britney Spears, Missy Elliot and Madonna, so it reaches across generations."

Marketing to Generation Y is made more challenging because they are inundated with advertising and know how to avoid it. They navigate around pop-up ads on the Internet, and change the channel when television commercials come on.

Bagby said companies have not yet figured out how to reach them, because they still throw product pitches out there and hope something gets through.

"Credit unions must learn how to market by putting the information out there in a place people can find it for themselves," she counseled.

Looking deeper into the future, Generation Z, also known as Generation 9-11, may be profoundly influenced by the terrorist attacks of Sept. 11, 2001. One theory is they will be overprotected, which might make them risk-averse and, in adulthood, conformist.

"The biggest trend is: global challenges are going local, including the environment and terrorism," said Bagby.

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