Credit unions should abandon the marketing of products according to a member's age and instead market according to where that member is positioned in terms of life cycle stages, according to a new Filene Research Institute report.
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The report, the last in a series of four examining segmentation by life cycle, reiterates a theme expressed in the first three reports: "age alone has significant drawbacks as a way to segment a credit union's membership for effective service and marketing. In particular, marital status and the presence or absence of children in the home are key factors marketers can use to determine member needs."
The study, entitled "Financial Product Use over Household Life Cycles: A Guide for Credit Unions" compares product use and financial status for life cycle marketing for credit unions, was authored Jinkook Lee and William Kelly, and addresses issues of market segmentation, demographics, and the use of credit and financial assets by a total of eleven discrete consumer groups of 15 different types of financial products, of which 10 are traditional credit union products and five are nontraditional.
"The eleven life cycle stages create distinctive groups that serve as effective market segmentation groups," said the report's authors. "That kind of marketing strategy serves members more effectively by tailoring products and communications more closely to their needs than strategies that treat all households alike."
The first three volumes in the series of reports dealt with specific age groups, the young, mid age, and seniors.
To consolidate the information in those reports, Filene said the new study compares life cycle stages across all ages in the use of consumer financial products.
Copies of Financial Product Use over Household Life Cycles: A Guide for Credit Unions and other Filene monographs are available free to Institute members; $100 to non-members. For information about Filene studies or on becoming a member of the Filene Research Institute, call 608-231-8550 or visit www.filene.org.
