MADISION, Wisc. - Credit unions are losing out on opportunities if they don’t address their generation gap, reports CUNA Mutual.
Pointing to CUs’ low member penetration among 18- to 34-year-olds and those over 65, Jeffrey Hunt, consumer program manager for CUNA Mutual Group, will offer strategies during Credit Union Journal’s Grow Show April 27-29 for reaching those demographics. “Credit union leaders need to make sure they pay attention to these two generations and understand the importance of actually having a strategy to reach them,” Hunt said. “Otherwise they might eventually find they missed one of the largest opportunities in their lives.”
In the past it hasn’t been as important for CUs to have retiree programs, according to Hunt, because many individuals over 65 relied on government programs. “They didn’t live as long, they had a pension and Social Security, and healthcare was provided by their corporation. And if credit unions didn’t do as well with this group it was not a big issue. Baby Boomers’ financial resources are much more diversified and complex.”
The same lack of emphasis has applied to youth programs, Hunt said, with CUs looking to pick up young adults as they enter the work force. “Today, the group that credit unions do well with–the working age–is the smaller of the generations and not as rich as Baby Boomers,” Hunt said.
“I’ll talk about understanding some of the key factors that influence both age groups and how you build a strategy around them,” he said. “There are some specifics credit unions need to start acting on now.”
A key to reaching Baby Boomers through marketing or one-one interaction is to look at them as if they are 15 years younger than their current age, Hunt advised. “Boomers don’t see themselves as old, and they aren’t at the same stage of their lives as their parents were at their age because of changes in medicines and life expectancy.”
Baby Boomers also want products that can be customized, Hunt said. “Even if the instrument is complicated behind the scenes, they want something that’s easy for them. They don’t want to have IRAs in one place, CDs in another, and a brokerage account somewhere else. If we can design products that put everything in one place and make it easy for them to live the life they’ve been waiting to live, the member and credit union will benefit.” While Gen Y doesn’t have nearly the buying power of Baby Boomers, it can be a group that’s incredibly loyal to brands. Hunt advises credit unions to bring them in now because “it will cost a lot of additional money down the road to dislodge them.”
Among the efforts Hunt recommended are standard approaches, like providing college funding and auto loans, and leveraging online banking and the CU’s website. But in reaching out to this segment, make sure the member experience is outstanding because of this generation’s heavy reliance on social networking.
“They are very plugged in and are constantly communicating with each other,” Hunt said. “If you convince them they’ve had a great experience you may reach hundreds if not thousands of potential customers.”
