Most credit unions do not employ core marketing strategies according to member segments, but instead primarily focus on marketing by product, according to a new study released by the Filene Research Institute.
Authored by Jinkook Lee and William Kelly, the study, Life Cycle Marketing for Credit Unions: Mid-Age Households, suggests that those credit unions that do segment according to age do so at their own peril, as age segmentation masks large differences within age groups.
"Middle age groups show very large differences in demographics, credit use, and use of different types of financial assets," the study states. The authors recommend that credit union marketers supplement strategies targeted by age with marital status and presence of children.
The study is the second in a series of four publications on life cycle marketing, and probes issues of market segmentation, demographics, and the use of credit and financial assets by this age group. The first of the series on life cycle marketing, Life Cycle Marketing for Credit Unions: Young Households, was released in 2001. The other two studies are to follow.
The study segments 35-64 year old households into five groups: childless singles, single parents, childless couples, married couples with children age 6-17 living at home (full nesters), and couples with children under age six living at home (delayed full nesters).
According to Filene, they then examined the differences in financial service needs among the five groups.
"Each of the five life cycle categories has distinctive characteristics, both demographically and in its use of financial products and services," the authors said. "Marketing to each of the categories based on its needs makes more efficient use of marketing dollars and serves these households better."
