Lessons From The X and The Y
BOCA RATON, Fla.-As Generations "X" and "Y" enter their borrowing years, and "Baby Boomers" become "Matures," segmentation will be key to member attraction and retention, Felicia Schoenenberger, CUNA Mutual lending education consultant, told the meeting.
Schoenenberger told about 100 credit union staff that not all members of a generation are alike. And she made her point in a role-playing skit, donning pink hair and simulated body piercings. Using herself and her co-presenter, Bill Klewin, CUNA Mutual lending assistant VP, as examples, Schoenenberger said that although she is a "Gen-Xer" and Klewin is of the "Baby Boomer Generation," they both have children the same age-and similar borrowing needs.
"Segmentation is part of a process that will ensure members' lending needs are met. It turns a staff 'order-taker' into a lending consultant. And, when credit union lenders act as consultants, it creates what we call the 'WOW' Experience.' "
Schoenenberger said the "WOW Experience" leads to loan growth, increased product participation and even new- product development. In addition, training your staff to become lending consultants can also increase fee income (even more important when rates are low); increase product penetration, and increase member satisfaction through tailored products and services regardless of generation.
"There are many ways to segment," Schoenenberger said. "We often think of demographics but there are geographics, life stage, product and service needs, and unique customer needs as well. What is important is that credit unions segment from a member point of view."
The segmentation process has three stages. In stage one, credit unions seek to know their market. Stage two centers around members and transactions. Stage three segments the market when CUs determine member needs, like why an item is purchased. At this stage, like-minded members are combined.
Klewin said to meet individual member needs through segmentation, lending staff will need to be trained to change their behavior during the loan event. "They'll need to look for clues to current member lending needs," he said.