Pursuing The Other Succession Planning: For An Aging Membership
You've looked at succession planning for the board and the CEO, but have you considered a succession plan for your membership?
That is what marketing to the "Dot Com Generation" is all about, according to speaker and author Constance Anderson during her presentation at CUES Annual Convention.
"Credit union membership is aging," she said. "Only 7% of our members are under the age of 25, and we know that they are making financial decisions before that. Twenty-three is the average age that young people begin saving for retirement. Once they've got that in place, they will tend to stick with that provider."
But since the average age of board members, CEOs and even marketing directors is well over age 23, reaching out to this important and lucrative group of consumers can be difficult.
The Dot Com Generation is actually made up of two generation groups: Generation X and Generation Y. These are people born between 1965 and 1994, and understanding them will lead credit unions to one simple conclusion: youth marketing is not just about kids clubs any more.
"They tend to be more skeptical. They often are products of divorce or single parents, so kids get a lot of responsibility early," Anderson noted. "Half of all teenage girls ages 14 to 17 do the grocery shopping for their families. During the 80s and 90s more teens worked more hours for pay than ever before. They had to to pay for college. And four times the number of them have student loans compared to college students in 1975."
Dot Commers are also pragmatic planners. "In 1968, when students were asked why they went to college, the No. 1 reason given was 'to develop my personal life philosophy, to find out who I am,'" Anderson related. "Since 1982, the No. 1 reason students cite for going to college: to make more money. This is a practical generation."
Young people are attracted to entrepreneurialism and are financially savvy, with two-thirds of even the teens in this group having a checking account, and 11% owning stocks and bonds. "Sure, these are primarily stocks and bonds that grandma and grandpa have bought for them, but they know what they have and are interested in it," she offered. "Some 700,000 teens played the stock market game online last year."
Not surprisingly, this is a group that wants to do its own research and wants to be able to interact with the companies with whom they do business-they want control over the process.
"Did you know you can call your beer," Anderson asked. "Michelob has put an 800 number of their bottles so you can call your beer. My husband tried it and a young man answered the phone and asked him what he was doing while drinking his beer. He was watching TV, so they asked him what he was watching."
Not only was this a great way for Michelob to do some market research and learn about its customer base, but it also points to something else, she suggested. "For them to invest in the phone number, the people to answer the calls and all that, they must really expect that young men-their primary target market-will call. This is a generation who wants interactivity."
With these generational traits in mind, what should credit unions be promoting to this group?
"Credit cards are early loyalty builders, and you can't wait to do this. Fifty-five percent of college freshman already have credit cards, and the average college student gets 50 credit card offers," she advised. "You can do this better than the others."
And if you start early enough, you have some leverage, she added, citing a program at one credit union that offers cards to teens but makes them sit through a credit class first. "Once they're away at college, it's too late, you're not ever going to get them to sit through that class, but at 16? Yes, they will," she asserted.
She also urged CUs to rethink the target market for first mortgages.
"You all picture a young couple with a couple of kids, right," Anderson asked. "Today's young people are not waiting to get married before owning a home. Fifty-nine percent of young people own a home by age 29. Single people in their 20s and 30s are buying houses, and no one is targeting them."