ST.PETERSBURG, Fla. - Have you created your avatar yet?
Chances are that if you’ve never heard of terms like wiki, widget or avatar, your credit union may be missing out on the opportunity to join a growing number of CUs already marketing financial products the up-and-coming Generation Y.
Exotic terminology like wikis (not to be confused with the Star Wars character) are all part of the new Web 2.0 vernacular used by the Gen Y market segment.
The term Web 2.0 was originally coined in 2004 to describe blogs, wikis, social networking sites and other web-based services that encourage collaboration and social networking–in other words, things that are considered cool in the cornucopia of Gen Y activities.
With credit union growth slowing due to inflation and the exertion of economic pressures and the vast number of baby boomers headed for retirement, credit unions will need to look to Gen Y as a the next source of income to fuel loan and asset growth in the near future.
Intro To The Gen Y Market Segment
According to a Filene Research Institute report, there are almost 79 million (26% of the U.S. population) members of Gen Y between the ages of 12 and 30. Although many of them still live at home with their parents, others are graduating from college and just entering the workforce.
This generation alone spends almost $211-billion annually. The implication for the average credit union is that it stands to lose millions of dollars in loans over the next decade if it does not increase penetration among young adult consumers, according to CUNA analysts.
Further, CUNA’s most recent economic and credit union forecast for 2007-2008 points to steady declines in the number of auto loans, first mortgages and share draft accounts–all products that Gen Y will have need for as its members mature and enter universities and/or the U.S. workforce.
Gen Y is widely viewed as a group that likes to do things on their own timetable. Hence, their gravitation towards “always on,” 24-hour technologies like cell phones, PDAs and Internet-based applications.
“What’s different about Gen Y is that they have grown up with computers and cell phones and that technology is part of their life,” said Susan Follick, a project manager with PSCU Financial Services ProjectNewAge.
“They would rather watch 30 minutes of YouTube than a 30-minute TV program. They are on MySpace, Facebook and blogging. The media tools to reach them are different. If you want to reach Gen Y, you have to go to media areas where they are,” she said.
Follick added that Gen Yers also tend to have better relationships with their parents than Gen Xers. They tend to be more socially responsible and seek out brands that share their beliefs. They also tend to be more racially diverse with one in three being a minority.
And Gen Yers like to do things on their own timetable.
“For 2007, 32.7% of our loan applications were received either at night (5 p.m. to 8 a.m.) or on weekends,” said Patrick Lynch, CUNA Mutual Group’s LoanLink Center operations director.
Today, there are a number of CUs already offering university-based loan and checking products and some CUSOs are offering web-based initiatives designed to help member credit unions reach the younger market of 12-to-18-year olds as their need for financial products grows among this vital market segment.
Web-based Initiatives
St. Petersburg, Fla.-based PSCU Financial Services recently launched a new educational website called ProjectNewAge.com. The site is described as a learning center for the “dos and don’ts” of marketing to Gen Y and provides information on this generation’s unique lifestyles, media consumption habits, brand and media preferences.
The website is part of the company’s New Age Program, which aims to help CUs earn the interest and loyalty of Gen Y’ers.
“The program is set up in three phases,” Follick said. “The first site, projectnewage.com is a resource center for credit unions. Phase two is Giveme20.com, a website that will launch this spring. My hope is that 100% of credit unions will sign up for phase one.”
Follick said that the second phase of the initiative, Giveme20.com, is designed to market to the parents of young members or non-members who would like to join a credit union. The third phase, she said, is going to market directly to Gen Y but as of now, is still under wraps.
The site’s design reflects Gen Y preferences. It provides an array of outbound links to popular blogs and other social media websites focused on marketing to Gen Y and the media tools they utilize, such as blogs, social networking sites, social video sharing and viral communications.
With a new initiative like Project New Age, managers will be closely watching foot traffic on all three phases of the program.
“With phase 2 and 3, we will be measuring click-through’s to credit union websites,” Follick said. “In the case of Giveme20.com, the goal is to promote certain products, manage credit cards and budgets. We can track to see if the credit union is selling products like pre-paid cards to members or non-members and use that data later on.”
