More community bankers could expand their customer bases by target marketing products to specific age groups, experts say.

So-called life-cycle marketing isn't new, but it can give community banks a competitive edge.

"It's critically important," said Kristina Laughlin, vice president and director of marketing at $500 million-asset First Merchants Corp., Muncie, Ind. "The product difference between banks is so small, our approach to selling those products has to be tightly niched."

But many banks are not marketing the right products to the right age groups, said Thomas E. Mitchell, Senior vice president of Spectrem Financial Network, a third-party marketing firm based in State College, Pa.

"They're trying to sell CDs to 20- and 30-year-olds, and that's the last thing they're buying right now," he said.

Or "they're marketing senior citizens clubs. That's who their clients already are."

A good marketing plan addresses the needs of each generation, Mr. Mitchell said.

Older customers want tax savings through safe vehicles as they plan for retirement.

Baby boomers will take more risks but also want tax savings, and younger people favor more nontraditional products, he said.

Banks also should consider the needs people have at various times in their lives, such as home purchases in early to mid-career.

Still, not everyone in a given age group has the same needs, said Dale Dreischarf, a senior consultant in the banking group of EDS Management Consulting Services in Rosemont, Ill. Bankers must research the specific segments in their own markets, he said.

To do so, marketing consultants, not surprisingly, recommend hiring consulting firms. They also suggest using university students and examining demographics already available for community reinvestment act purposes.

Bankers also can use data bases of customer and market information to shape detailed profiles and lists.

Lyle Shughart, senior vice president of $1 billion-asset Harris Savings Bank, Harrisburg, Pa., said he intends to do more "cradle-to-grave marketing," by manipulating his data base to look at life-cycle needs in his area.

To attract or keep customers in different age groups, many community banks already have changed their products and services.

The plethora of seniors clubs Mr. Mitchell cited do serve a purpose to keep customers happy and get to know them better, said Ms. Laughlin, whose bank runs one.

But community bankers must know other age groups too, because when older customers die, they transfer their wealth to people with different saving and buying habits, Mr. Mitchell said.

First Merchants is targeting the youngest group of all -- children -- in hopes of cross-selling to young parents, as well as building future business, Ms. Laughlin said.

The bank is marketing savings accounts to children using a Bankers System creation, "Moola Moola and the Money Minders."

Young adults, whose needs tend to be basic, are a hard market to snare, she said.

First Merchants also has a new direct deposit program through employers to compete with credit unions for new wage earners, she said.

Wayne Bank, Honesdale, Pa., has expanded its product line to include annuities, mutual funds, and financial planning to do more life-cycle marketing, said H. Richard Ishler Jr., president and chief executive of $196 million-asset Wayne Bank.

Community banks "have to be very cognizant of their product lines and their markets and to not rely on what was good 30 years ago," he said.

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