The Secret To Marketing To Gen Z and Millennials


millennials-3-26-19.pngIt’s a constant surprise to see how much opportunity still exists within a customer base for increasing revenue via timely and effective cross-selling. Growing revenue by meeting a greater share of an existing customer’s needs is almost always more cost-efficient than seeking out new customers.

We also see many questions about how best to attract and relate to younger consumers among the millennials and Generation Z.

Fortunately, a well-executed digital marketing strategy can be beneficial in expanding your service to existing customers and attracting new business from among the millennials and Gen Z.

Content Marketing
It all starts with a story. While “content marketing” is a common buzzword, the concept is as old as writing itself: good stories get people’s attention. Content marketing is nothing more than informative and entertaining solutions to your customers’ challenges.

Developing an outstanding content marketing program requires deep understanding of the consumer buying cycle. Referred to as the “buyer journey,” this roadmap of consumer behavior outlines the prominent questions and issues at each stage of the buying cycle.

For example, according to a Harris Poll conducted for the Transamerica Center for Retirement Studies, 71 percent of millennial workers are saving for retirement and 39 percent of millennials are saving more than 10 percent of their salary. Imagine your bank is selling this group IRA’s and want them to come in for a financial planning session.

It would seem like a perfect fit. But not so fast.

A Charles Schwab study showed that millennials hold 25 percent of their portfolios in cash due to worry about the stock market and investing. Bank marketers have an opportunity to educate potential customers on ways to make those savings grow rather than just promoting the “end point” IRA product.

Savvy marketers prepare a range of content for each stage in the cycle and for each channel of their marketing efforts. Blog posts, social media content, video and podcasts work together to place your bank at the forefront of the consumer’s mind through the process.

Paid Online Advertising Combined With Machine Learning
The world of paid online advertising has expanded dramatically in the last two decades. Commonly referred to as “pay-per-click” or “PPC” advertising, there are tools that allow bank marketers to target specific consumer and business populations with uncanny accuracy. This combined with advances in machine learning technology allows banks to deploy efficient campaigns that deliver targeted content and offers when they are most likely to capture attention.

Paid advertising is measurable in ways traditional advertising is not. PPC advertising allows bank marketers to run campaigns on the basis of Return on Ad Spend (ROAS) nearly in real time. Budgets can be increased or decreased if lead costs are favorable. Offers and creative can be tested on the fly using financial results.

User Experience Design
Many articles gloss over the significance of user experience design in favor of touting the virtues of “online banking.” Marketers ignore this facet of customer acquisition and retention at their peril.

The user experience, or UX, does not need to be pretty in order to be effective.

For banks, UX is important in reducing the friction of any financial transaction where consumers spend most of their time online. Rather than simply think of “having online banking,” bank marketers need to measure the rate of sign-up abandonment, transaction cancellation, and other indicators that a bank’s online tools are difficult to use.

Banks that lack the brand strength of large national or regional players and rely on high-quality customer service need to be relentless in making their online banking options easy to use. Asking customers to download three different apps and carry multiple logins is a far cry from the face recognition and one-button interface offered by some of the nation’s largest banks.

Tying it All Together
The need for financial services is lifelong. Consumers pass through a variety of financial stages throughout their lives. Each of these stages contains its own, unique buyer journey.

Surveys and regular email and social media communication can help current customers find answers to their questions at the right time. Intelligent remarketing that drives paid advertising can help your results appear in their web searches and expand their understanding of the full range of services you offer. Thoughtful UX can enable customers to discover new products that solve problems when they first encounter them.

All of these benefits apply to your prospective clients. Being able to precisely target consumers when they are searching for answers means you can capture their attention earlier in the buying cycle.

Frictionless and “invisible” UX allows you to bring those new customers into your product and service ecosystem with the ease that younger consumers expect.

Pat Summitt’s Model on Talent Development


talent-1-16-19.pngWith unemployment at its lowest point since 1969, the competition for top talent is as fierce as it has been in years.

While many experienced banking professionals know well that the industry offers challenges, rewards and opportunities, many millennials and Gen Z’ers remain reluctant to pursue a career in banking.

The high-performing banks of the future will be those that can translate those benefits to attract, develop, reward and retain top talent. There are two places your bank can start this process.

Banks already provide strong salaries, bonus opportunities, health-care coverage and retirement plans. The challenge the industry now faces is how to make the banking industry more attractive to today’s generation of younger recruits.

What a bank should consider includes flexible work hours, the ability to work remotely and cross-training. If the bank can demonstrate a track record and policy of promoting from within, the job opportunity will be even more attractive to a potential hire.
Another recruiting tool we have often used successfully, particularly for younger individuals, is a deferred compensation program designed to help pay down student loans, with vesting provisions that encourage continued employment at the bank.

But once you acquire top talent, how do you develop them as future leaders?

First, an ongoing coaching and mentoring program is critical.

Pat Summitt, the legendary University of Tennessee women’s basketball coach who won more games than any other NCAA Division I women’s coach, recruited talented players.

Once they joined the team, she delivered an individualized plan to improve each player’s weaker areas. She also provided regular feedback and monitoring. This method of coaching and mentoring led to 1,098 career victories and Hall of Fame success as a coach and leader. So, how can Summitt’s approach help your bank?

When developing the bank’s future senior management, the board and the CEO should ensure they agree on both the long-term strategic plan and the necessary skills to execute that plan.

They should then identify the internal candidates best suited to develop and provide them with opportunities for growth. It is important the bank develop a culture of honest assessment of strengths and weaknesses, and provide ongoing mentoring and feedback.

Even with top talent, it is unlikely that Summitt would have achieved the success she did had she provided her players with feedback only once a year.

In addition to an ongoing assessment and coaching program, the bank should discuss a career path for potential leaders, and the company should provide the necessary training and cross training, when feasible, to allow promising employees to learn each facet of the bank’s operations. Thorough training programs can be very attractive in recruitment and are invaluable to the development of a leader.

Once the bank has invested in developing up-and-coming leaders, rewarding them appropriately and incenting them to remain with your bank is critical. No doubt, your competitors will recognize the strong leaders you are developing and actively recruit your talent, requiring your bank to maintain not just competitive salaries, but methods of keeping your compensation programs unique and desirable.

An example is a nonqualified deferred compensation plan that pays in-service distributions at the end of certain periods, such as three- or five-year time frames. This type of plan typically would include performance-based compensation tied to specified goals.

Additional amounts can be credited to the deferred compensation account and distributed at the end of a longer period (such as 10 years), providing even more incentive to stay with the bank.

If the individual terminates before the applicable distribution period(s), undistributed funds can be allocated to hire a talented replacement or credited back to the bank’s income.

We have found these flexible deferred compensation arrangements, when combined with other tools, to be helpful in recruiting, developing and keeping top talent.

An active career development program bolstered with proper financial incentives can help ensure your bank has the right leaders for the future.

The Secret to Lifelong Relationships With Generation Z


customer-12-14-18.pngGeneration Z consumers are positioned to be a significant force in the financial marketplace. This population group will soon begin graduating from college, earning disposable income, and making decisions about managing their finances.

This opportunity is of interest to many financial institutions that will compete for the loyalty of Gen Z customers for the next several years.

Banks that have been active in education lending have well-established relationships with the Gen Z market as customers already, which offers them an advantage. While being a trusted student loan provider is a start, financial institutions that wish to create lifelong customers must build on the initial relationship with technology-enabled products and individualized experiences the Gen Z consumer has come to expect.

The Gen Z Opportunity and Challenge
The impact of Gen Z on the financial services marketplace must not be underestimated. There were approximately 61 million members of Gen Z in the US in 2015, or about 19 percent of the U.S. population. This percentage is expected to grow to 25 percent by 2020.

While both the Gen Z and millennial generations have grown up in an environment shaped by technology, these groups are very different in their approach and use of financial services.

Gen Z has never known a world without smartphones, social media, or on-demand delivery of products and services. Adobe, Inc. has estimated that nearly half of Gen Z consumers are connected online for 10 or more hours per day and their preferences are strongly influenced by social media.

They are likely to conduct many of their daily activities on mobile devices. Also, while Gen Z members reportedly recognize that large financial institutions can offer products and services using advanced technology, they are less trusting of traditional banks than older customers. Approximately 75 percent of the Gen Z population surveyed said they trust traditional banks (as compared with digital payment solutions) – still a strong preference, but less than the 92 percent reported by baby boomers.

How To Win Gen Z Consumers
To win the loyalty of Gen Z, banks should focus on the following areas:

Invest in digital products and a best-in-class user experience. Gen Z consumers are accustomed to conducting business via mobile devices. So any services you offer—credit and savings products, investment services, or access to account information—it must be available online 24/7.

Some day, chatbots based on artificial intelligence (AI) will likely be an important way to connect with Gen Z consumers.

Focus on the right products. Understand which financial products and services resonate with Gen Z consumers. Research by Javelin, a strategy and consulting firm, shows 51 percent of Gen Z-ers do not plan to apply for a credit card, but they do start thinking early about retirement, according to a 2017 study by the Center for Generational Kinetics. For these reasons, your institution may make more headway by cross-selling savings accounts or retirement programs to your student loan customers.

Use social media. Gen Z members rely heavily on social media, so target your digital marketing to genuine influencers on those platforms like Twitter, Instagram, Snapchat, etc.

Foster a spirit of community. Research shows Gen Z members seek community. Being involved in your community through philanthropy, hosting career fairs and educational events are ways banks can appeal to Gen Z consumers.

Market in an age-appropriate manner. Make sure your marketing campaigns are designed and written in a way that will resonate with the Gen Z audience. Since Gen Z values experiences, one idea to consider is a travel rewards program layered on a promotion for a savings account or debit card.

Credit unions, banks and other financial institutions have originated approximately $90 billion in private student loans. That represents a lot of potential for Gen Z borrowers to become life-long customers if you build on those relationships with the right products and services, technology, social media and marketing.