How to Market Banking to Gen Y

On July 2010, Bloomberg Businessweek reported that “Gen Y lacks confidence about making financial decisions”. Despite stepping up their marketing efforts, investment companies claim that they cannot get the attention of Gen Y.

As an example, Bloomberg Businessweek cites that fewer than 4,000 Facebook users have clicked the “like” button for Fidelity’s Page and about 9,000 have done so for Vanguard’s. Meanwhile 4.2 million people say they like Apple iTunes on Facebook. As another example, Schwab, which began sending Twitter feeds in mid-June 2010, has 277 followers. WholeFoods Twitter account has 1.8 million followers.

Let’s analyze this problem by first realizing that there is a big potential for investment companies to engage Gen Y online, then explaining why social media is not the appropriate media to target Gen Y with banking/investment offers. Last but not least, showing how to market banking/investment to Gen Y.

Gen Y Leads the Online Banking Pack

According to financial technology provider Fiserv, nearly one-half of Generation Y Internet users planned to sign up for a new financial account in the next year.

gen y leading the online banking pack

As the graph above shows, about 80% of Gen Y Internet users are banking online and they are comfortable performing financial transactions on the web that include credit card management and personal loan application.

Facebook and Twitter are not Ways to Market Online Banking/Investment to Gen Y

Consider this:

There may be reporting on the demise of e-mail due to the rise of social media, however college students still see e-mail and SMS as critical mediums for online communication.

Yes, it is hard to imagine but people can do  longer without social networking sites than without email.

More importantly:

Despite their comfort with the Web and online banking, Gen Y is most likely to get advice about financial products from friends and family or a significant other than from an online community.

How to Market Banking/Investment Offers to Gen Y: Email

One thing and one thing only: Email.

However, Gen Y doesn’t want garbage e-mail, spam.

They hate that. The e-mail has to be targeted to specific interests: this isn’t about building a 2 million Facebook Page, it’s about getting a good point across.

  • If you’re a local federal credit union, point out how a student needs minimum requirements to open an account.
  • If you’re a securities online trading service, make it crystal clear how you offer the lowest price for a $500 transaction.

And be goofy.

It may seem a contradiction: A generation of consumers that wants to goof off — but be taken very seriously at the same time. 68% of Gen Y will ask with their friends for advice when making decisions about financial products, so you need to target with a single and powerful selling point in a goofy way.

Who’s doing it right? State Farm Insurance.

Conclusion

Stop spending time and resources with online social networking sites to market banking/investment offers to Gen Y. Instead use email to target Gen Y with a single and powerful selling point in a goofy way.

Damian Davila

Ideas and concepts from Damian Davila, Ecuatoriano thriving in Hawaii. Pro marketer and blogger. Find him at @idaconcpts on Twitter.

3 Comments

  1. Great article Damian! You bring up some interesting points here. Gen-Y clearly is more about having the money to live through brands but not considering about the financial circumstances they will face as they get older, of which should be planning to some sense.

    I do agree that email is an effective way for financial institutions to reach Gen-Y however, there are some great numbers showing great response in email driving traffic to a social media page. So I wouldn’t rule out social media. The problem these kind’s of companies have when trying to acquire new customers is that we join one back and we will stay loyal to that bank. And that’s as far as our financial ever goes until you get older. With that being said, how these companies brand themselves is not exciting and not drawing enough attention to themselves. If anything they should try and act more like a brand as to a bank or retirement fund.

    In any case, it’s an absolutely huge market opportunity here in acquiring Gen-Y. But as long as an old-system remains in an old-system state of mind, we’ll continue to see lack of interest by Gen-Y in this area.

  2. Must admit I disagree with much of the content here. Facebook must be an integral part of any campaign.

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