Reviews and referrals: Attracting millennials to your credit union

In our recent credit union marketing survey, we learned that credit union marketers across the nation are interested in attracting a youthful demographic.  No big news here: especially since the average age of a credit union member is 47 in the United States and 53 in Canada, and that despite warnings to the contrary millennials continue to be willing to conduct their finances with traditional institutions like banks and credit unions.

So credit unions want to attract millennials, and millennials are willing to bank with credit unions.  What’s the challenge?

Well – apparently – digital marketing efforts in the credit union sector continue to lag modern marketing trends, making it more challenging for credit union marketers to reach this critical mass of millennials – 92 million of them in the US alone.

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In fact the survey results showed us that credit union marketers are holding onto the belief that traditional marketing methods like Direct Mail (89% of respondents) Radio (64%) and Billboards (59%) are still effective marketing methods, when these methods are clearly not the way to reach millennials.

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While millennials still consider TV to be a primary source of brand influence over them, radio and billboard score dead last amongst ideal media via which millennials can be reached and influenced. A recent Instabrand survey showed that 91% of millennials would consider buying a product if a friend recommended it.  But as we’ve learned very few marketers are using referral marketing to grow their member base despite it being considered the most effective means to attract new customers.

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If word-of-mouth and referral marketing are the right means to attract new customers, will referral programs be as effective at attracting millennials for credit union marketers as for every other age bracket?

We were interested in learning whether or not consumers across all age groups acted in a similar fashion when it came to reviewing and referring products and services.

If middle-aged members will refer their friends to your credit union, will millennials do the same?

We conducted a survey to find out whether millennial consumers are more or less likely than other age groups to post and read online reviews, to make referrals, and to make purchases as a result of referrals that they receive from others.  We were also interested in understanding if more mature consumers behaved measurably differently than millennials when it came time to make online referrals, reviews and recommendations.

Are millennials more or less likely to post online reviews?

Across all consumers, the percentage of people willing to post an online review still falls well below 50%.   In fact, as you’ll see below, more people value online reviews than are willing to post them … (representing an interesting gap in expectations). But when we segment by age group, some more interesting trends emerge.

Perhaps not surprisingly, the combined millennial demographics (18-34 years old) are more likely to have posted online reviews for products and services than consumers that fall into Generation X or Baby Boomer cohorts.  Amongst millennials themselves, 18-24 year olds are more likely to have written online reviews than 35-54 year olds, with “older” millennials aged 25-34 being the most active group.

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Still, with more than 30% of 35-54 year olds comfortable with the idea of posting online reviews, statistically this shows that credit unions can rely on a broadening swath of their customer base to feel comfortable with the idea of making an online review of the institution even though this practice is not yet mainstream.  This represents an opportunity to solicit reviews and recommendations from all customers that can be shared in digital marketing campaigns.

Are online reviews important to millennials when making a purchase decision?

Similarly, when asked whether or not online reviews are important when making a purchase decision, well over 40% of all participants indicated that reviews were important, with more than 60% of those people in the millennial cohort indicating that online reviews are important.

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It’s clear that when it comes to attracting millennials to your brand, this represents a great opportunity to solicit reviews from millennials, and to publish reviews to millennials. These are solid methods for attracting new customers from this demographic.

Will millennials participate in referral programs?

What about referral behavior?

48% of millennials say word-of-mouth influences them more than TV ads. For credit unions looking to save money on their advertising budget, this is good news indeed.  When it comes to word-of-mouth marketing – also known as referral marketing – millennials are just as likely to make referrals as any other demographic.  In fact, youthful millennials aged 18-24 are 16% more likely to have referred their friends and family to products that they’ve eventually purchased.  Only seniors aged 65+ are near as likely to have made a referral in the past resulting in a purchase.

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Across all demographics, it’s clear that consumers are comfortable with the idea of making referrals; with over 50% of all respondents indicating they’ve done so.

Then we inquired whether or not consumers were likely to act on referrals they’d received.    Making a referral is one thing, but making a purchase as a result of a referral from a friend or family member is another.  Clearly however, the results speak for themselves: In our survey, more than 70% of our survey participants indicated that they’d made a purchase based on the recommendation of a friend or family member.

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So how do results compare when we segment by age group?  Easy answer: It’s virtually the same across all age ranges:  18-24 year olds are just as likely to have made a purchase on the basis of a referral from a friend as consumers aged 45 plus.  Statistically speaking, referrals and recommendations from friends are valued by the majority of consumers.

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This is good news for Credit Union marketers.  With credit union customer satisfaction at 92%, credit unions have a highly engaged and loyal customer base to draw upon.  And with millennials responding positively to reviews and recommendations, and willing to both make referrals and make purchase decisions based upon those referrals, credit unions can now leverage some of the lowest-cost and most effective marketing methods to engage with millennials.

It should no longer be challenge for savvy digital marketers at credit unions to convince their executives that modern digital marketing methods should include online reviews and referrals, and could potentially become the lead acquisition strategies for younger demographics.

We’d love to hear your stories about what’s working to attract millennials to your credit union, and how reviews and referrals have made their mark for you.

Neil Parker

Neil Parker

Neil Parker is the VP Product Management and Marketing at RewardStream. Neil has 20 years experience in Product Management and Marketing at companies such as Glenayre, Infowave, Sierra Wireless, Contigo ... Web: rewardstream.com Details

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