According to Equifax, Baby Boomer households represent both the largest portion of the nation’s current household population (37.5%) and investable assets (45.5%). In total, they hold $14.5 trillion (yes, trillion!) in investable assets. At conference receptions, I am often asked about serious matters of member service and growth: “Our members are getting older. What more can we do for them? How do we bring their kids or grandkids into the fold?” While focus seems to be on millennials because of their future lifetime value, attention to your older member base can increase participation and attract growing family members into the credit union family.
To succeed, credit unions must first show older members that they understand the journey ahead. Then, show them how various products and services can enhance or enrich this journey. The old static days of taking existing savings or checking accounts, slapping the word “senior” on them, and calling it a day, are gone. Credit unions need to pivot to immersive, dynamic content and resources that provide answers and direction. As the great entrepreneur Jim Rohn is known for evangelizing, “Only by giving are you able to receive more than you already have.” Nowhere is this statement truer than in today’s digitally engaged and research-hungry consumer who also craves the personal touch credit unions are known to deliver above and beyond traditional banks.
“Serving the experienced, older member requires a shift of thinking from ‘product-pushing banking’ to ‘journey-driven banking'” says Elias Papasavvas, CEO of Second Act Financial Services, a FinTech in Alexandria, VA, which helps financial institutions map the 50+ consumers’ journey and present banking programs throughout the various life stages of older consumers. “The older member may have children in college or grandchildren spanning all ages. They may be looking at downsizing to ranch-style homes or any one of a number of retirement communities, from active adult communities to Continuing Care Retirement Communities. They may have older parents for whom they need to find a senior living community or in-home care. They may want to plan some travel after decades of hard work. They don’t want to talk about mortgages or more credit and debit cards. They want to find an ecosystem in which they can explore and learn with informative content and useful direction for the life stage presently top of mind. Only after they have arrived at their lifestyle decision, are they ready to think about products. Success lies in the order of things, in the micro-segmentation of one’s life stages.”
For example, grandparents may be basking in joy at the news of a new grandchild. In today’s digital world, grandma may be hopping onto the internet to research baby strollers, baby clothes, and oh, perhaps setting up an account to start saving for that college education. The old static way is to offer that account and stop there. Today’s dynamic way calls for monthly or quarterly content for the grandparents about helping a child develop responsible money habits. Such content may be useful in teaching their grandchild as it grows. For example, grandpa wants to teach his teenage granddaughter how debit and credit cards work before she heads to college. So, he introduces his credit union to his granddaughter and establishes a joint bank account with a joint debit or credit card. His credit union then sends him content targeted to responsibly using debit and credit cards, and he shares it with his granddaughter, who has her sights on college and freedom!
Another example comes from a Canadian banking institution, which found success by recognizing the lifestyle changes of newly retired members. The bank realized their older members frequently “winter” in southern states and that they sometimes purchase a second home in the United States for this purpose. They created a special travel program with debit and credit card options, a special toll-free number for their members while in the United States, and a mortgage program with expedited attention and service to seamlessly finance the purchase of a second home without hassle. As a result, sales per customer more than doubled, the attrition rate dropped by nearly 50 percent, and net income grew by 75 percent.
The COVID pandemic accelerated older members’ adoption of digital engagement out of necessity. This digital engagement requires a two-fold strategy. Stage one is to identify the life stages your credit union wants to speak to and for which you can provide products as solutions. Stage two is to provide targeted content and suggested solutions in an easy-to-navigate, fun, dynamic, digital and personal experience.
“There is a massive opportunity for mutual delight with older members” states Jeff McPherson, Chief Digital Officer and Partner at SilverTech, a digital marketing and web development agency in Manchester, New Hampshire. “We often hear from credit union clients that they want to improve the online experience for the younger generation. But really what they should be looking at is how to improve the online experience for all generations. Older generations have so much life experience and knowledge they can share to influence younger members, but sometimes they struggle with technology. When you create a website that not only offers features and resources for all generations and make it super simple and straightforward for older generations, it’s a win-win.”
There is gold to be mined in the golden years. You just have to know what to look for and how to mine it!