Today’s second youngest generation, Gen Z, was born between 1996 and 2010, and runs the gamut. The juniors in the segment are just coming of age, while others are college age or new graduates entering the workforce. The eldest Gen Zers have achieved financial independence and are out in the market opening car and home loans.
Gen Zers are different from their baby boomer parents and even their millennial and Generation X siblings, and it is vital to get a handle on their needs, wants and preferences in order to capture their business. One of the most important things to know: While baby boomers have more wealth and millennials are greater in population, Gen Zers are estimated to have $360 billion in spending power, and according to multiple studies, they are expected to inherit $11 trillion of wealth over the next 10 years.
Frustratingly for credit union marketers, Gen Z is the least likely to stay loyal to their financial institution and the most likely to cherry-pick solutions they can find in an instant on their smartphones. So, what are some ways that credit unions can capture the attention of this powerful generation? Here are three successful tactics for doing just that:
Marketing 101: Go where your members are. Gen Z is online.
Yes, traditional campaigns in print, direct mail, television and radio still have their place, but it’s time to shift to fresh digital media approaches to attract this more elusive target audience.
According to the L.A. Times, Gen Z spends half of their waking hours watching videos online. YouTube leads the platform pack with 247 million monthly viewers in the U.S., with Facebook, TikTok, Instagram and Twitter combining for billions of active users. A huge marketing opportunity exists here. The topics for short, one-to-three minute videos are plentiful. Just a start:
- Using credit cards wisely
- How to raise a credit score
- How and why to start saving for the future early
- Preparing to get a first mortgage
- Open internet and walled garden advertising
For advertising and marketing purposes, the internet is divided into two main categories, walled gardens and the open internet. Walled gardens are sites that require login credentials such as social media platforms. The open internet is everything else online. It’s an important distinction for marketers, because the two channels are typically used very differently by consumers. Both are excellent places to put advertising dollars.
According to Statista, users typically visit social media for entertainment, inspiration and product recommendations from friends or loved ones. People tend to search the open internet for consuming large quantities of information, such as researching and comparing companies. Your content should vary by platform. For social media, entertaining content is the key. For the open internet, more research-driven, business content will give people what they’re looking for.
That said, a recent study reported by The Current pointed out that people spend more time browsing the open internet than social media platforms. Advertising there allows for relevant messaging to reach your consumer. Say a prospective member was browsing on a credit union’s site for a new credit card but left without completing an application. That credit union can continue to serve relevant display ads as they browse through other sites, keeping the institution top of mind, until they’re ready to complete the process.
- Influencer Marketing
Influencers are simply individuals with large social media followings who are great at promoting (recommending) products and services to their audience. They’re the modern day equivalent of a celebrity infomercial personality. And it is a big business: poised to hit $21 billion in 2023. Partnering with the right influencer is a great way for financial institutions to engage with the next generation of consumers in a softer-selling way.
“The right influencers” is the key part of this idea. Researching and vetting should be a top priority before partnering with anyone. Influencers that do not align with your credit union’s core members’ ideals can be a big turnoff. However, there are two recent examples of financial institutions getting this right inside of Alkami’s eBook, “How Banks and Credit Unions Can Attract and Retain Gen Z”.
Tips for finding the right influencer and maximizing that relationship:
- Vetting the influencer carefully. Taking their past posts into consideration, running a full legal background check, and interviewing them personally are all good steps to protect your brand’s reputation.
- Can the influencer convey financial messages? They need credibility, or the right hook. If you’re partnering with a Gen Z influencer who is eager to learn about financial wellness, have them be the “student” learning from a credit union employee.
- Start small. In the two examples discussed within the above eBook, those institutions found influencers to help them with niche audience outreach, thus never needing to worry about upsetting their base.
By adding these three tactics into the overall marketing mix, credit unions are targeting Gen Z members on their own turf. But that’s only half of the equation. Even more challenging is retaining this generation. The first step is for financial institutions to recognize Gen Z’s need for the companies they do business with to be socially responsible and inclusive. Businesses must also acknowledge that this generation has very different technology preferences like best-in-class digital banking access and fintech integrations. Using date insights can empower financial institutions to reach out to this cohort with relevant messaging, meeting their banking expectations.
To learn even more about attracting and retaining Gen Z members, download Alkami’s eBook here.