Most banks know that Millennials have their own unique preferences and communication styles that are different from other generations. What banks may not know is how to leverage these preferences in ways that can increase revenue and generate new business.
A newly published FICO Banking Engagement Survey Report provides insight about how Millennials bank and identifies some of the best ways for banks to meet the opportunity that this new and growing customer segment presents. The report captures findings from a recent FICO survey of nearly 1000 US bank customers.
The survey results point to how Millennials tend to seek recommendations from friends when making a banking decision. They, in turn, are more likely to recommend their banks than any other age group. Of course, they leverage digital channels for this research and sharing.
And with Millennials’ youth comes a more transitory nature. The survey indicates that Millennials are five times more likely to close all accounts with their primary bank and switch to a new one.
Understanding what makes Millenials tick is an important first step in creating marketing campaigns that work. But how do banks align tactics with these insights? Here are three considerations:
- Acquisition Millennials are more inclined to close all accounts in their primary bank and switch to another. While this should be a call-to-action for banks to increase loyalty-building efforts, it also points to an opportunity. Banks should consider that Millennials make ideal targets for new customer acquisition.
- Word of Mouth Given Millennials’ reliance on word of mouth and recommendations to support their banking decisions—as well as their tendency to recommend their own bank—banks should look at ways to leverage recommendations in their marketing campaign tactics. Consider including online sources of shared financial information and recommendations, leveraging testimonials, and developing incentivized tell-a-friend programs.
- Digital Channels Millennials use a range of devices and expect banks to have apps. Additionally, they are more likely than other age groups to seek information about banking products from digital channels. These include bank websites and financial websites. Millennials share recommendations within their online network, and when making decisions, they turn to these same channels for research—specifically social, email and television. Thus, it’s important that banks develop integrated marketing campaigns that coordinate between the key channels that Millennials frequent.
This is the first in a series about Millennials and banking. Stay tuned for our next post in which we reveal a few key facts about how much more likely Millennials are to switch banks.