Age. Income. Generation. Gender. Geographic location. You name it and marketers can segment it with many demographic tools. The reality is that all demographic and research tools are not created equally. While the examples listed above provide valuable insights, there is another more powerful tool: psychographics.
“Credit union marketers have the opportunity to connect with members and potential members on a deeper level when psychographics are used to make their offers and communications more relevant,” they say in the paper.
So what in the world is psychographics? As the authors note, “Psychographics classifies people based on psychological traits such as attitudes, habits, interests and opinions. In other words, geographic data explains where your member is; demographics explain who your member is and psychographics explain why they buy.”
Key insights psychographics can bring to your credit union include what matters most to your members, what is their attitude toward technology (early adopters vs. laggards), what type of experience are they seeking and what are they desiring from banking?
The white paper explores many facets of this important subject, including:
Creating and defining member segments
Methods of gathering meaningful data
Leveraging data for success
Using psychographics to improve your marketing
One of the best parts of the paper is its use of actual credit union examples, including one from FAA Credit Union. Alison Wolf, VP of Marketing for FAA Credit Union, explains in the paper how they use MCIF, CRM, dashboard analytics and credit scoring models to gather key psychographic data. “We target those who have a propensity of certain behaviors like auto or home buying, life stages, product preferences and credit needs,” Wolf says.
Financial marketers are always seeking more powerful tools and psychographics offers one of the most critical ones available.
Almost every bank or credit union wants to get younger. To reduce the average age of consumers using their financial institution. The average age of membership at credit unions hovers around 48, while the average age of most community banks is not much lower.
Strategically speaking, younger consumers also means more loan growth. Plus, the more young people in your financial institution could potentially translate into a lifetime of future business. While Generation Y balances may not be large, their profitability probably is.
So how does your bank or credit union get younger? It’s start with change. You cannot continue doing business the same way. While you can’t turn your institution into Logan’s Run, where you kill everyone over 30 (or stop doing business with them when they turn 30), the reality is this new generation has new banking demands.
Here are the four changes your credit union or bank must take to get younger:
Change your focus—Stop focusing your marketing efforts to reach older Boomers. We financial institutions talk a good game about getting younger but then we still try and serve people of all ages. If you are serious about reaching the Millenial generation then your strategic plan, your marketing plan and your marketing budget will reflect that focus. Here’s a hint: drop traditional marketing methods and replace them with digital.
Change your rates—As mentioned above, you don’t want to become Logan’s Run. But one way to get younger is to “run off” those older deposits by lowering your deposit rates (at least on CDs and similar products). Are you running your ALM balance sheet to please a select group of older depositors? Then you’re really not all that serious about getting younger as a financial institution.
Change your management team—It’s amazing how much grey hair there is in the “C” suite of most banks and credit unions. And that’s not even talking about board or directors! I speak regularly at bank and credit union conferences about generational issues. When I ask attendees under 30 to raise their hands, precious few do (because they’re not there!). You won’t get younger as a financial institution if Generation Y is not represented on your management team.
Change your technology—The easiest way to reach Millenials is through their parents and with technology. Whether it’s a digital wallet, cross channel banking experiences, or a more robust tablet/mobile app you need products and services geared to young people. Because they live on their mobile devices, this is where you reach them.
Getting younger as a financial institution will not just happen by accident or by osmosis. You must be intentional in your efforts. Your bank or credit union must change.
Highly effective marketing is a key driver of success for financial institutions. Without it, banks and credit unions could have the best products and services in the industry, but nobody would know about them. Too bad marketing is often misunderstood.
Instead of treating marketing as something that generates business, some executives see it as an expense their organizations can’t afford. Most likely, these organizations either don’t understand marketing’s potential, or their organization doesn’t do marketing well.
Successful marketing is not a solo operation. Fancy collateral is nice to look at, but if it doesn’t work in conjunction with other key business drivers, it won’t achieve the desired result. Like any other component of business, marketing needs help to succeed.
Here are some things that lead to marketing success:
Something to Talk About Yes, it’s obvious, but it has to be said. Marketers need something to market, like a product or service. But any ole product isn’t good enough. It has to be something consumers actually want…something that solves a problem in their lives or fulfills a need. Marketers can market the products nobody wants or needs, but that isn’t much different than marketing some of the products being shown on infomercials, which never should have been invented in the first place.
An effective brand also helps. Instead of being all things to all people, organizations should pick one or two things they do well and tell consumers about those things over and over.
An Off-core Differentiator In a saturated market like banking and financial services, being different is no longer enough. You have to be different beyond the core benefits all financial institutions offer – 24-hour account access, no monthly fees on a checking account, low auto loan rates, etc. That’s not to say you can’t market these benefits. You just can’t depend on them to differentiate your financial institutions in consumers’ eyes.
Off-core differentiators are benefits not easily imitated. Credit unions, for example, used to return dividends to members at the end of their organization’s fiscal year. That is something other financial institutions can’t counter.
Read a lot more about this topic in the most recent issue of my monthly newsletter. We include questions your financial institution should be asking, an example of how one credit union differentiates itself and more.
Jumping into what must be considered the lead for “Most Incredibly Stupid Thing Ever Done by an Australian” is 26-year-old Harrison Williams. A few days ago while on a boating trip with friends off the coast of Australia, he decided it would be a terrific idea to jump out of the boat, swim over to a dead, bloated whale and climb on top of it.
If that wasn’t stupid enough, it was only at that point he figured out, with the aid of mates on the boat, that the carcass was surrounded by a feeding frenzy of hungry sharks, including large tigers and great whites.
No one is immune from acts of stupidity. Similarly, no company is immune from these acts. Your bank or credit union is no different. What are some ridiculously stupid things that your bank or credit union might be doing? Things that could not only harm your wallet share but also the most important asset on your books — your brand? Try a few of these on for size.
Trying to cram your message on every social media site. Odds are, you’re spending a lot of time and energy spreading messages where few of your target consumers actually hang out. Social media is great for targeting specific groups. The key is to align the folks you are trying to get with the channels on which you participate. For example, if your bank or credit union was to attract new members from the young female demographic, you might want to consider being on Pinterest.
Pausing marketing because business is good. How foolish is this? If you wait and try to throw together a promotion only when your executive management team tells you it’s time to bring up loan numbers, you’re playing way behind the curve. Instead, consider consistently promoting your brand at all points all year long.
Failing to follow up with your strategic plan. You probably put a lot of time and energy into the strategic planning process. What’s the point if you leave that day or two of closed-door meetings and do nothing with it? Planning is terrific and a vital part of how banks and credit unions operate. However, a plan without follow-up isn’t worth the paper upon which it’s printed.
Hopefully, you’re not doing any of these things. If you are, it’s time to take a long, hard look at your communication strategy. What mistakes have you made in your marketing that might qualify as “surf the dead whale?” stupid? Feel free to share below.
Ask anyone how things are going in their lives and inevitably you get the response, “busy.” A time starvation principle is in place. In a recent survey, 58% of Baby Boomers said they would prefer more free time to more money. My guess is other generations would have similar numbers.
One of the best ways credit unions and banks can reach consumers today is to show how their financial products and services saves time in their busy lives.
How do reach starving consumers? Here are a few tips:
Cut the copy—People do not have time to read your brochures and newsletters. So don’t produce them. Instead use short marketing messages with key bullet points.
Use tech tools—This is the age of do-it-yourself (DIY). People don’t want to wait in a teller line or call your service center. Give them technology tools like mobile deposit capture, a killer mobile app and a robust knowledge base on your website.
Market time saving benefits—As the saying goes “features tell, benefits sell.” Don’t promote loan rates. Instead talk about how fast and easy it is to get approval.
Speed your processes—Stop taking forever to complete certain tasks. Is your bank or credit union as efficient with its policies and procedures as possible? Look for ways to streamline the consumer experience.
Since you are probably starving for time as well, thank you for reading this post. I’m going to stop now so you can go about reaching starving consumers.