Banking in the age of Millennials
No matter who we are and where we come from, every single one of us is a consumer. However, it should be noted that not all consumers have been created equally. In the ever-swaying balance of the marketplace, one demographic clearly holds more weight than any other: Millennials.
Write off all 19 to 35 year olds as entitled, technology-obsessed narcissists if you will. But the fact remains that not only are they already using their influence to create significant change, they’re poised to become the largest group of consumers the U.S. has ever known. Now the largest generation, surpassing Generation X and the Baby Boomers, Visa expects Millennials to represent 75 percent of the U.S. workforce by 2025, eclipsing all other generations in income.
No doubt about it, Millennials are a demographic worth pursuing.
However, in addition to the unprecedented leverage that they currently have and will have well into the future, Millennials are so much more than their simple, selfie exteriors. Long familiar with card technologies and payment products, Millennials have been slow to adopt – but quick to snub – the latest enterprising efforts to gain their endorsement. When considering the effects of nature versus nurture, as a population, Millennials are completely a product of their environment. They have adapted to a world that constantly bombards them with information, more so than any generation before them. It’s all they’ve ever known.
And with more information, Millennials have had more practice sorting through the myriads channels of information than any previous generation, making them a highly critical population. When weighing the price of technologies, data privacy, invasive marketing, and fees, the Millennial generation can be a picky bunch. However, despite their selective, non-traditionalist tendencies, once Millennials have made an informed decision, they often remain very loyal to their choice.
So what attracts and retains the Millennial to your financial institution?
Data shows that rewards are popular among Millennials. Rather than pay with cash, currently, 38 percent of Millennials are using cards specifically to reap the rewards of card programs. According to Goldman Sachs research, Millennials are less inclined to ownership and more concerned with experiences, which places high value on rewards such as travel miles.
Once they’ve made the leap, Millennials are apt to invest further in your institution. Rewards give them a compelling reason to choose your card, but increased loyalty can prompt them to investigate more card programs and additional financial services that your institution offers. Millennial cardholders may self-establish an advantageous and trusted relationship with your offerings, opening the door to gaining further rewards for both you and them.
Although the oversaturated state of the marketplace requires you to work harder to reach each new Millennial, once you’re able to establish that relationship, the Millennial cardholder will be one who stays. Clearly, Millennials are a population you won’t want to miss out on. So keep working for an understanding and then courting the Millennial audience, and you’re sure to find how their loyalty entitles your financial institution to the many ongoing advantages.