How Can Credit Unions Attract the Next Generation of Members? CUNA White Paper’s Answers Might Surprise You

With a $50 down payment, college students can borrow $300 from UMass5 College Federal Credit Union to buy a bicycle. Once the loan is paid off, UMass5 tells those students that “we put you in two wheels; now let’s put you in four,” and it works to convert the bike loan into an auto loan.

And then the credit union does something that perhaps only a credit union would do: It encourages its new car-owning member to donate the used bike to a nonprofit organization.

Sure, credit unions need to develop robust mobile apps and powerful online tools. And yes, credit unions need to find creative ways to engage and entertain “Millennials” through Facebook, Twitter and other social media platforms. The key to attracting the next generation of members is absolutely to make it easy for these well-informed and educated young people to find the information, products and services they need, a new white paper from the CUNA Operations, Sales & Services Council says.

“They’re not satisfied with what was or is, but are constantly looking for and demanding ‘the new best thing.’ And the credit unions offering the ‘new best thing’ to manage finances will prove to be the most successful at attracting Millennials as members.”Kelley Parks and Lisa Taylor Phelps, “Retail Strategies to Attract Youth”

But “Retail Strategies to Attract Youth,” by Kelley Parks and Lisa Taylor Phelps, also suggests that credit unions would do well to remember what makes them different from all of the other financial institutions that are rushing to adopt new technologies.

“We very much promote that we are a non-profit financial cooperative,” Jon Reske, UMass5’s vice president of marketing, tells Parks and Phelps. “Members come in for value, but they stay for the values.”

Nearly a third of its new members joined UMass5 primarily because of its values, an independent survey for the credit union found, and 39 percent remained members because of them. Two-thirds said the credit union had their best interests in mind “regardless of the impact it has on the credit union.” And so while UMass5 provides free online banking, online bill pay and eStatements, it also creates loyalty through education – a “How Not to Go Broke in College” class for freshmen, for example, and a “Money Matters” course for seniors about to graduate.

That kind of selfless attention to the needs of members pays big dividends, the CUNA white paper says, because it taps into a collaborative, well-connected and well-networked generation that truly believes it can change the world and will, as it ages, have the power and financial resources to do so.

There is no precise definition of when the Millennial Generation starts and ends, but most experts say it includes those born between 1982 and 2004. “By 2025, this powerful generation will amount to 70 percent of the global workforce,” Parks and Phelps write, and these young members are each likely to borrow close to $1 million in their lifetimes when you consider all the sources of credit available to them.

“Credit unions must position themselves so that they are the financial institution to which (Millennials) turn for the tools and services they need,” the white paper says.

How do credit unions put themselves in a position to attract Millennials? Parks and Phelps interviewed financial-industry experts, credit union executives and young adults to answer that question – and found that it comes down to three words: “Make it easy.”

How easy is it to become a member of your credit union? To apply for a loan? To move accounts from another financial institution to yours? “The most important factor is to make it easy to do business with you,” Brent Dixon, founder of the Cooperative Trust and an adviser at The Filene Research Institute, tells the authors. “If you don’t, there are many alternatives.”

Millennials want the convenience and flexibility of managing their money online so that they never have to enter a branch, the white paper says. They want powerful online tools and electronic services, including mobile deposit, external account transfers, online account opening, check-image and pending-transaction viewing, and a suite of budgeting tools. They want a simple way to make payments to friends. They want the ability to set up and receive alerts about activity on their accounts. And they want to learn how to establish credit and have access to affordable credit as their earnings increase.

Most importantly, the CUNA white paper contends, Millennials want seamless interaction for all of those services across desktop, mobile, car and television platforms, and access to cutting-edge technology such as voice, image capture and geo-location capabilities.

“They’re not satisfied with what was or is, but are constantly looking for and demanding ‘the new best thing.’ And the credit unions offering the ‘new best thing’ to manage finances will prove to be the most successful at attracting Millennials as members,” the white paper says.

The most-successful credit unions will also be the ones who promote their “new best thing” by doing more than just pushing products and services, the authors say. The explosion of social media has altered the marketing landscape, replacing interruption with engagement, reaction with interaction, big promises with personal gestures.

“You must be authentic, show integrity and have a social purpose,” Parks and Phelps say. Use Facebook, Twitter and other platforms to share insightful articles and educational videos, to encourage community involvement, and to invite interaction with contests and questions.

When you use social media, be smart and funny. Be approachable, friendly and outgoing. And never forget what makes credit unions different from all of those other financial institutions that are rushing to post and Tweet and adopt new technologies.

“Because that’s what Millennials are looking for,” Parks and Phelps say. “When quality and price are equal, the most important factor influencing their brand choice is purpose. It is the key to building trust and loyalty among Millennials.”

Kelley Parks is the creative catalyst for gira{ph}, a marketing and branding firm that helps credit unions amplify their efforts to stand taller against their competition. Lisa Taylor Phelps, the sole proprietor of Lisa Phelps Copy Writing Services, specializes in helping credit unions with their content marketing through blog articles, eBooks and other social media. Copies of their white paper, “Real Strategies to Attract Youth: A Blueprint to Engage the Next Generation,” and more than 300 other white papers are available to CUNA Council members for free; for non-members, the cost is $50 per copy. For more information, go to www.cunacouncils.org.

 

Questions? Contact Gary Stein: 503.350.2216, gstein@nwcua.org.

Posted in CUNA, Marketing & Communications.