Financial service marketers are facing two new challenges: Gen Z consumers entering the world of financial services, and Millennials’ evolving their needs. Both require a clear understanding of what these customers want – and how they want to receive it. Learn how to strengthen your financial services marketing for the current and future generations in this blog post.
Future-Proofing Your Financial Services Marketing for Gen Z & Millennials
Generation Z and Millennial consumers are undertaking some of the biggest financial milestones of their lives – from getting their first credit cards to applying for mortgages and managing their student loans. These periods are critical for financial service marketers to connect with customers and build a strong relationship with them. To be successful, financial services marketers must understand where Generation Z and Millennials currently are in their financial journey, how to understand their behaviors and needs, and finally how to build (and maintain) a relationship with them.
Where Are Gen Z and Millennials in Life?
Financial marketers looking to understand how to earn new customers from younger demographics must first consider where those potential customers currently are in life.
Generation Z (mid-90’s to mid-2000’s): These are college and high school kids, many of whom will be experiencing their first taste of financial responsibility. They’ll be taking out loans for college, will have greater management over the money they earn, and will likely be signing up for their first credit card. Unlike Millennials, the greater responsibilities of life haven’t hit them yet, so they’ll be looking for opportunities to make their money go farther on things they enjoy such as eating out (68% eat out once a week according to GrubHub) and traveling.
Millennials (1981-1996): This large and diverse group of consumers has a range of life milestones that they’re currently hitting, from getting married to buying a home and having children. As such, their financial needs vary greatly, which can be an opportunity for the right financial marketer. Millennials have such a wide scope of needs because they didn’t conform to traditional timetables for these milestones, opting to get married and have children later in life. This is because their financial obligations (such as student loans) have caused Millennials to hold off on taking these next steps.
Getting Gen Z Invested
Marketers have two key opportunities when it comes to Gen Z: the opportunity to provide a product that’s relevant to them early in their life, and the opportunity to build a long and loyal relationship.
Gen Z consumers are at the stage in their lives when they’re dipping their toe and testing the financial service waters. They’re going to have a lot of questions, and they may not be entirely certain about what they need or how to get it. Generation Z consumers will be looking for function (such as flexibility on account over-drafting) and incentives (rewards and cash back on purchases), but they’ll need help understanding these things. That’s where you, as the financial services marketer, can help them through your messaging.
Being able to deliver on a message that educates Gen Z consumers by telling them what they need to know about the product or service and what’s in it for them should be a priority for any financial service marketer. But it comes with a catch: you have to be authentic. It’s not enough to simply tell a Gen Z consumer what they’re getting, you have to do it on their level. Financial services must be able to deliver a message that is more than “numbers talk.” Understand who your audience is (beyond “they’re Gen Z”), what they need and how it will impact their lives. You can get started by investing in your data and technology to provide better messaging and more personalized experiences, as well as forming strategic partnerships with publishers who can reach the Gen Z audience.
If you’re able to succeed in this you may do more than win their business – you’re likely to win their loyalty for the long-term. Being able to provide financial services to Gen Z consumers early in their financial journey means you’re able to grow with them as an institution. So when these high school and college students start getting married, looking to buy a house or a car, having children, and possibly even starting their own business, you’ll be able to provide new services that are finely personalized to who they have become. The foundation will have already been laid early on, now the next step is to recognize those “next-step” signs and capitalize.
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Being Mindful of Millennials and Gen Z
This brings up something every financial marketer must be mindful of: the needs of your consumers will change over time. Today’s Gen Z college student who enjoys reaping the benefits of cashback on dining may one day need a mortgage of their own. That means the offers and messaging both must evolve as the customer does. It also means that as consumers hit new stages in their lives, there are new opportunities to acquire them as customers.
This is especially important when looking to acquire Millennial customers, who are currently at various “next-step” points in their life.
Acquiring more established consumers, specifically Millennials, can be challenging. They’re less likely to leave their current financial services partners for a number of reasons, ranging from the risk of having their credit score impacted to the hassle of transitioning finances. That doesn’t mean you’re wasting efforts by targeting financially mature consumers. There are plenty of opportunities to acquire customers who, for example, have multiple credit cards, but need a loan or a mortgage and are shopping for the best deal possible. You must provide focused and personalized messaging that justifies why this customer should change their financial institution for this “next-step” in their financial journey.
How to Build Relationships and Loyalty with Gen Z and Millennials in Financial Services
With a firm understanding of where these customers are in their financial journey, and what they look for in their decision-making process, financial service marketers should focus on how to get started with their marketing campaigns.
Below are some examples:
- Start Early
Consumers looking to get their first credit card or open a bank account will be your first opportunity to connect and build a relationship with them. Get in with them early so you can build on the relationship.
- Appeal to the Decision-Making Process
In order to effectively reach new customers, you must understand where they’re coming from and what matters to them at that point in their lives. Gen Z customers are going to be looking for something straightforward with a benefit that directly relates to their behavior, like cash back on dining out or travel rewards, whereas Millennial customers might be looking for more long-term benefits that can help them or their family.
- Evolve with the Client
Today’s Generation Z consumers are in school, but they won’t be forever – and when they’re finally out of school their needs will change tremendously. You need to be agile in your products and offers to meet their ever-changing needs while continuing to provide an incentive for them to remain with you as a customer. There are many stages in life – from buying a car or house to getting married and having kids or starting a business – that customers will need support, as well as have indicators that they’re heading in that direction. It’s critical to recognize these signs and act, or marketers risk losing customers to other financial institutions.
- Build an Authentic Connection
Be real with your customers, especially Millennials and Generation Zers. These two generations crave authenticity in their marketing experiences. You’ll need to be ready to deliver on that expectation if you want to connect with these consumers.
- Be Flexible on Rewards and Offers
Keep in mind that Millennials and Generation Z are two of the most diverse generations ever, and their needs will vary even if they’re all in the same generational group. You can help cast a wider net of appeal for your financial products if you are flexible on the rewards and offers you give. Empowering your customers to choose what they want can be a compelling incentive, especially for the Gen Z shopper who has constantly-changing short-term needs.
- Don’t be a “Numbers-Led” Financial Services Marketer
Don’t let numbers be your lead with these new customers – you’ll lose their interest quickly. Instead, focus on rewards and incentives for younger customers, and long-term benefits for older ones. Speak their language and be authentic – they’ll be able to see the difference.