Finicky Younger Generation Tests Banks' Strategies
According to a recent poll by St. Louis-based marketing research company Maritz, 61% of Gen Y consumers and 53% of Gen X consumers said they had changed or considered changing their primary banking institution over the past two years. Comparatively, only 20% of the Silent Generation (WWII combatants) and 37% of Baby Boomers answered the same way.
"Young people are, by definition, a lot less stable and less loyal," Thad Peterson, vice president of financial sector strategy and solutions for Maritz, tells Marketing Daily. "[But] they also have a lot more choices than previous generations."
The survey also found that younger consumers are harder to please, with a third of Gen Y and Gen X consumers saying they felt they could get better customer service at a bank other than the one they used. Only 20% of Baby Boomers and 16% of Silent Generation consumers felt the same way. Gen X and Gen Y consumers were also more likely to be upset about fees and poor ATM distribution than their older counterparts. While some may attribute those attitudes to an overdeveloped sense of entitlement, Peterson says it also reflects how the younger generation views the world.
"They expect what they want, when they want it and where they want it," Peterson says. "And if it's not there, they'll go someplace else to find it."
To attract and keep the younger consumers, banks need to begin to understand what's important to younger consumers, Peterson says. For years, banks have relied upon a location's convenience to attract their customer base. But with Gen X and Gen Y's affinity toward online and mobile banking, location is less important than it had been in the past.
"Their process is very different from driving around and looking for the closest branch," Peterson says. "In a lot of ways, banks today are trapped by their own infrastructure."
Gen X and Gen Y consumers also want an individual relationship with their banks, Peterson says. While some banks have dipped their toes in the social networking waters, Peterson notes they need to use social networking as a way to build a relationship first, and acquiring new consumers second. "If you view Facebook as a giant global cocktail part--which it is--I'd work the room. I'd try to get to know people and try to build a relationship with them to get their business."