Top Three Reasons Why You’re Not Reaching Millennials and Gen-Z
By Rachel Lauren, COO, Debbie
October 8, 2024
Credit unions have long argued that the future growth of the credit union movement is with Millennial and Gen-Z generations. These groups are more idealistic than their older counterparts, less trusting of traditional banking (and particularly credit), and are seeking community. Sounds like all the things a credit union can offer, so why do credit unions struggle to reach this demographic? A few simple reasons:
- Misalignment of requirements for account opening.
- Credit unions using traditional marketing channels.
- Products require a “hook” to resonate with young consumers.
Account Opening Requirement Misalignment
Most credit unions are trying to make it easier to open an account digitally (step 1 of reaching a younger member), but there are a few key factors that make it tougher for young people to get approved for membership:
These factors make it not only harder to qualify for loans, but often even basic checking accounts. Many credit unions will say they want younger members, but don’t want to disturb their average member credit score by too much. These folks may also have multiple addresses, between their home address, their college address, and first address as a working adult (which can oftentimes be in three different states, making identity verification more challenging). Income is also tougher to prove, as more young people shift to freelance/gig work.
Adjusting to this new reality will mean opening up approval criteria while pushing on digital channels. This can invite fraud – however, fraud has more concrete solutions than the growing market share problem.
Credit Unions Using Traditional Marketing Channels
In every interview I have with credit union marketing leaders, I hear the same thing. Many are using radio, billboards, and direct mail; some are using digital advertising such as Google search and Facebook ads and a good chunk rely on community partnerships such as schools, non-profits, and sports, while very few are using affiliate marketing or referral bonuses.
Forty percent of companies in America attribute affiliate marketing as their number one acquisition channel, including banks and fintechs.
Affiliate marketing is the practice of sourcing referrals and leads through affiliate or partner brands – for financial institutions, that can look like blogs or websites (such as Nerdwallet), influencers on Facebook, TikTok, or YouTube, and financial apps (like Debbie). These affiliates act as trusted third parties who can represent your brand in a positive light, without looking too sales-y. Most young people find their financial institutions through their friends, family, or affiliate networks.
Debbie is a mobile app that pays its users to complete financial challenges and improve their financial habits – it’s able to sponsor these rewards by acting as an affiliate to its credit union partners. Users cannot redeem their rewards until they open an account with one of Debbie’s credit union partners.
Here is what Debbie’s users look like:
Sourcing consumers through trusted affiliate channels means you have a better understanding of who they are, what their goals are, and how they found you.
Products Require a “Hook” to Resonate
Having attractive rates is a good place to start to drive young people to your credit union. However, even large players like SoFi and Axos Bank must amplify their message through various marketing channels. “Build it and they will come” is not going to move the needle in this competitive market, and consumers have lots of options.
Back in the 1930s, banks used to offer toasters as a way of getting new customers through the door – and it worked! In this day and age, consumers are seeking financial institutions that will reward them for their loyalty. This is why credit card programs are some of the most successful financial products today. It’s time we took that model and reversed it for the benefit of young consumers and rewarded them for positive financial behavior rather than just spending.
Connect with Debbie to learn more.
About Debbie
Debbie was built with the philosophy that the way to drive long-term financial behavior is by aligning positive incentives between consumers and financial institutions. That’s why Debbie is the first platform to reward and pay consumers to improve their financial habits, like making on-time payments, saving, and spending smartly, all while driving new members to you.