By Tommy Loo
Have you actually seen one? You know, “Millennials”, have you seen one? This seems to be a big question for many segments in business right now: How do you define and serve the up and coming generation known as “Millennials”?
Every time you open a trade publication or read various blogs or discussion groups on LinkedIn you are bombarded by information over load for this new group of consumers. By the way, this new generation garnering more than 20% of the U.S. consumer buying power and growing every day, they are here to stay, so it becomes a point of necessity.
It has gotten to the point; I am not sure what the profile of a Millennial really is? But here is both a humorous and serious look what Millenials themselves have to say about it.
Here is what I’m talking about. Recently, the ICBA and The Center for Generational Kinetics conducted an ICBA American Millennial and Banking Study. The study findings stated that “Millennials are by far the most entrepreneurial generation.” In fact, Chris Lorence, ICBA EVP and chief marketing officer said, “Community banks and Millennial’s are the perfect fit for one another, both appreciate local business and both have a strong entrepreneurial spirit.”
So they like “local” financial institutions! Can defining the Millennials be so easy?
Hmmm…well, then I read another survey authored by FICO and Gartner Research, “Doing Multi-Channel Banking Right,” which stated there were around 79 -million Millennial’s in 2011 versus 76-million Baby Boomers (or Boomers). The Millennial population segment is expected to grow to 78 million by 2030 versus a declining Boomer segment that that stood at 56-million per the U.S. Census Bureau 2012 report.
The FICO survey identified nine key factors about Millennial’s versus Boomers. I will focus on two factors from this report in an effort to show how elusive defining Millennials can be.
Take, for example, that Millennials are five times more likely to close accounts with their primary bank than Boomers, and three times more likely to open an account with another primary bank. They are much more inclined to move their accounts because of poor service, high fees, lack of channels, or poor offerings in products they need.
So they like “big” financial institutions!
Another finding in the survey is that 68% of Millennials use a national bank as their primary bank, while 15% use credit unions, and only 9% seek regional banks. Here is an interesting fact from the FICO study: Millennials have 3.49 products with their primary bank compared to 3.3 products for Boomers.
So they like “national” financial institutions!
Are They Real?
Do these two surveys demontrate similar conclusions or are they polar opposites? Another question that comes to mind based on the grouping of Millennials surveyed is, are these two surveys an apple-to-apple comparison? What do you think? I’m conflicted; it seems to me that these two surveys show very different attributes for the “same” generation.
How can a CEO or any “alphabet” for a bank or credit union draw any conclusions over how to serve the Millennials in their market when so many surveys over this group show such differing results? It has gotten to the point you cannot go it alone; there is a need to look closely at your market and not worry about what is happening globally.
OK, so take a deep breath!
A couple of facts to think about when considering Millennials: they are the up and coming generation and they possess a very keen understanding of how technology fuses their worlds together. We are bombarded with surveys and reports instantaneously providing us with great knowledge over the vast array of information and prospective every day. Indeed, this is great! However, cobbling such information together in an effort to make seat-of-your-pants business decisions probably is not the best strategy. Unless you have that kind of money!
In reality, look for those experts who can partner with you! Seek out those who have the pulse on market knowledge and how this fits into a strong retail strategy. Seek out those partners gaining the insight needed to enhance your position within your communities.
The bottom line: knowing your market is invaluable; knowing who is in it is even better!
Tommy Loo is Director of Business Strategies for LEVEL5. He can be reached at tloo@level5.com.