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A prior post, The Single Best Way to Attract Gen Z to Your Credit Union, contended that acquiring more Gen Z (born 1996-2012) members could be accomplished by leveraging the credit union’s relationship with their 50+ parents. While this strategy represents a terrific growth opportunity, effective execution depends on marketers overcoming some significant obstacles.
50+ Apathy? Antipathy?
A 2020 Access Softek survey of credit union members who were parents of adult children reported some disturbing results:
- 90% said they were neutral about or didn’t want their adult children belonging to the same credit union as they did.
- Most troubling was that those who definitely didn’t want their adult kids also to be members of the same credit union totaled 38% of respondents.
These results suggest that credit unions have lost touch with their affinity group origins when their core differentiator was in being relationship-based financial institutions. Forced by fintechs and big bank competitors to be everything to everyone, credit unions have blended into the undifferentiated financial services morass, weakening their traditional close relationships with members. As a result, if there is no strong connection, why would a member recommend the credit union to friends and family?
Gen Z Adrift
Lacking parental recommendations to become credit union members, Gen Z is not likely to get there on their own. Because they are very comfortable in the digital world, it is no surprise they lead all other generations in fintech adoption. Switching Gen Z away from these online competitors will be challenging. This generation is notoriously hard to reach with conventional digital channels like ads, instead preferring to listen to financial influencers on platforms like TikTok.
However, the good news is that Gen Z also values their parents' opinions regarding finances. A New York Post survey found that 66% believe their parents set a good financial example. Therefore, credit unions may have a “backdoor” into attracting Gen Z members by deepening relationships with their parents.
Energizing 50+
Marketers must energize 50+ members to become advocates for the credit union. Here are some tactics to achieve this goal.
Niche Experiences
The first step in recruiting 50+ members as credit union ambassadors is to draw them back into a more intimate relationship with the institution. This can be accomplished by providing “niche experiences” for these members.
Executing this strategy begins with identifying subsegments (niches) within the member base. Niches can be based on various dimensions, such as demographics, location, culture/language, occupation, or hobbies/avocations.
Next, each niche receives digital content tailored to their interests and life priorities. This means the content will be focused on more than just financial topics. In fact, depending on the niche's preferences, the majority will be “lifestyle” topics like food, travel, health/fitness, and fashion/beauty.
It may seem counterintuitive for a credit union to be the source of such general content. However, the aim is to appeal to members’ interests across the vast sweep of their lives to instill a sense that the credit union understands them as people, not just depositors or borrowers. Hence, the term niche experience signifies that members are engaged at a deeper, more meaningful level.
The intended result is deeper trust and loyalty among members, so they evolve from apathy (and even antipathy) to raving fans of the institution. This then leads to increased sales and wallet share. A bonus outcome is that 50+ members will be more apt to recommend the credit union to their Gen Z adult children. Content topics on that very subject can be woven into the niche experience. (hypothetical headline: “Gen Z Parents – The Kids Want Your Financial Advice!”).
Referral Programs
While niche experiences are the way to rekindle the trust and loyalty of the 50+ segment, a practical adjunct would be to launch a program to incentivize referrals. Such a program would reward the member when they refer a friend or family member who opens a credit union account. Well-executed referral programs can yield significant results. An article in the Journal of Marketing Research showed that one European bank’s program yielded 25% more profit for referred customers and 18% less churn with an acquisition cost less than other marketing tactics.
Family Plans
Another way to motivate 50+ parents to bring their Gen Z children into the credit union fold is to offer “family plans.” These arrangements provide extra benefits if the family unit combines its banking business with the credit union. An analogy would be mobile phone family plans, where the per-person cost per phone is significantly reduced when multiple family members share the same plan. In the credit union example, if multiple family members hold their accounts as a unit, the institution can confer extra benefits such as higher yield savings, lower fee checking, and preferred borrowing rates.
Gen Z Targeted Products and Services
Parents may enthusiastically recommend credit union membership but expect the adult child to ask, “What’s in it for me?” Marketers should thoroughly understand Gen Z's financial needs and offer products to meet those needs. For example, Gen Z faces multiple financial challenges:
- High debt loads, especially student loans
- Substantial obstacles to home ownership
- Sincere doubts about being able to afford retirement.
Tailoring products to these needs and promoting such offerings to both Gen Z and their member parents will boost the probability that the credit union will be perceived as a logical place to reach financial goals.
While deepening relationships with 50+ members can lead to growth simply by expanding wallet share with this group, it also promises to convert them into the ultimate influencers in persuading their Gen Z adult children to become credit union members.
