Editor’s Note: For banks struggling to establish relationships with Millennials, “Banking & Millennials” is a three-part blog series that explores the savings/investing potential of this group, exposes why popular stereotypes are dead wrong and suggests a roadmap for setting your bank apart from the competition. This is the second installment.
College educated. Upper-middle class. Very young. Sound familiar? This is the stereotypical Millennial that Corporate America has been pursuing for years. But is this an accurate description? Do all Millennials really fit that mold? And are businesses leaving anything on the table by using that characterization to define and target an entire generation?
The answers are no, no and yes! Millennials range in age from 18 to 34 but encompass a wide range of life stages. The younger end of the generation has just entered into “adulthood” with newfound legal rights and responsibilities while the older end of the generation has been on their own for nearly 16 years. Their goals, needs and wants are vastly different.
To illustrate this point, meet Miley, Megan and Mike:
As you can see, only Megan fits the image of the archetypal Millennial popularized by mainstream media. Miley and Mike, although from the same generation as Megan, are at different stages in their lives with significantly different needs.
Looking at this from a bank’s perspective:
- Miley needs to build her credit and pay off her student loans
- Megan needs to research mortgage rates to help finance the purchase of her first house
- Mike needs to meet with a financial advisor to discuss how to start saving for his child’s future needs, including college tuition
In addition to life stage, financial needs are also shaped by differences in race, education, income and employment. Although all three are Millennials, their outlooks toward everything—including their financial needs—might be completely different.
While such disparities are true for every generation, they are even more striking among Millennials. Research suggests that Millennials are the most racially diverse generation in American history. Furthermore, the contrast in employment and education levels among younger and older Millennials is far greater than previous generations. Therefore, banks that want to court this generation and its buying power must stop generalizing the characteristics and needs of Millennials and start accounting for life stage and attitudinal differences as these factors contribute to their nuanced behavior.
It is not difficult to understand Corporate America’s obsession with Millennials. They are the largest demographic group in the country and will be the ‘engine’ that propels the US economy in the coming years – both in terms of contribution to the labor force and spending. However, targeting Millennials and developing a sustainable relationship with them is not as one-dimensional as it seems. Businesses must first overcome generational stereotypes to understand their unique needs. Only then can they craft targeted messages that resonate and deliver them in the right place and at the right time.
Do you really know your Millennials, or are you falling into the generation trap? If your Millennial targeting strategy is not winning, we can change that.
Next, we share a roadmap for setting your bank apart from the competition in “Answer Before They Ask: How to Message Millennials.” And, if you missed the first installment about why banks are struggling to win over this generation, read “How Big is Your Piece of the Millennial Pie?”
Special thanks to Sarah Keller for her contribution to this blog post.
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