Millennials are a coveted group when it comes to marketing, particularly because of their long-term value potential as customers. Financial advisors, Cerulli Associates, estimate the investable assets of millennials at $1.8 trillion. That doesn’t include the $10 trillion it says millennials will inherit in a massive wealth transfer in the next 25 years from their baby boomer parents. However, millennial customers are historically tricky to retain and have a reputation for having little to no brand loyalty. A 2019 survey by Data Axle found that while, overall, 72% of customers are not looking to switch financial services companies, over a third of millennials are considering a switch. In addition, millennials have more choices and better accessibility to new products and services than previous generations did.
In order to earn the loyalty of millennial customers, finance brands have had to think outside the box. They are coming up with ways to approach millennial customers with a thorough understanding of who they are, what they want and how to make the customer journey as appealing to them as possible. Below, we’ve compiled the most innovative ways financial brands are working to build long-term loyalty with their millennial customers.
When it comes to special deals and offers, one size does not fit all. The Data Axle survey, mentioned above, found that younger consumers prioritize perks (like travel benefits, food deals, or exclusive experiences) over credit card points when it comes to loyalty. In fact, older customers are twice as likely to want points over perks compared to their younger counterparts. And when financial brands do offer perks, the ones that appeal to baby boomers are not going to appeal to millennials.
Millennials prefer to spend money on experiences over material goods so they like perks that give them a chance to get out and about. Along that vein, they prioritize travel, so miles and other travel offers will appeal to them. When it comes to food, millennials love eating, but do not want to waste time in the kitchen which means they love ordering takeout. In fact, millennials are three times as likely to order in than their parents, leading to a rash of articles on how “Millennials are Killing the Kitchen.” Brands need to learn that the way to a millennial’s heart is through their stomach.
Brand example: Chase Sapphire Reserve Card
Knowing that millennials choose experiences over material goods, Chase gives Chase Sapphire Reserve card rewards program members up to a $750 travel credit once users spend four thousand dollars in 3 months. They also offer an annual $300 dollar travel credit for users that use their existing travel credits – thus rewarding customers who use their rewards. Chase makes booking flights possible directly from the Chase website, making the process as convenient as possible – which is another plus for their millennial audience. They also teamed up with food delivery app DoorDash to waive delivery fees for customers using their Chase Sapphire Card to feed millennials’ takeout addiction. Knowing the millennial audience paid off well and Chase has stated that “The majority of our new Sapphire Reserve customers are millennials. That is significant because millennials make up the majority of our new deposit accounts today, and their wealth is expected to grow at the fastest rate of all generations over the next 15 years.”
Love it or hate it, 90% of millennials use social media, and it’s a great place for brands to interact with their customers. There are many ways millennials use social media to interact with brands, for everything from customer support and informal reviews to communicating about values and social justice issues. Brands can use social media to keep customers up-to-date on their newest product offerings and updates. They can also use it to build an emotional bond with their audience. Consumers are more likely to remain loyal to a brand that they feel reflects their values, in addition to providing a quality product.
Brand Example: Wells Fargo
Financial services behemoth, Wells Fargo uses their Instagram page to connect with their millennial audience.
A recent study collected 10 years’ worth of data on millennials and found that they are committed to social justice. Recent movements such as the Black Lives Matter protests and Women’s March have shown that millennials are committed to these causes. Armed with the knowledge that millennials care about equality, as well as the fact that 59% of millennials are active on Instagram, Wells Fargo uses their Instagram feed to address important issues of diversity and publicly confirm their commitment to social causes. Wells Fargo’s most recent posts include an LGBTQ pride flag as well as several posts outlining the steps they will take to increase the diversity of their workforce.
According to a 2018 survey by Bank of America (via CB Insights), 73% of respondents were more excited about a new financial offering from a tech company like Google, Apple or Amazon than from their nationwide bank, proving that legacy institutions aren’t connecting with audiences. Financial institutions can benefit from attaching a “human face” to their advertisements and messaging to help them connect with millennial customers.
Brand example: TD Bank
Canadian-based TD bank, launched the #TDthanksyou campaign by installing an “automated thanking machine” in their branches. The “automated thanking machine” looked the same as a traditional ATM, so customers were none the wiser when the ATM started spitting out hyper-personalized rewards along with their cash. Because the in-branch employees had personal knowledge of their customers, TD Bank was able to present customers with gifts that held meaning for them. For example, a Blue Jays fan got to throw out the first pitch at a game and a young widowed mother received a trip to Disneyland for her children. The moments were captured on a hidden camera and edited into a video which the brand posted to their YouTube channel and shared across social media.
The results were staggering. The #TDThanksYou video has 19,922,876 YouTube views, was shared more than 460,000 times within the first 72 hours of its release. In addition to gaining TD Bank hours of free press on all the major news networks, 10% of the country’s population claimed the video positively changed their brand impression and an additional 1.4 million Canadians said watching the video reinforced their positive image of TD Bank.
Financial institutions have had to expand their online/mobile services as millennials prefer to do everything online. In fact, a recent survey found that 17% of millennials have never even visited a bank branch and almost 40% of millennials say a mobile app is one of the top factors for choosing a new financial services provider. They also want their online experience to be as convenient as possible, to the point where Salesforce dubbed them the “convenience generation.”
Brand example: Ally Bank
A bank that exists completely online is the ultimate in convenience for millennials. Ally Bank was one of the first digital-only banks and they allow customers to do everything from their phones, eliminating the need for physical branches altogether.
While it doesn’t make sense for every bank to go completely online, banks have expanded the number of tools they are including on their websites and apps to increase the services users can utilize at home.
Remember what we said about convenience? Millennials aren’t going to take a day off work to visit their financial planner. Millennials want to be able to check how their investments are doing on their phone as they take the subway to work, or while they are at the park with their kids. Young fintech companies like Acorns, Stash, and Robinhood are using apps to make investing as easy and seamless as possible.
Brand example: Acorns
Investing app Acorns lets users upload a credit or debit card and then, for every purchase the user makes, Acorns rounds up the cost to the nearest dollar and invests or saves the difference. Millennials were drawn in by the convenience and ease of use. “Don’t make people do the math,” is the motto of Noah Kerner, CEO of Acorns. And he’s right. Acorns is valued at over $860 million dollars and had 2 million new accounts opened in 2018. The majority of their users are 18-35 years old, proving that millennials don’t want to do math. Acorns has expanded their product offerings to include the ability to open an IRA.
Acorns isn’t the only player in this space. Rival app Stash also gives users the option to start investing in more than 400 stocks with fractional shares. And app Robinhood, allows users to buy and sell stocks, funds, and options without paying fees.
Financial brands need to be innovative to capture the attention of millennial consumers. By understanding millennials’ needs and how they communicate, brands can create messaging that resonate with this crucial demographic.
For more finance marketing strategies, download our whitepaper, “The Finance Industry’s Guide to Marketing Data.”
As Content Marketing Manager, Natasia is responsible for helping strategize, produce and execute Data Axle's content. With a passion for writing and an enthusiasm for data management and technology, Natasia creates content that is designed to deliver nuggets of wisdom to help brands and individuals elevate their data governance policies. A native New Yorker, when Natasia is not at work she can be found enjoying New York’s food scene, at one of NYC’s many museums, or at one of the city’s many parks with her two teacup yorkies.