Credit unions are continuing to struggle to connect with younger depositors. According to recent research from MyCUsurvey, credit unions are struggling to attract younger members. Perhaps it is due to a lack of online banking. Perhaps it’s because younger bankers don’t understand the value or structure of credit unions. Whatever the reason, younger customers just don’t feel engaged. As MyCUsurvey states:
“The latest survey revealed a direct correlation between the age of credit union members and customer satisfaction. According to the findings, there is a 30 point different in satisfaction ratings between older members (over age 65), and younger members (under age 30); older members are just more satisfied with their credit unions.”
Note that only 11 percent of Generation Y polled by Javelin Strategy and Research had a financial relationship with a credit union, as opposed to 15 percent of all other age groups. Compare this to 43% of Generation Y polled who had a financial relationship with a top 10 banks had as opposed to 38% of all other consumers. The reason is the demand for mobile and online banking; an area where credit unions lag.
So what can credit unions do to make themselves more attractive to younger depositors? Talk to them where they hang out in terms they understand. American Banker recently ran an article on how credit unions are building online community to nurture younger depositors, hiring online spokespersons through local contests. From American Banker:
Introduction to the Young & Free Campaign from Currency Marketing
“The online contests, and all that goes with them, are part of the Young & Free campaign, launched in 2007 by Currency Marketing, a credit union marketing company in Chilliwack, Canada. The campaign started from a fundamental proposition: Credit unions, faced with an aging population of members, had to do something to stay relevant and to gain a new, young base of customers.”
This is a brilliant approach that combines new marketing channels with social media. Basically, the program recruits a regional “spokester,” a social-media savvy person in their 20s who will represent the credit union for one year. They are paid an annual salary (typically around $30,000) to engage their peers using social media. Armed with flip cameras, smartphones, and laptops, they feed their social media channels with relevant content. They are required to run a campaign website, develop contacts through social media, write daily blog entries, and reach out to credit union members over Twitter, Facebook, and other channels.
And the campaign yields results. According to American Banker, nine credit unions participating in the program doubled their membership. Social media continues to prove itself to be a powerful tool for recruiting consumers, if you understand how to build a community. The Young & Free formula seems to be working for credit unions, and some of the savvier banks are sure to follow suit.