Maybe it’s student loans, maybe it’s the rising cost of avocados, but millennials carry a lot of debt. About two-thirds have at least $10,000 in student debt alone, and one in four millennials with $30,000 or more in debt expect to take more than 20 years to pay it off, according to a survey by ORC International.
Millennials, or individuals between 20- and 35-years-old according to the Pew Research Center, are looking for ways to pay off those debts, and sometimes that means more loans. In a world of instant gratification and convenience, “FinTech” tools offer seemingly easy and quick student loan refinancing, personal loan approval and working capital that appeal to young people.
The majority millennials have never opened an account with a legacy bank, preferring to use “FinTech,” short for financial technology. This technology offers them the convenience and personalization they want from banking—technology usually missing in community banking experiences. In fact, more than 75 percent of millennials will only consider a financial institution that offers in-branch AND online operations.
Lending is an opportunity for your community bank to win millennials’ business. You have the expertise and customer service millennials with debt need. By adapting and catering to their desire for easy and accessible banking, you too can win over millennials looking for loans.
Create Millennial-Focused Messaging
The millennials in your target area might not know all the benefits to receiving a loan at your community bank. In fact, you’re in a better position than FinTech to offer advice based on your area’s economic climate, and many community banks offer lower lending rates than digital alternatives. Use campaign messaging to your advantage to show off your loan expertise and advantages.
- Before turning to you for a loan, a millennial will visit your website. Is it responsive? Is it current? Is the structure, design, and functionality designed to deliver the experience they expect? Your competitor is just a click away; ensure your homepage hooks its visitors and does the job that they want it to do.
- Create messaging specifically for millennials. Focus on your most convenient offerings like online applications, quick personal loan approval and student loan refinancing. Online tools are the most valuable part of 43 percent of millennials’ banking experience.
- Establish trust. Millennials are 15 percent more likely than other generations to remain loyal to a brand due to its philosophy or reputation. This means your tone across all platforms—digital and traditional—must be accessible, friendly and authoritative. This helps establish trust with this audience and give you a “personable” reputation not just in-person at your branches, but also online.
Amp Up Personalization
As this generation ages, you need to think about both an audience just out of college and one buying a first home and starting a family. While some reports might say debt among this generation is decreasing, NBC News and GenForward at the University of Chicago found that 46 percent of millennials have credit card debt, 34 percent have a car loan, 36 percent have student loans and 20 percent have mortgage debt. Only 23 percent of millennials are debt free.
Personalize your emails, offers, thought leadership (e.g. blog posts), online experiences and digital ads to the young millennials trying to pay off student debt and separately to the older millennials looking for mortgages. Millennials are not monolithic — the more time you spend considering each groups’ desires and problems, the more likely you are to attract—and keep—them as customers.
Elevate Your Online Presence
A part of personalization is reaching millennials where they are in your “path to purchase.” If a younger person needs a loan, the first place they’ll look is the internet. They might visit a site that aggregates and compares rates, make a Google search for banks with the lowest rates or turn to social media to solicit advice.
When these prospective customers conduct an online search, where does your community bank show up? Does it show up at all? If you don’t have a search strategy—both organic and paid—make it a priority to develop one. Once you and your search strategy partner have a plan for what you want your site to do for your business and how organic and paid search will support that goal, you’ll have a clearer view of how to use your blog and brand social media accounts.
Millennials have a different mindset than older generations and far more options to choose from when considering loans. If you tailor your messages, ad personalization and digital presence to this group and the varied ages they represent, you’ll be far more likely to bring them to your bank for help—and win them over long term.
Want to attract millennials to your regional bank’s loans? We’ve done the research on this generation and what attracts them, positioning us to create campaigns that work. Email us or call 317-631-6400.