As member ranks continue to mature, the challenge to bring in new members remains a constant. Currently, the average age of a credit union member is in the late 40s, according to the World Council of Credit Unions, and is part of a generation that grew up with a litany of things millennials have no idea about. Instead of looking at this challenge as an “us versus them,” credit unions need to embrace one of the largest purchasing powers bursting onto the scene today.
As some millennials begin hitting their mid-thirties, they will need all the financial products and services thirty somethings have always desired. The question is, how do you reach and connect with them? Millennials want purchase options. They are attracted to leasing, as it fits their budget and puts them in the driver's seat of their favorite auto brands. Nationwide leasing accounts for 28.9% of all new car purchases for this age group, which represents a 46% jump in leasing by millennials over the last five years as reported by Forbes Magazine. Overall, leasing increased by 41.7% during this same time period.
This generation will be responsible for $200 billion in annual buying power, so their influence cannot be ignored. Millennials are acquiring cars – 64 million are expected to purchase a car in the U.S. over the next five years. Taking out low-cost leases in order to afford the must-haves on their income-pinched budgets is driving their inclination toward leasing. The 18- to 34-year-old market segment accounts for 60% of leases in the U.S. and this number climbs in select regions of the U.S., such as California, New York and Florida.
In order to be part of their world, messaging to the millennial credit union member has to change. As older credit union members retire, those coming up behind them need to be serviced in a manner that, frankly, they brought to the table. As digital natives, millennials spend most of their time on their hand-held devices, receiving information digitally and expecting to perform most of their day-to-day transactions through their phones. The car buying experience for a millennial involves months of research and a single visit, at most, to a dealership. They will pour over online reviews and visit dealership car offerings online, primarily via a mobile device.
Is your entire auto loan marketing strategy focused on: “Rates as low as…”? The newest data on auto loans tells us 97% of all car loans begin online and that auto loan penetration is tightly tied to technology adoption. Notice that neither of these two points are in any way related to the traditional credit union go-to tactic of promoting low rates. Credit unions need to avoid strictly promoting rates and start promoting what their members are researching when they purchase their next vehicle. Message strategy should be delivered to members across all channels, with an emphasis on mobile devices.
Success with this group requires credit unions to shift their method of delivery and push mobile-first engagement. Less and less research, buying and day-to-day transactional activity is taking place on the desktop. Millennials are a group that is responsible for the decline of the PC, as 84% utilize their mobile devices before heading out to shop for anything.
Is your desktop-designed site dead? No. You need to have all areas of engagement covered. Think of your website as your lobby. What is the experience offered by the site, and what is the journey your members will take when they visit? Can it be easily navigated? Don't provide a bumpy journey for the member to get where they are going. In your physical lobby, first impressions need to be at their best, and the same is true for your website.
The path to purchasing a car has changed more in the last five years than it has in the 50 years prior. To remain a viable lending source, credit unions must change their approach to the modern car buyer, and that requires implementing newer technology while updating their marketing approach. Taking strides in new directions will help credit unions bridge the generation gap and create sustainable growth for decades to come.
As cited on CU Times