Millennials have significantly different attitudes, behaviors, and needs when it comes to consumer finance. Now that they make up the largest generation in the US workforce, both traditional financial institutions and creative start-ups are racing to build the products of tomorrow. But how should they market them?
Today we’ll look at the new rules for marketing to the digital-first consumer in the financial services sector, an exciting and rapidly changing space.
If you’re in digital marketing, you’ve probably read more than one think piece about millennials, and you just might be one yourself! Financially, millennials have more debt and less savings than previous generations, so they’re putting off big life events like buying a home or having a child, decisions that often require meeting with a bank or a financial planner.
In parallel, technology has changed people’s primary means and methods of communication, enabling “always on” work expectations and creating consumers who are dependent on digital interaction.
It’s no wonder that millennials consistently show preferences for convenience, fast service, connectivity, and price transparency across everything from dining to healthcare providers, and financial services is no different.
Millennials have different product needs and expectations when it comes to finance, so it’s up to marketers to engage with them on new terms.
Not only has the customer changed, but so has the product! All generations have adopted online banking, but the millennials are leading the shift to mobile applications: e-Marketer estimates that most people will do their banking on their phones by 2021.
Given the new mobile ecosystems, consumers’ preferences have shifted to products that deliver instant and seamless fulfillment. Marketers are no longer selling high-performance financial products that might come with a human touch. They need to figure out how to market easy-to-use, mobile-friendly apps that deliver their products.
And, oh, by the way, the competition is fierce!
Traditional banks, lenders, and insurance companies continue to battle one another while fighting off “fintech” start-ups. Last year, JP Morgan Chase introduced You Invest, a zero-fee trading app to compete with the likes of Robinhood and Stash. They also partnered with Bank of America, Citibank, and Wells Fargo on Zelle to compete with the likes of Venmo.
Fintech companies received more than $14 billion in investment in the US in just the first half of 2018 alone, while all eyes remain on Facebook, Google, Apple, and Amazon. Most industry leaders expect one or more of the big tech companies to begin offering financial services, and with good reason: More than half of US adults surveyed said they would be willing to buy financial products from established tech companies, with more than 75 percent of adults ages 18 to 24 in favor.
The battle is just getting started. The future of consumer finance will look drastically different in the next five to ten years, so marketers need to start adapting now!
For all the changes occurring, we still haven’t seen a big shift in how financial services companies market their products. At the upper and lower portions of the funnel, we think this makes sense. Traditional finance marketers have already adopted best practices when it comes to cheap reach, utilizing 1st party data and identifying in-market audiences.
We see four big things finance companies can do to address the rapidly evolving landscape.
Millennials use big tech products because they understand what their users want before they ask for it. Financial marketers should try to do the same thing with potential customers even if they’ve never interacted with them before. Combine 1st and 3rd party data to understand who your potential customer is and what services and products they actually want before serving them ads that don’t reflect their needs or behaviors.
The funnel is dead. Long live the funnel! Build a variety of customer journeys toward a mix of outcomes. One thing is certain: One size no longer fits all. More than four million people graduated from college this past year, and we know that most of them will not buy a home or get married young.
How else can a finance company interact with these young people in a meaningful way? What will their journeys look like? How many different financial journeys are there? Which products map to each journey?
Bridge the gap between the upper and lower funnels with more data and more detail.
When it comes to creative and landing-page optimization, take a step back and ask, “Will every single person who sees this creative understand what it means?”
Millennials have less experience interacting with traditional finance companies, so it’s less likely they understand the nuances of ARMs, APR financing, and assets. If the campaign isn’t lower funnel, consider erring on the side of simple.
Similarly, millennials don’t have a lot of trust in financial institutions, and empathy is essential in education, so marketers should try to convey more of it.
Financial services marketers are extremely data driven and precise, but oftentimes they work in silos across disciplines. Instead of fixating on short-term KPIs and digital-only attribution, the most successful marketing teams are starting to explore cross-channel solutions like testing display impressions to improve direct mail performance and measuring true omni-channel reach through an identity graph.
The financial landscape is drastically changing, and digital marketing needs to reflect that. To engage with today’s connected users in your campaigns, download a copy of our one-pager, which contains all our newest finance audiences. In addition, subscribe to our newsletter, The Data Drop, where you’ll receive monthly insights and data to help inform campaigns and your broader marketing strategies.
About Justin Dantonio
Justin leads go-to-market strategy for Financial Services at Oracle Data Cloud. In his role, he puts smarter targeting into practice through industry insights, product marketing narratives and a consultative sales mind-set. Outside of work, you'll find him at a rock show.