By that I mean Gen Z. Who are the Gen Z’ers? They’re the individuals born between 1997-2012, which makes them between the ages of 10 and 26 as of 2023. Right now, they account for about 40% of the U.S. population, numbering nearly 70 million.
Growing up in an “age of technology,” these consumers exhibit very different behaviors than previous generations… much different. Especially when it comes to how and where they find information, as well as how they shop and purchase products and services. They do everything online, and they're doing it from anywhere. No longer confined by a home computer, they’re transacting business on their cellphones while in the car (sometimes even while driving), and even on their watches while running on a treadmill (I’ve actually experienced this. Perhaps, you have, too.)
And as we’ve all come to know, their expectations of a bank’s digital experience (that is, the service they get via online or through a mobile app) is far different from any previous generation. In fact, research has shown that to this generation, a bank’s digital experience is more important to them than the products and services that it offers. So, what does that mean for your bank?
Well, for me, to answer that question I need to travel back to my soft drink marketing days. If I learned anything from building a beverage company’s market share, it’s this: Get ‘em while they’re young. Remember “Choice of a New Generation”? That Pepsi theme line cuts right to the quick of what drives a soft drink manufacturer’s growth. The key to success in marketing a cola is grabbing that young consumer as they’re making the transition from juices to soft drinks… if I recall, that’s at about age 12 or so… at least, that used to be the case. I just did a bit of googling and learned this from “Made for Mums:” “Age 8 is when most people said they'd let their child have fizzy drinks.” Personally, I find that deeply disturbing, but… I digress.
Anyway, my point is this: Smart marketers work hard to earn customers early and work just as hard to keep them. That being because, as we all know, it’s something like seven times more costly to earn a customer than it is to keep one. Pepsi knows that they operate in a category where consumers are highly brand loyal, and that earning that customer at 11 or 12 pretty much ensures that they have that customer for life. That’s just the way it is with soft drinks. Now, do banking customers exhibit that same kind of “my-brand-no-matter-what” loyalty? Hard to say. I read this on lumindigital.com:
“According to Foresight Research, 22% of users — or roughly 44 million people — considered leaving their old bank and starting over with a new primary financial institution. Of the consumers who “intend to leave their bank or credit union, almost 3 out of 4 are Gen Z or Millennials — the very block of business that drives the future of your financial institution.”
How do I interpret this? I see it as an opportunity for banks. Right now, the GenZ banking customer is in the “consideration” stage of their buying journey. By that I mean that they’re just now reaching those milestones in life that will motivate them to choose a bank. They’re getting somewhat settled in their personal lives and career. It’s a time when they’re beginning to show interest in not just savings and checking accounts, but other products such as loans, mortgages, and investment products. It’s a perfect time for a community bank to earn their business.
Granted, that business may not be record-setting right now, but that will change. With the oldest of the Gen Z population turning 26 in 2023, they’re still in the early stages of their careers. As they continue to grow in their careers, their income will continue to grow, as well. In a study done by Bank of America, Gen Z’s income is predicted to increase 5x to $33 trillion by 2030 and surpass Millennial’s income by 2031.
And here’s something else to consider; The Great Wealth Transfer, as it’s been called. It’s predicted that the Baby Boomer generation, the wealthiest of all generations in American history, will one day soon transfer its wealth to the next generation. Well, that’s not entirely accurate. Not the “next generation,” but, supposedly, the one following it; i.e., Generation Z, the Baby Boomer grandchildren. The Great Wealth Transfer is estimated to be about $68 trillion. That’s a pretty hefty piece of change and any bank should want a piece of that.
So, what can you do to begin to earn the trust, and the business, of this coming generation?
Help educate them
The Gen Z consumer is hungry for information, especially when it comes to financial services. They’re shopping for products and services and want to learn as much as they can about them. Now is a good time for you to position yourself as a Subject Matter Expert in the world of banking and financial management (which of course, you are) and begin building that personal, long-lasting relationship.
Reach them where they like to be
Gen Z is heavily influenced by social media. The social media channels they prefer are, by and large, Tik Tok, Snapchat, and Twitter. Make sure that these platforms are an integral part of your social media marketing strategy.
Last but not least, deliver on their digital expectations
Remember. This generation of consumer has sky-high expectations and razor-thin patience. It’s great that you’re out there hyping your digital banking experience… just make sure that you live up to the expectations that you set.
About Bank Marketing Center
Here at bankmarketingcenter.com, our goal is to help you with that topical, compelling communication with customers; the messaging — developed by banking industry marketing professionals, well trained in the thinking behind effective marketing communication — that will help you build trust, relationships, and revenue. In short, build your brand.
To view our marketing creative, both print and digital – ranging from product and brand ads to social media and in branch signage – visit bankmarketingcenter.com. You can also contact me directly by phone at 678-528-6688 or via email at nreynolds@bankmarketingcenter.com. As always, I welcome your thoughts on the subject.