Remember Millennial marketing? All the rage five years ago, the Millennial marketing boomlet found scores of marketing gurus telling us that Millennials were rewriting the rules of loyalty, disrupting entire industries, and generally leaving us olds scratching our heads and scrambling to figure out how to fit Instagram, SnapChat and WhatsApp into our marketing plans so we looked “hip” and “with it.” We’re now in the full counter-revolutionary period, in which a steady stream of surveys reveal that—wait for it—Millennial behavior may not be that different after all.
The latest evidence of the counter-revolution comes courtesy of author Howard Laxer from TNS, who argues in a lengthy treatise on Customer Think that, when it comes to banking relationships, Millennials look a lot like their Gen-X older siblings. This story comes on the heels of our report yesterday revealing that Millennials exhibit the same feelings toward hotel loyalty as their older counterparts.
Today’s headlines are what you’d expect coming out of the Millennial marketing counter-revolution: other than their indisputable penchant for conducting every aspect of their personal and professional lives through their smart phones, Millennials want the same things out of their banking relationships as do Gen-X customers: Great customer service and knowledgeable employees. Money quote:
“So how different – or similar – are [Millennials] from other generations when it comes to their perceptions of banking experiences, their loyalty to their primary banks and the drivers of their banking relationships? The answers are mixed:
- Millennials look just like GenXers in terms of the strength of their banking relationships, with both groups noticeably less loyal to their PFI (Primary Financial Institution) than Boomers or Traditionals
- In assessing the impact of bank performance on various attributes in driving loyalty, however, Millennials fade into the larger population and are indistinguishable from the crowd
- But scratch a bit further and we see a critical difference in the importance of different channels, with the loyalty of Millennials significantly more dependent on mobile banking than other generational cohorts.”
Overall, Laxer’s report reveals that Millennials and Gen-X are fairly indistinguishable in the key drivers of FSI loyalty. The key difference in Millennial behavior lies, no surprise, in their predilection to seek out and avail themselves of mobile banking services. Another important distinction between Millennials who came of age during the 2008 financial crisis and older banking customers: Millennials are significantly less likely to consider FSIs “trustworthy.”
The most important question for FSI marketers: is this lack of trust in FSIs permanent? Or, as Millennials age (the oldest Millennials are now in their 30s, which should make those of us in older cohorts feel positively ancient) will we find that they begin to develop more trust and loyalty in their banking relationships? Market researchers, some longitudinal studies are in order.
Laxar’s conclusions: Millennials and Gen-X are similar in their banking proclivities; Millennials love mobile banking; and they still prefer great customer service. All of this is to be expected. What Laxar’s report doesn’t touch upon is the one generational difference that should keep traditional banks up at night: according to the Millennial Disruption Index, Millennials are much more willing to consider banking with tech companies—think Apple, Google, and Amazon—over traditional banks. For Millennials more so than older generations, banking relationships are driven as much by sweet tech as by trust. We may expect Gen Z to follow suit.
To compete, banks will need to reinvent their brands. The best way to do so is to foster dialog with their customers, and leverage the resulting data to build the products and services that drive strong relationships. That’s what the tech companies do. Isn’t it time we got started?
Read the rest of Laxer's article here.
- Rick Ferguson