3 Marketing Tactics for Credit Unions to Win Over Millennials

Credit unions offer a better deal for Millennials than any other financial institution, but to win them over, your marketing must embody and convey those advantages.

Credit unions are doing worse with Millennials than any other generation, as this banking target market has flocked to fintech-driven mobile finance experiences that prioritize faceless convenience over the advantages of credit unions. But this disconnect is not the way it has to be.

Credit unions offer a better deal for Millennials than any other financial institution, but to win them over, your marketing must embody and convey those advantages.

The disconnect is a customer experience issue, but it’s not one that can be fixed by just improving customer service. You need to help these potential customers see what your brand represents throughout the lead generation process. If you amplify personalized direct mail with targeted digital marketing, you create an optichannel marketing experience that shows younger audiences you are both relevant to their world and able to deliver the individualized, convenient banking experience they’re looking for.

To attract digitally savvy, convenience-centric banking customers, credit unions must be able to deliver marketing that accomplishes three things at once:

  1. Convey a better customer experience
  2. Embrace technology and convenience
  3. Make a personal connection

1. Convey a Better Credit Union Customer Experience

This is the first taste these Millennials will have of your brand, so it’s important to show why it’s worth their time to bank with you. How does this marketing experience convey the things that will give them a great experience as customers? Is it relevant to what they’re interested in? Is it convenient? Is it personal?

Beyond the marketing experience, what aspects of the customer experience does it actually show? Does it showcase the mobile tools your credit union provides? Does it show how you make it easier for them to access funds and perform transactions? What other benefits do you offer? Do you integrate with their favorite fintech, like Venmo?

It’s the time to show why you’re the credit union that can help them live their active, technology-empowered lives and achieve their financial dreams. Make it clear why your institution is the financial hub Millennials should be choosing as the foundation to reach their goals.

2. Embrace Technology and Convenience

Mobile should not just feature in your customer experience, it must be an integral part of your marketing as well. Today brands can target individuals through data you already have about them or by building custom audiences on digital platforms. These ads must be targeted to social and mobile marketplaces, as well, to ensure that Millennials see your messaging where they live when they’re ready to engage with it.

Reaching out to your audience through mobile channels is only the beginning. The creative you send and the offers it presents must showcase mobile-enablement as well. These customers live on their phones, and you need to show them your credit union lives there, too.

3. Make a Personal Connection

Targeting and personalization go hand-in-hand. The data available today — both your first-party data and information vendors can provide — is a powerful tool for making marketing that connects. This goes beyond demographics. With the right data, you can target younger adults at times when they may be more open to changing banks or pursuing other financial products like car loans and mortgages.

Figure out what demographics and life events you want to engage with this campaign and design a direct mail campaign that addresses them and serves as your marketing catalyst. Then target that defined segment with complimentary marketing across the digital world.

Millennial Marketing Tech for Credit Unions

Credit unions have always marketed less than other financial institutions, especially through mass-market channels. Instead, the traditional credit union relied on word of mouth and brand reputation supported by local direct mail to build personal connections with its community customer base.

Those are all good tactics and credit unions should keep using them, but they aren’t enough. Today, a single direct mail campaign may be seen, but it’s too easily forgotten in the tide of advertising Millennials see all day. Not to mention, while Millennials have been shown to appreciate direct mail, this is not the demographic you want thinking that your brand is “old-school” — digital marketing and engagement channels are essential for getting and holding Millennials’ attention.

Just like your credit union isn’t their father’s financial institution, today’s optichannel marketing isn’t the direct marketing of 1990. With the data and tools available today, it’s possible to make a personal connection that sets your brand up for success with each customer you reach. Doing that in a way that embodies the customer experience your credit union provides is the key to winning Millennial bank accounts today.

Financial Institutions Can Put Artificial Intelligence to Much Better Use

I’ll start with a potentially controversial statement. Banks are misallocating their investment in artificial intelligence and predictive analytics by putting it into consumer-facing chatbots, rather than using it internally to empower their staff to understand and better serve the customer.

I’ll start with a potentially controversial statement. Banks are misallocating their investment in artificial intelligence and predictive analytics by putting it into consumer-facing chatbots, rather than using it internally to empower their staff to understand and better serve the customer.

Most customers don’t like speaking with bots and usually call their bank when they have an issue that requires processing that’s beyond what artificial intelligence can currently offer. In fact, AI’s reputation has been damaged virtually beyond recovery by the endless loop most customers encounter when they call the bank, not able to get to where they want to go.

Moreover, you don’t see pictures of chatbots pinned up in banks with “Employee of the Month” emblazoned across the bottom. Nor was any new business won on the strength of a chatbot’s performance. Finally, customers don’t stay with banks because they developed a great working relationship with a chatbot. Truth of the matter, chat hasn’t reached the level where it’s consistently reliable for addressing the customer concerns that rise to the level of making a call to a financial institution.

All that said, artificial intelligence is a highly powerful tool. How it’s being used is simply being misallocated. So the question becomes, is there a way banks can use it to enhance human engagement with clients? The answer is, “Yes.” Although banks and other financial institutions are in a completely different line of business than, say, a luxury retailer or car dealership, what they have in common is that critical need to engage customers at various points in a given transaction. This applies to banks and other financial institutions at least as much as it applies to other businesses. Reaching out to, connecting with and maintaining relationships with customers, and doing it well, is a key consideration. Done well, banks have a better chance of securing a higher lifetime value from their clients when they get it right. And it’s much harder for bankers or advisers to know about the hundreds of products that are available to them; far more so than, say, a car salesman at a dealership, or an associate in the dress department at Saks. AI’s best use is providing them — the customer-facing bank advisers — with the tools to have the right information for the right client, so they can spend more time on the customer relationship.

There are ways in which the power of predictive analytics can be brought to bear immediately, creating a more substantial and recognizable benefit for both financial services providers and their customers. A knowledge-driven approach to cross-selling and upselling is one such strategy.

There’s a vast range of training, tools and processes that can positively influence engagement efforts. But predictive analytics can push these initiatives into a much higher gear, providing a uniquely powerful impact when it comes to solidifying those all-important bonds with customers. Through better analysis and use of data that’s already available to most financial institutions in petabytes, it’s possible to learn more about customers, and consequently offer them more relevant service, support and product options. The right, internal approach to applying predictive analytics, therefore, results in benefits for both customers and the financial services providers they work with — a true win-win situation.

Historically, banks — especially large ones — tend to lean more toward conservative, careful approaches to new strategies and technology than quick movement and adoption. Given the mound of compliance mandates that govern their every engagement, this is understandable. But it but can be a significant drawback. This is where predictive analytics can sharpen their game. Many institutions have demonstrated a resistance to adopting this specific tool, or have used it in a very limited way. But they’re missing out on the benefits. And understanding the inherent pitfalls in predictive analytics is key to achieving success in deploying it.

How Financial Institutions Can Effectively Deploy Predictive Analytics

It’s a given that cross-selling and upselling help create more lifetime value from customers. But finding strong connections between products and clients is still a complicated process; particularly when you have to juggle moving parts, such as customer credit scores, income, credit utilization, and the like. Figuring out what products you can sell to whom, and predicting what those outcomes will be, constitutes a successful cross-sell. When done correctly and ethically, cross-selling can ultimately strengthen the customer relationship into a lifetime value — read, profitability — for the bank. This is because they’re able to match a product that was needed with a demand that they’ve identified.

It’s 20/20 hindsight, but we all know about the debacle of Wells Fargo’s unethical cross-selling and upselling, and how much trouble it got into as a result. With upselling, predictive analytics can really make a difference in the campaign to upsell. And unlike the Wells Fargo situation, this approach is sustainable. Looking through vast amounts of consumer data can help banks to understand how relationships have historically evolved between the bank and its consumer over time. On the consumer side, the spotlight is on how their data is being used. Only by robust analysis of customer behavior — ideally where multiple products are being offered — can banks regain their customers’ trust that their data is being used to benefit them.

Predictive analytics platforms can conduct this type of analysis, leaning on demographic information, as well as purchasing and financial data that institutions already have from past customer activity. All in real-time. Such an analysis would be prohibitive in terms of time, were trained experts to do the crunching. The predictive analytics tool can then offer sharply defined, personalized, relevant recommendations for staff members to share, while they continue to provide the critical human element in the cross-selling and upselling processes.

Where does this data come from? The sheer volume of payments data that banks gather, whether credit card, utilities, rent or many more — can inform what financial product the customer might be looking for and can afford, creating a sharper, more relevant offering. And that’s where artificial intelligence and predictive analytics can play a role that helps bankers sharpen their game and engage more successfully with their customers, without throwing them on the mercy of the bots. Incidentally, it also proves the notion that artificial intelligence is less about displacing humans and more about helping them perform higher-value work.

Securing profitable customers — back to the lifetime value concept — is job No. 1 for banks, whether small or large. Successfully cross-selling — truly matching a product with an identified need — goes a long way to strengthen that customer relationship. The current financial services landscape is ripe for improvement through the use of predictive analytics. Many institutions are already using advanced analytics, tied to marketing and basic interactions — but few have developed strong processes that focus on understanding customer habits and preferences. From there, they can use predictive tools to become more relevant, valuable — and humanly available — to their clients. The institutions that manage to do so will have an advantage in building stronger, longer-lasting relationships and will enjoy the increased value that comes from them.

With thanks to Carol Sabransky, SVP of Business Development, AArete, who made substantial and insightful contributions to this article.

Financial Services Companies Focus on Delivering a Better Customer Experience

As I conduct more interviews with IT professionals, it’s clear financial services companies (banks, brokers and insurance) are investing a lot of money and resources into leveraging data to provide a better customer experience.

As I conduct more interviews with IT professionals, it’s clear financial services companies (banks, brokers and insurance) are investing a lot of money and resources into leveraging data to provide a better customer experience.

Better late than never. Banks have long had a plethora of information about clients; whereby, they should have been able to suggest products and anticipate needs based on life events (college, first job, marriage, home, children, job change, retirement, etc.). Unfortunately, the data was in silos and they were not taking a holistic view of their customers.

Slowly but surely, this is changing as:

  • Rocket Mortgage enables customers to get approval for a mortgage or an equity line of credit in minutes.
  • Square enables sellers to process credit card transactions via smartphones or tablets.
  • Mint provides free, web-based financial management software.
  • Robinhood provides zero-fee stock trading.
  • Personal Capital provides online financial advice, personal wealth management and algorithmic trading, for much less than a traditional broker.

These companies are providing a seamless user experience (UX) across a multi-platform and multi-device landscape. They’re providing real-time information of value to educate customers and prospects. In a recent study, Oracle found that 80% of consumers are accessing their financial institution digitally.

Several banks have automated their loan processing so they are able to get more accurate and complete information upfront and provide loan approval the same day, rather than in 30 or 45 days. The process is better for the financial institution, as well as the customer.

But Are Traditional Financial Institutions Too Late?

After having moved half of my investment portfolio to the algorithmic trading arm of Edward Jones, I decided to move it all to Personal Capital, the algorithmic trading arm of Pershing.

As with most things, I believe we will see a range of activity and acceptance based on the people I interview in the big data, artificial intelligence (AI), and machine learning (ML) space.

I’m still waiting for the first FinTech, using AI/ML, to guarantee the security of my personally identifiable information (PII) and my money. The first FinTech to do this will quickly become a market leader for more conservative consumers and investors.

We will continue to have FinTechs using AI/ML to make customers’ lives simpler, easier, saving them money and giving them incentives to share their information. Consumers who are less concerned with the security of PII and more concerned with “deals” and CX will be attracted to these FinTechs.

It will be fun to watch it shake out over the next couple of decades. I believe companies that remove friction, eliminate pain, make customers’ lives simpler and easier, and do so securely will ultimately win share of wallet.

What do you think?

What One FinServ Marketer Gets About Print and Direct Mail

I was happy last week to see a brand new print magazine pop up in the mail from American Heritage Federal Credit Union.

Financial services can be complicated to contemplate. Well, for me at least. There are so many options available now – both from traditional institutions and all of the online disruptors — but who has the time to look at them all?

This is why I was happy last week to see a brand new print magazine pop up in the mail from American Heritage Federal Credit Union.

American Heritage is the 121st largest credit union in the country, with 800 sponsor companies and nearly 160,000 members (full disclosure: I’m one).

They call this The Patriot, and reading it has been really interesting. It’s a full 8-1/2”x11” with 24 pages of promotional copy and features, and lots of content.

Now, I don’t have to tell you guys about all of the studies out there talking about how our brains process digital information and print differently. There’s plenty of research to show that paper leads to better recall of messaging by consumers.

Print is tangible. When it’s done well, there’s real value holding a simple saddle stitched, high-quality paper magazine in your hands. It can stick around a while, too.

Inside the front cover, there’s a note from Bruce Foulke, American Heritage’s President & CEO. “We offer you the right financial solutions because you’re family,” he writes.

Because it’s a member-owned nonprofit, it can provide products and services that banks can’t. Smartly, they’re listed up front in the magazine.

The magazine runs through some of American Heritage’s history, as well as how it continues to be an important part of the community today.

I loved the 4 pages on recent fundraising events like the “Gelatin Olympics,” and its “Books for Kids” and Ronald McDonald House programs.

And a lot of the content is very helpful, with articles on raising your credit score, or tips for homebuyers.

But sometimes personal stories do a great job promoting a particular product or service.

This one relates how a family used a home equity line of credit to pay for a swimming pool, thanks to the credit union’s personal assistance.

Throughout the magazine, calls to action give members plenty of ways to engage with the credit union. Whether it’s live community seminars, or the website, the app, its offices … they all help build the brand. And to make sure I didn’t miss it, an email dropped on Wednesday that pointed me to the Issuu version embedded on American Heritage’s website.

It’s great to see such a strong affirmation for print as part of a multichannel mix in the financial services industry!

 

 

Free Dinner and Intelligent Discussion? Sign Me Up!

We all know networking events are either spot on, or well, you get cornered by some dude who wants to tell you his life story. What if I told you Target Marketing was hosting something that’s a solid leap above your typical networking event, pairing an insightful panel discussion from some of the brightest in the industry with a mega-classy happy hour and delicious sit-down dinner?

We all know networking events are either spot on, or well, you get cornered by some dude who wants to tell you his life story.

networking_napdynoWhat if I told you Target Marketing was hosting something that’s a solid leap above your typical networking event, pairing an insightful panel discussion from some of the brightest in the industry with a mega-classy happy hour (trust me, I’ve attended) and delicious sit-down dinner?

You’d start asking me for dates, times, locations … and how much.

Well, if you’re in the world of financial services and insurance, then you’re in luck! On Feb. 7, we’re hosting our first roundtable event of 2017. These exclusive industry events are designed with marketing executives in a specific vertical in mind.

Oh, and they’re free to attend for qualified marketers. Because we’re cool like that.

We understand that when it comes to customer engagement, finserv marketers have access to more pertinent customer data than their counterparts in most businesses, yet also face more regulations on using that data. And when it comes to technology, fintech is exploding; but selecting the right tools and staff to oversee them can be not only overwhelming, but also a source of conflict between marketing and IT.

So what are you waiting for? Click on over and get registered for this VIP event now while we still have seats left. I’ll even be there!

 

Blockchain Is Eating Commerce

Blockchain is a technology that has the potential to become a disruptive force in the ever-more digital economy. Its potential value — coupled with friends, clients and business partners asking about it — led me to publish this outline and answers to many of the questions I’ve been fielding. It’s something every Data Athlete will want to understand.

BlockchainYou may not be familiar with blockchain. Many “in-the-know” digital folks aren’t terribly familiar with blockchain; what it is, or how it works. I was surprised by how few were.

Blockchain is a technology that has the potential to become a disruptive force in the ever-more digital economy. Its potential value — coupled with friends, clients and business partners asking about it — led me to publish this outline and answers to many of the questions I’ve been fielding. It’s something every Data Athlete will want to understand.

Blockchain Starts With Bitcoin

Blockchain is essentially a distributed database, which means it’s like the database you know that lives on your server or in the cloud — except that it’s spread copies of itself around the Internet or network. A distributed database has the benefits of fault tolerance and transparency — more than one “node” on the network has a copy of the data. Blockchain also utilizes strong cryptography that prevents changes to the transactions content — they are permanent.

These characteristics were developed to support the exchange of Bitcoin, the now famous crypto-currency that is being used worldwide to facilitate a myriad of transactions.

Bitcoin is said to concern banking institutions and governments alike — as its decentralized nature means no one nation owns or controls it. Bitcoin and its underlying Blockchain are like the “MP3 of currency” in the early ’90s. Bitcoin.org summarizes the power of its decentralization:

“Sending Bitcoins across borders is as easy as sending them across the street. There are no banks to make you wait three business days, no extra fees for making an international transfer, and no special limitatons on the minimum or maximum amount you can send.”

So in order for Bitcoin to be a “free” and universal currency, it could not be centrally managed or controlled; hence, blockchain was created first — Bitcoin actually started the following year.

Furthermore, each and every Bitcoin has a copy of every transaction/exchange it was ever involved in. All of the data on that chain is distributed to every blockchain-distributed journal (or database) across the Web.

What Is Blockchain Used for Today?

Blockchain’s most prevalent usage is in Bitcoin. But remember, it’s an encrypted, distributed database. And so, blockchain technology also securely moves and stores host money, titles, deeds, music, art, scientific discoveries, intellectual property and even votes.

As a (distributed) database that is as open, borderless and secure, blockchain continues to find new uses, and has been adopted by every major technology company. IBM, for example, made an early investment in blockchain technology and IBM Blockchain.

“Blockchain technology also securely moves and stores host money, titles, deeds, music, art, scientific discoveries, intellectual property and even votes.”

Blockchain 2.0 — Triggered, Programmatic Transactions

Blockchain 2.0 is the rapid evolution of blockchain, and where blockchain offers the potential for transformation of the way we engage in commerce and business at an Internet scale.

Remember, blockchain is a distributed, cryptographically secured database. It makes sense that an evolution would allow programming code, or chain code, to manipulate the transactions in a blockchain — and that’s exactly what has happened.

In one example, SAP is using blockchain software to let patients share electronic medical records with doctors or drug makers for a specific time period, such as during medical care or a study.

In another example, they designed a system for farmers’ weather insurance. It pulls rainfall data from sensors in the field, then automatically informs insurers if there’s a drought that would trigger a payout.

Dinner Next Week in NYC for Financial Services Marketers

I’m hosting a dinner in New York next week for financial services marketers. This is something we’re working on doing more often. A chance for our readers to meet up with people in similar jobs and companies, have dinner, hear from an expert panel, and get some of their questions answered by peers in the field.

Brent Reinhard, Chief Marketing Officer - Chase Business Banking, JPMorgan Chase & Co.
Brent Reinhard,
Chief Marketing Officer – Chase Business Banking,
JPMorgan Chase & Co.

I’m hosting a dinner in New York next week for financial services marketers. This is something we’re working on doing more often. A chance for our readers to meet up with people in similar jobs and companies, have  dinner, hear from an expert panel, and get some of their questions answered by peers in the field.

We have a great lineup for that panel discussion, too: Brent Reinhard, CMO of Chase Business Banking; Lizzie Massey, SVP, Marketing Products, Synchrony Financial; and Cortney Klein VP, Director of Advertising and Communications, WSFS Bank.

Lizzie Massey, SVP, Marketing Products, Synchrony Financial
Lizzie Massey,
SVP, Marketing Products,
Synchrony Financial

The actual discussion will be off the record, so don’t expect to read about it here afterwards. But what I hope we can accomplish is for the marketers in that room to be from fairly similar businesses — large banks, credit card companies, insurance companies, etc. — and be able to talk about the similar issues and opportunities they face, as well as benefit from each others’ expertise.

I hope they’ll make connections, both personal and in their ideas.

Cortney Klein, VP, Director of Advertising and Communications, WSFS Bank
Cortney Klein,
VP, Director of Advertising and Communications,
WSFS Bank

If that sounds like you, check out the website and register!

If you’re not in enterprise financial services, don’t worry, we’re going to be doing more of these in the future for different industry verticals.

When we do yours, what would you like to see from it?