By Preetha Pulusani
OWhile there is a lot of discussion and knowledge shared about marketing that appeals to millennials or how to reach Gen Z, it’s extremely important not to leave the baby boomer generation in the dust.
With a population of 76.4 million, the baby boomer generation is the country’s second living generation. The oldest baby boomers are only 75 and this generation is aging young. In order to keep pace with their grandchildren, baby boomers are taking advantage of their disposable income to experience the adventures they put off during their working and child-rearing years. Plus, in most cases, people report feeling about 20% younger than they actually are, according to a Michigan State University study of aging and the perception of age of more than 500,000 people. Older people generally say they feel younger than they look, and those who report feeling younger actually tend to live longer, healthier lives with less decline, the study found.
But perhaps the most important statistic that financial institutions should be thinking about is related to wealth. Millennials dominate the American workforce, but they own only 6.4% of American wealth. That’s nearly eight times less of the American wealth than the 50% held by baby boomers.
Keeping baby boomers at the center of customer engagement efforts should be a no-brainer. What does this mean for financial institutions? Here are three key tips to follow:
1. Make it easy for yourself
With ages ranging from the mid-50s to the mid-70s, many baby boomers are actively involved in managing the finances of their adult children and aging parents in addition to their own. The good news is that these intergenerational interactions are encouraging many baby boomers to be open to the benefits that technology can bring to their banking experience.
Seven in 10 baby boomers bank online at least once a week, and their use of mobile banking is growing exponentially as more of this generation use online banking, check deposits mobile phones, remittances and payment options each year. This means that banks have a great opportunity to promote these financial services to a targeted group segment that will appreciate the simplicity and 24/7 access that online and mobile banking can bring.
Making things easier and making the whole digital experience a positive one goes a long way.
2. Secure it
In recent years, the adoption of mobile banking tools for baby boomers has increased, but their use has increased in response to the pandemic. Nearly 90% of baby boomers agreed they would continue to use digital technology to make everyday life easier once the COVID-19 pandemic is behind us. Most baby boomers are more than willing to adapt. However, the 2008 recession hit their wallets hard, causing skepticism about their trust in FIs and lingering suspicions about online banking exchanges.
Due to fear of fraud or security breaches, baby boomers like the idea of security alerts attached to their accounts in conjunction with a local branch or representative who can be easily contacted. Transparent communication around all safety efforts and protocols is a top priority for this demographic. One way to do this is to interact with targeted messages and services while they are already digitally engaged. Digital engagement goes beyond cross-selling products and services.
3. Don’t make ageist assumptions
A recent study found that 27% of pre-retirees plan to work part-time in retirement with no intention of stopping work. A great representation of this generation’s dedication to the workforce and their commitment to staying intellectually engaged, it’s also a way to maintain extra income.
This additional disposable income means that products typically marketed to young adults may be even better suited to the baby boomer generation. New car? Kitchen renovation? Dream vacation? Even small business loans are opportunities baby boomers will turn to their financial institution to help them navigate.
Today is truly the age of the customer, no pun intended. Customers have the power and they will ultimately decide where to look for their next financial product or service. Banks that improve their understanding of their customers will be able to better serve and engage them and gain a real competitive advantage. This will double for this increasingly powerful demographic.
Identifying audience segments, from Baby Boomers to Gen Z, and going even further to understand micro-segments to create comprehensive, personalized communications relevant to every banker’s financial journey is key to success. Engagement technology is more accessible than ever before. It is also driven by more and better data insights and insights (including AI/ML), increased automation and efficiency, and powerful performance analytics. Taking advantage of this today will have a huge impact on a bank’s ability to retain customers and increase revenue. In other words, it will have a big impact on the future of a bank.
Preetha Pulusani is the CEO of DeepTarget, a fintech company that helps financial institutions grow. For more information, visit www.deeptarget.com.