It's high school graduation time — or, put another way — new checking account season.
Each spring, millions of American students graduate high school and prepare for college. And along with new sheets, shower shoes and storage solutions for small dorm rooms, many will open new checking accounts between now and the fall — and for many this will be their first dip in the financial services pool.
Though many of these members won't be utilizing their credit unions for more than basic account services the next few years, many CUs are attempting to reach them early so that they can build relationships and be top of mind when those members need credit cards, car loans and other more profitable products.
At Montgomery County Employees FCU, CEO Jim Norris explained that last year, as part of its strategic plan, the credit union determined it needed to boost its Gen Y penetration.
"By the end of next year we hope to be at 22% Gen Y, because 24% is about the average nationally at credit unions," Norris told Credit Union Journal. "One of the things we've been doing over the past couple of years is gathering a Gen Y sales force... and at this point almost 50% of our staff is Gen Y."
Norris explained that while bringing in such a high concentration of Gen Y staff wasn't intentional — "As we turned over staff we wanted to attract the best and brightest, and they just happened to be Gen Y," he said — hiring so many young staffers got the word out about the Germantown, Md., institution being a good place for young employees.
Much of the $108 million credit union's Gen Y efforts are being led by sales and service director Jorge Saenz, who said one strategy the MCEFCU has taken for the last two years is participating in new-teacher orientations for Montgomery County public schools, which allows them to introduce the CU to educators who are new to the field and, more often than not, Millennials.
"By going to these events we capture a lot of that Gen Y audience," Saenz said.
Splitting Hairs, Demographically Speaking
Most CU executives agree that, Gen Y — or Millennials, since the two terms are generally used interchangeably — comprises consumers ranging from age 18 to 34, and Norris clarified that when he thinks of that demographic and how they hope to increase their market share there, Montgomery County Employees FCU thinks of them in two different life stages.
"There's the younger Gen Y and the older Gen Y," he said. "What we call a credit-driven Gen Y' as opposed to a fee-driven Gen Y. Credit driven, they've got an established job, they've got things going on — they need a mortgage, cars, etc. That group's probably 25 to 34 years old. Age 18 to 25 is more the fee-driven. They're just getting out of college, have some part-time jobs, et cetera. So there's a big difference between those two components."
Having a young staff that understands what members of its own age group want in a financial institution can help attract that demographic, but a little something sweet doesn't hurt either. That's why since 2012 the credit union has partnered with nearby shop Georgetown Cupcake to help promote itself by handing out free cupcakes at various events.
"We love cupcakes here," said Saenz. "We've developed an ROI from cupcakes. Georgetown Cupcake is just a few miles down the road from us and that's a brand that's very identifiable brand.... Georgetown Cupcake has our logo now on our cupcakes that we purchase from them. We have events where we hand out those cupcakes. They're not inexpensive, either — they're good cupcakes."
And the cupcake strategy seems to be paying off. Since the partnership with the cupcakery was launched in 2012, loans have grown by 49% and assets have grown by 26%. It's not all tied to the cupcakes, of course, but Saenz and Norris said the sweet treats don't hurt, either.
Saying So Long To Stodgy
Connex CU in North Haven, Conn., is now in the fifth year of its "VP of Unbanking" program, in which a college student takes a one-year part-time position with the credit union. Not only does it allow Connex to focus on a particular project each year with that student — anything from social media outreach to increasing the CU's presence on college campuses — but it gives Connex insight into the Millennial market.
"I can't attribute it all to that position, but from the time we instituted the program to today we've had about 24% growth in that segment of members," said Carl Casper, VP of consumer advocacy at the $437 million credit union.
Back in 2009 that demographic — specifically the 18 to 22 age range — represented only about 10% of Connex's overall membership, whereas today that figure has risen to about 18%. He cautioned however, that it's not a static number. "People are aging out of that, but we're also adding people."
Casper pointed out that while many older employees are on social media, they may use it differently than the younger cohort. "Having somebody that's on the ground, so to speak, that really understands how to use those mediums and to reach people, has helped us a lot."
An influx of younger staffers and members also impacts how Connex positions itself, explained Casper.
"We're trying to position ourselves as their financial advocate and not just the stodgy old bank," he said. "We're actually here to help you, and we understand that maybe you're new to this. It's all about trying to help educate them and make them feel like they're a member and that's part of what membership provides for you."
Mazuma Gets Hip
Another credit union that is avoiding the "stodgy old bank" persona is Mazuma CU in Overland Park, Kan. — a Kansas City suburb — which rebranded last year with a new logo and the tagline "Bank Happy." Recently, Mazuma unveiled a new ad campaign that aims to put some levity into banking while also speaking to consumers with a voice unlike many others in the financial services space.
The $509 million credit union recently debuted its fictitious spokesman "Mazuma Mike," who brings a hip — if clueless — tone to Mazuma's advertising.
"They share their profits with their members? I can make my own money!" Mike quips in one spot, immediately followed by a shot of the spokesman working a table at a grade school bake sale.
In another ad, Mike has to have a Mazuma MSR explain to him that lower rate on a credit card is actually better for him as a member. "What kind of sorcery are you pitching here," he responds.
"The tone is very important to us, and how we write and communicate even down to our website, which is not your standard website as far as the copy goes," said Andrew Dickhut, brand manager at Mazuma. "We've put some winks and irony and cleverness into everything we write."
Dickhut explained that most banks and CUs lead their marketing with banking jargon and a focus on product features and benefits. "We try to lead with personality first in everything we do," he said. "You can't just cram information down people's throats anymore. You have to entertain them as well. We try to take the standard banking stuff and wrap it in a different package."
While Mazuma Mike is aimed at members (and would-be members) in their twenties and thirties, Dickhut said that some older members have been rubbed the wrong way by the campaign. But many others are coming along for the ride, too.
"They're having fun with it as well, but you can't please everybody, as we've found out," he said. "But if you really want to make a difference you've got to stick to your guns and you've got to be true to who you are, even if there are people out there that don't necessarily like it."