Let’s face it; these days, a large portion of the folks looking to take out loans are millennials and others around their age. The Millennial and Gen-Z generations are coming of age and entering the market for things like a new home or a new car.
Targeting this particular demographic is super important. And as a credit union, you have the unique opportunity to offer them the best consumer lending options out there. Here, we’ll go over the four most common types of loans and how you can hone in on marketing strategies to target younger borrowers and their needs.
Credit unions have the advantage.
As a credit union and a non-profit, your goal and mission statement is to serve your community. This purpose gives you the upper hand compared to banks who just focus on the bottom line and making their executives happy.
Take the opportunity to use your credit union’s community engagement and support to gain the consumer lending of the younger generations. Potential new members for your credit union of Gen-Z and Millennial generations are now more involved in their community and value outreach efforts.
To be clear, the group of individuals that fall into the Millennial category is roughly between twenty-three and thirty-eight years old. The next generation is Gen-Z. Generally speaking, anyone born after 1997 is a Gen-Z.
Now we admit, there are some dangers in generalizing and lumping people into categories strictly based on age. However, for your purposes of offering helpful support to the community by providing quality consumer lending options, it’s a good idea to grasp what captivates and motivates those groups.
Millennials need a home loan.
Millennials account for a staggering forty-two percent of loans for new homes. That’s a pretty significant pool of potential new members. Most of them are still at the stage in life that they are looking to buy a starter home. Though there are exceptions and, remember, the age range in this demographic is relatively broad.
But the numbers don’t lie, with up to sixty-five percent of Millennial borrowers being first-time homeowners. An even more impressive stat to be aware of is that an incredible ninety-eight percent of those homeowners financed that purchase through a lender.
Millennials are starting to want to settle down. You can help them see that your credit union is the right choice by highlighting how you will help them through such a huge life decision.
Try offering outstanding price calculation and comparison tools. Nobody wants to pick up the phone for information anymore, so don’t make them. Luckily, this generation is super tech-savvy, so they’ll be able to figure out a calculator tool that estimates costs for them.
Corning Credit Union offers a price calculator for pretty much every lending option they have. How long will it take to pay off a loan or pay off a credit card? Even retirement and savings calculators. It’s simple and easy to use, which is exactly how Millennials want it.
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Student loans
Let’s shift gears to focus on the slightly younger end of the spectrum. The younger Millennials looking to go back to school and the older Gen-Zers who are just graduating high school are looking for competitive consumer loan options for student loans.
As a credit union, you are coming from a place of caring. You are about your members and the outcomes that your consumer lending yield. Building up your members builds up your community.
College graduates earn about $30,000 more per year than non-college graduates. Investing in your younger members’ education reaps benefits not just to their personal futures but also to your community’s financial health as a whole.
It’s important to recognize that getting a student loan is often the first major financial decision in a young person’s life. They likely have little to no experience with financial institutions and may not have anyone in their corner to help them through the vast array of financial services.
You can be the one to give them a hand. Offer education, guides, and learning tools. Gen-Zers that are looking to the future can use some financial guidance and advice. But don’t lose sight of the demographic you’re aiming for. Old school pamphlets are not going to cut it.
Keesler Federal Credit Union rocks at this! They offer a million free educational resources like guides for independence and articles written for and by people of this demographic. Plus, they link you with a direct Financial Counselor, making the experience much more personal and engaging.
One of the most accurate cliches of the modern world is that young people are glued to their phones. Use that to your advantage. Gen-Zers texts, and so should you. Use a messaging tool to communicate with members about the student loan services that you have to offer.
Auto loans
In recent years, Millennials have become a significant leading demographic of people seeking out consumer lending options for auto loans. Millennials raise their auto loan balances by as much as twenty-three percent in a single year.
Working with people from the Millenial and Gen-Z generations can present a few challenges since they shop for things almost entirely online, from toothpaste to cars. They do research, price compare, and sometimes even purchase vehicles on the internet. So, knowing that, focus your marketing efforts there.
Since these generations are some of the largest consumers of video content, why not start there? Videos are fairly simple to put together and easy to get out there.
Take the opportunity to make videos that are both educational and engaging. Tell the story of how you’ve helped countless members of the community purchase their dream car.
Robins Financial Credit Union does a great job with videos.
They offer short, easy to understand videos on the basics of auto loans. Regardless of what generation you are, everyone wants concise and clear information delivered quickly. Would you rather read up on the terms and definitions relating to auto loans or listen to a two-minute video that explains it all to you?
Personal loans
You’re going to want to lean your personal loan marketing campaigns towards Millennials and the oldest Gen Zers. After all, Millennials specifically have, on average, twice the number of personal loans than Gen X ever did. And the kids in Gen Z aren’t far behind.
They’re looking to build their lives and futures, seeking consumer lending options for everything from financing a wedding to helping pay for a move to a new city after college. Throughout these times in their life, they need a little extra cash flow and a lot of guidance.
Make your credit union stand out to the younger generations by using social media for personal lending marketing. Come on, did you think we were going to talk about Millenials and not touch on social media?
It’s a great outlet to share beautiful stories from members that are thriving thanks to your credit union’s lending solutions. Everyone loves a heartwarming story. Use platforms like Facebook and Instagram to show off. Make it easy for potential new members to see how you care about changing people’s lives.
Mountain America Credit Union has a fabulous Instagram with nearly fifty-eight thousand followers and two thousand posts. They tell the moving story of partnering with a local food bank.
Helping them helps our future.
Baby Boomers have been the bread and butter of the financial industry for a long time. But, let’s face it, they’re not going to be seeking significant financial lending options for too much longer.
Just like those who grew up during the Great Depression, the young people that grew up and came of age during the Great Recession are warier of big banks than other generations. This opportunity makes them more likely to turn to financial institutions that aren’t looking to make a profit off them, like your credit union.
That’s why Millennials and Gen-Zers are the future of your institution. Marketing to them effectively can mean growing and lasting success for your credit union.
