A recent poll reveals that banks’ most loyal customers are their oldest customers. While Generations X and Y are the retail banking customers of the future, the poll indicates they are also the least loyal and hardest to please. Why is this happening?
A recent poll reveals that banks’ most loyal customers are their oldest customers. While Generations X and Y are the retail banking customers of the future, the poll indicates they are also the least loyal and hardest to please. Why is this happening? For a few reasons: CONVENIENCE The current customer experience model at banks caters to older generations, who more frequently bank in-person at branches. But, younger generation customers are much more mobile and rely more heavily on online interactions. Locational convenience has always been the primary tool for attracting new banking customers. That’s no different with Gen X and Y, but the definition of locational convenience is changing. Now it includes online and mobile and they expect anytime-anywhere banking. Banks need a strategy to attract and retain prospective customers who rarely step into a banking office. It is no longer uncommon practice for businesses to reach out via social media in an attempt to attract these younger customers. Even companies like Bank of America are using social media networks like Facebook to try to connect with them.PRODUCTSBanks have remained focused on building long-term relationships with their customers, but the needs of Gen X and Y are considerably different. Banks need to identify and offer products and services that give young people roots at the bank. For example, be the source for their first primary debit card – Gen X and Y comprise the debit card generation. Highly incent them to migrate to online banking with a significant reward for paying bills online. Stay in tune with how younger customers want to connect — online banking, bill pay and mobile banking are three customer touchpoints that must be state-of-the-art and part of every bank’s overall customer experience.SERVICEAlso, ensure that the customer experience is appropriate for Gen X and Y (fast, convenient, service-oriented, technology-based) and consistent at all major bank touch points. In general, the survey results show that younger people can be more impatient, less tolerant and just plain harder to please than their Baby Boomer and Traditional cohorts: 37 percent believe they would get better customer service at a different bank; 22 percent reported being upset in the past year about high fees; 18 percent reported being upset about a lack of ATM locations. Make sure front-line employees are treating Gen X and Y the way they want to be treated and can solve problems on the spot — a key to securing lifelong patrons. Washington Mutual is one institution that successfully caters to the needs of younger customers, no longer requiring a signature to open a checking account. The bank simply uses the first signed check as the authorization signature — incenting new customers to do business with the bank by simplifying the process and eliminating a trip to the bank. BANKS VS. CREDIT UNIONSUndoubtedly, banks will need to do a better job servicing younger customers to win their loyalty and favor. And banks are now facing intense competition from credit unions, which seem to be doing a better job of targeting X and Y. (As a banker’s daughter, it’s not easy for me to admit that.)For example, a 19-year-old who is the “spokester” for Young and Free in Alberta, Canada is collaborating with Common Wealth Credit Union to create awareness for their under 25 age group.Her video blog explains the difference between credit unions and banks in very simple terms. It was created in an effort to attract and educate generation Y members. The video was posted January 2008, and by the following Monday afternoon, the video blog had been viewed nearly 4,000 times! To date, it has been viewed 29,317 times. Check it out below:
And then there’s bankerspank.com, which is a Web site of video snippets promoting credit unions and an online store where you can buy t-shirts and other kotchies to visually express your disinterest in banks. The site features links to the Credit Union National Association and World Council of Credit Unions. Check out one of the bank spank videos here:
Banks, all I can say is that you have some work to do! The future is here. The future is now. What – and who – will you become?