Marketing To Groups
By Pamela M. Green
When it comes to marketing bank services to various age groups, we asked several bank marketing officers if they do anything special to appeal to the different generations. Do the techno-savvy Gen Xers and Millennials want electronic services only? Do the Traditionalists dismiss Internet banking? We found in most cases that banks must deal with a wide range of reactions to products and services among people of all ages.
Cheryl Mullen of Bar Harbor Bank & Trust said her bank revisited its retail deposit product line and packaging from a demographic point of view. Using 2000 census numbers, they decided what age brackets exist in marketing and developed packages to suit specific needs. As a result, the 50-plus package is one of the bank’s top products, catering to a large population of people in that category in a couple of branch locations.
BHBT wanted to do more for people in the 25-59 age group starting families, so they developed a package that incorporated lending and home equity products along with free checking and low-rate credit cards. For the 18-25 year olds, the bank designed a simple Internet online banking service. The project was very interesting and actually fun, according to Mullen, since it involved a task force with input from all areas of the bank. In her view, “If you don’t begin to look at the true demographics of our market, you’re just saying that one size fits all, come in and we’ll find something for you.” In reality, tailoring something makes it easier to market – and the bank decides which of its locations has the demographics to relate to specific products.
Reality is the name of a line of products developed about four years ago by Norway Savings Bank for three distinct generations. “Reality First” is designed to meet the needs of 28-to-34- year-old Generation X customers who are getting started. “Reality Plus” targets customers in their household/family building stage, typically ages 25-54. They have expanding needs for housing and credit, a growing family, and additional needs for insurance protection. “Reality Complete” is designed for the mature empty-nesters, ages 41 to retirement, who may be continuing to develop their careers and are likely to be building an education fund for children and a retirement fund for themselves.
Norway’s success with this targeted marketing is astounding. According to Director of Marketing Karen Hakala, Reality account customers have more services than others, higher balances, are more profitable and are retained longer. Reality accounts have 44.81 percent more accounts per household than households without Reality (street households); 54.5 percent more services; deposit balances 313 percent higher; loan balances 147 percent higher and they are 405 percent more profitable than street households.
For most banks, looking at demographic trends involves looking at geographic locations. Bath Savings offers separate products for different stages of life, according to Marketing Director Barbara Gaul, but markets them more geographically than demographically. While branches in Damariscotta and Boothbay serve many retirees, Brunswick and Northgate in Portland serve a younger demographic. The bank offers products of all types, such as online mortgages, free checking to customers over 55 and investments for baby boomers starting to inherit wealth and take 401(k) distributions. Said Gaul, “We look at the location of branches and the socioeconomic trends in that area when determining what we should be looking at for marketing.”
First Citizens Bank Marketing Officer Susan Grove-Markwood tries not to align age groups too closely with specific products. She cites as an example her 29-year-old son who is computer literate and uses computers on a regular basis but who does not embrace high-tech banking.
“He uses Internet banking only because he lives away,” she said, “but he would still rather write a check. People are people no matter what demographic slide they’re in. They will always jump up and amaze you.”
Michelle Nappi of Gorham Savings Bank reflects a similar attitude.
“You might think you know what Gen X and Gen Y need, but everyone doesn’t fit into the mold. It’s not that simple. Older people like some of the high tech products.”
Listening to Employees
Banks would do well to use their own employees as a sounding board for products and services. Let your own Generation Xers or baby boomers tell you what they need. And listen to them. They are a free, built-in source of information. In their book, “When Generations Collide,” Lynne Lancaster and David Stillman relate an eye-opening experience they had consulting for a national department store. At an employee workshop on marketing, the Gen X buyers in the workforce expressed frustration at the marketing focus of their own company, complaining that they could not even shop at their own store because it stocked nothing for them. This was invaluable information that management should have used to aid in attracting a whole unserved demographic. Yet senior management chose to ignore the input because the Gen Xers make up a relatively small demographic group. Generation Xers consequently left the company in large numbers, and the company continued to lose market share.
Significant events shape the value systems of different generations. Age and lifestyle can be predictors of certain banking needs. Beyond those basic assumptions, banks must be on their toes to find the right mix of products for their own geographic and demographic markets. Said Michelle Nappi: “Customer satisfaction surveys always reveal that customers want bank services to be easy, accessible, convenient and simple. Other than that, it’s hard to predict.”