In the United States, the Millennial segment of the population spends approximately $1.3 trillion, outspending any other generation. By the end of 2018, Millennial buying power is expected to reach $3.4 trillion. With more spending power of any generation, it’s no surprise that marketers continue to focus on this segment like a group of vultures circling above a dying animal.
Because that’s exactly what Millennials should be considered to financial institutions!
Millennials perform all of this spending on a median yearly income of just under $34,000. In short: Millennials, as a group, have no money to speak of. They are a generation saddled with more debt than any other generation, current or past. If I were writing this blog for a group of retail marketers, this is good news. More spending! More earning!
But we’re not in the business of selling consumer goods.
With just 4% of the nation’s wealth (compared with 50% for Baby Boomers and 33% for whoever is left in the Silent Generation), Millennials are a leech on financial institutions. Most of the incredible debt load they carry is tied up in student loan payments, rarely benefiting the community banks and credit unions they patronize.
So where do marketing dollars and focus need to flow to, if not Millennials?
- Focus on audience planning. Create custom messages for your consumers that pay off your organizational objectives instead of segmenting consumers into larger groups.
- iGen is coming. This generation is going to be much more wealth-building and smart-debt focused than the previous Millennial generation. Good news for financial institutions!
- Wealth transfer. The 33% of the nation’s wealth tied up in the Silent Generation is about to change hands. If your organization hasn’t already, now is the time to partner with a wealth management expert that can help your consumers transfer the wealth.
Largely, though, focusing on growth areas for your financial institution means changing the tone of a conversation that marketers have been having for the past decade. What does this mean? It means stepping away from target markets that bullet point “Millennials.” It means telling senior management and the board that growth from Millennials is a terrible strategic objective.
Millennials have had and will once again have their time in the spotlight. Now is just not that time for financial institutions!