With today’s property prices, few Australians under the age of 40 can afford to buy a house. So why do banks keep marketing to us as if we can? Lucy Baldwin (pictured below) has some advice for financial institutions looking to target Generation Rent.
Fact: much of the marketing young people receive from financial institutions is simply irrelevant. While bank marketers have long embraced life stage marketing, the traditional life stages our parents and grandparents experienced continue to diminish. And home loan offers especially are falling on deaf, jaded ears.
Only 23% of millennials live in homes that they own with more than 40% of first-time buyers over the age of 40. According to Goldman Sachs, in the coming years, buying your first home in your mid-40s will be the norm.
At the same time, marriage rates are decreasing year-on-year across the developed world. There are now a whole new set of life stages such as living with your parents while searching for a job, house sharing, or saving money and getting a second job to cover the rent for the 20 odd years you’ll be paying for someone else’s mortgage instead of your own.
That’s why it really irks me that I constantly receive emails like this one:
While I understand banks need to sell products – I do work in the marketing industry after all – this piece of collateral, and the hundreds more I have received just like it, is completely irrelevant to me. And at a time when financial institutions have vast arrays of data to profile customers, there is simply no excuse for such hit and miss direct advertising.
Instead of sending the same marketing collateral that our parents might have received at our age, why not embrace the simple truth that we aren’t living the life they did and try something a little different on us? Something with a little insight and empathy. Here’s a start…
Tell it like it is
We’ve done the sums and we’re smart enough to know we’re a long way from buying our own house or, for some of us, moving out of our parent’s place. It would be refreshing if financial institutions could acknowledge that and suggest some savings and life goals that are a little more realistic.
How about cleverly designed offers that address real-life challenges that require financial assistance? From the increase in gap years or sabbaticals, the extension of education into second and third degrees or even women freezing their eggs to extend their career or buy time to find Mr or Ms Right.
Give us a purpose to rally behind
There’s plenty of research out there to suggest millennials are more purpose driven than previous generations. It’s important to us that the things we buy into do not harm the planet or the people in it. Even better, we like to choose products that support a good cause.
The most exciting financial advertising I received this year came from CBA. The organisation is offering to waive brokerage fees for investing in ethical funds that donate a portion of revenue to youth charities. This ticks two boxes: CBA makes it possible for me to make an investment in my future that is within financial reach and, in the process, help others.
Give us an incentive to save, not spend
We know interest rates are at an all-time low, so why not take the initiative and give us new incentives to save money instead of encouraging further credit card spend? How about rewarding savers with frequent flyer points, cinema tickets and vouchers? Sure, it’s an investment, but in the long term, it will pay dividends when more of us have the savings required to invest in high-value products like home loans. And more importantly, the bank will have helped us and built a relationship along the way.
We love the sharing economy, give us another way to embrace it
It doesn’t get more millennial than the sharing economy. We embrace Uber and love Airbnb. so why not give us new ways to share that enable us to achieve our financial goals a little faster? For example, pooling funds with friends to invest in shares, or to get a home loan. Or even tools to make sharing rental properties simpler.
Whatever tactics financial brands choose to adopt, the point is clear: traditional life stages are fundamentally changing. Banks need to wake up, stop peddling the same products they always have and take advantage of the fact that the challenges faced by younger customers today offer a great opportunity to create enduring brand connections.
Lucy Baldwin is a Strategy Consultant at independent branding agency Principals.