Millennials. I’m sure you’ve heard that word a lot lately, but do you know what is it referring to ?
– Millennials correspond to the generation of those born between 1980 and 2000.
– The Millennial generation is the biggest in US history (let’s just forget about the Baby Boom)
– They are the most educated generation.
– They engage with their smartphones more than people and 47% claim they couldn’t live without it.
– 77% of millennials have reported to always have their smartphone with them
Well, now it’s time to ask yourself what does it have to do with Banks? You’re surely be surprise to learn that according to the Millennial Disruption Index:
– All 4 of the leading Banks are among the ten least loved brands by Millennials
– 1 in 3 millennials would have no problem to change his bank within the next 3 months, as they don’t see any difference between their bank and all the others
– 71% would rather go the dentist than to their bank
– 33 % believe the won’t need a bank at all in 5 years
– 24% never carry more than $5 cash a day
– 74% say mobile branding is important to them
As Millennials express their individuality differently than previous generations, Banks will need a different approach to seduce these new clients that will soon be the major workforce in the world. That’s why banks have no other choice than personalizing.
By allowing consumers to tailor products to better fit their needs, Banks will have the opportunity to gain loyalty in several ways.
– Personalization will improve customer satisfaction, a primary driver of loyalty. Services that meet customers’ specific needs should naturally be more satisfactory than a one-size-fits-all offering.
– Personalized services will help the customer believe a firm is appreciative towards him or her, increasing trust, another loyalty driver. Additionally, trust is also impacted when the customers can create their own product with a more transparent risk/reward understanding.
– Personalization also increases stickiness as consumers will view these services as difficult to replace with another provider. Once a personalized product has been created at their existing Bank, customers are less willing to try and replicate the solution at another institution.
Companies are using personalization to create a competitive advantage for themselves. By offering consumers personalized options, they can differentiate themselves from competitors as well as:
– Retain existing customers through added value perception and brand strength.
– Attract new customers as word of mouth marketing is a highly effective tool and satisfied customers will recommend a preferred Bank.
– Better understand customer demands and needs by collecting and aggregating information from a segment of customers (Big Data). As a result, new products for the mass market segment can be planned more efficiently utilizing this non-biased research.