Credit Union Geek

Marketing, Strategy, and The Force by Joe Winn

Tag: millennial

Status Quo, Without the Quo

What happens when the status quo breaks?

Take a look at Moore’s Law. It is the basis for chip development (the brain of your computer, phone, iPad, or even car stereo) which states that the number of transistors (tiny pieces) double roughly every 18-24 months. If you had 50 people in your full branch, and you wanted to fit 100, what are your options? You could either double the size of your branch (can’t do that here) or, shrink each person by half (transistors are ok with that, to a point, members, less so). The latter is what has been done with chips for almost 50 years (no members were injured in the process).

Highlighting this rapid advancement of technology (why your phone is faster than your 5 year old computer) is Intel’s “tick-tock” development schedule. Begun in 2007, they aimed to release a “tick” update one year, then the next, “tock”. One was a shrinking of the processor, the other, a refining of the capabilities. This consistency made it easy to predict when updates would arrive, and what might be in store. On a tick, power consumption tended to go down (better battery life), while on a tock, speed improved.

In July, Intel announced all this was coming to an end, or at least, a slowdown. There would be a third “tock” (they use a strange clock), because making the next smaller chip is really, really hard. We’re talking areas only a few atoms wide. And you get frustrated when a parking space is small! You can read more about what production at these tiny scales entails if interested (it’s awesome, but maybe not to you). If you’re here, you want to know how this can affect the credit union industry.

It doesn’t.

At least on its own. But, you may have your own “tick, tock” strategy that is coming to an undesirable end. How do you approach a problem when your solution for years, or even decades, no longer works? Think of serving Millenials, innovating your digital portfolio, or any number of other issues faced in the rapidly-changing financial services realm.

New challenges bring with them change. You can’t continue the old; new doesn’t yet exist. Whether you realize it or not, your credit union is in the midst of a “tick, tock” Seldon crisis (Free Twitter kudos if you can name that reference). Look to your long-term plans: Do they make sense in the world of tomorrow, or yesterday?

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What Would Your Members Say?

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Imagine a room filled with your members. All of them. Ones who have made your credit union their primary financial institution and those who hardly know you exist. Offer each a blank index card.

A third grade teacher in Denver did this exercise with her students. What was asked of them? To write down what they wished their teacher knew about their lives. They could add their name or leave it anonymous. Surprising truths flowed. One explained how homework was challenging because they didn’t have pencils at home. Another lamented delays in getting their mom’s signature on school forms because they didn’t see her often. It was a moving exercise, and offered valuable, if heartbreaking, advice to the teacher.

Before getting back to the credit union talk, let’s make it clear: Teachers like her are doing important work and should be recognized/compensated as such.

Do you see how this exercise could be of value for your credit union? If you handed out index cards to all your members, what would be written?

When I’m teaching martial arts classes, I often ask a student what someone will do if they use a certain move. “I don’t know,” is a fair answer. How can you be sure of their reaction? Well, you do that technique, and see their response!

What will your members wish you knew? Well, you ask! We read articles daily about how to connect with Millenials (Gen Y). Like everyone else, they want a say. They want a deliberate effort to engage, not a new promotion or product. Connect and learn. What if it became an industry effort? Say, using social media under the hashtag #OurMembersWish. Now that’s @asmarterchoice I can support.

There’s a fantastic TED Talk describing one way to get into a mission, rather than product, centric, mode of thinking with a process called Golden Circle. You’ll recognize it in use with companies like Apple and Harley Davidson, in people like Elon Musk, as well as every non-profit you know.

The index cards? Yeah, they’re in that supply closet, just down the hall. Grab a bunch.

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Oh No! Millennials Aren’t Doing What We Expected!

The average age of a credit union member is 47. So it stands to reason the industry has a love affair with those of a younger demographic. If only they would talk about it!

Truth be told, a day cannot go by without seeing at least one discussion of Millenials and credit unions. Whether it be embracing technological solutions or offering a streamlined approach to lending, everyone has the answer to connecting with this essential generation.

There were challenges, however. Millenials don’t buy homes (mortgages), they don’t use credit cards, avoid owning cars (auto loans), and have no intention of changing. Like the disappearance of Tamagotchi pets, the needs of a generation had changed. Face it, it’s hopeless to even bother being in the banking industry anymore. We’ll be lucky if we can hold some of their meager savings.

Except all of this turned out to be false. When the average Millenial left school, they walked into a global recession, high unemployment, a banking sector in disarray, Wall Street in free-fall, and continuous threats of government shutdowns. Not an encouraging environment to make a stand!

So, they waited. Putting off moving out and getting new wheels for a solid career path, you can almost call them the Hesitant generation. Sure, adoption of technology, in every form, was rapid, but they also were the first to grow up with the Internet. It was a given they would be comfortable amongst cyberspace. The real world? Not so much.

Until things improved. Like now. Credit is more available and companies are hiring. Growing incomes situated them in up-and-coming urban centers. Big cities, sure, but also the smaller metro areas (like our own award-winning Fort Lauderdale) are experiencing dramatic influxes of young professionals. “Yeah, but in the city, they don’t drive, and they rent condos, so nothing changed.” Except not.

Millenials have grown into the second largest car buying group, behind their parents, the Boomers. You were right, they want the technology, and cool for these people represents efficient and modern. Out of reach of most buyers, the Tesla Model S still stands as the pinnacle of “cool”. No wonder other carmakers are pushing their own plug-ins, electric, and other forward-looking models.

They’re also buying homes. Renting was a necessary evil, and also helpful for a rapidly-shifting work environment. Now, denizens of the Millenial generation are able to “settle down” just a bit, and that comes with buying property.

Credit card usage is down, that’s accurate, but debit cards are embraced wholly. I see this as a financial literacy issue more than anything, which credit unions are ideally suited to address. Also mentioned in a recent post was the activities of CU Student Choice, helping CUs become financiers of student loans.

So this Millenials group…where do credit unions fit? Fund student loans, help them get started with debit cards, for a start. Be there for their new car loans, then help through the first mortgage. By providing time-honored service, coupled with the offerings people today expect (mobile banking, remote check deposit, online loan application, and compatibility with the latest must-haves), any credit union would be setting themselves up for a generation of success!


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