Take Millennials' Stated Banking Preferences with Grain of Salt

Just as helicopter-style parenting that hovers over children doesn't work, neither does helicopter-style marketing.

A helicopter parent will monitor his or her child's temperature hourly. The banking industry seems similarly obsessed with taking millennials' attitudinal temperature.

Bank marketing teams receive an endless series of survey responses in our inboxes regularly from millennials that capture their every whim. These younger customers tend to make irreverent comments about the "stuffy old bank" used by older customers.

Can we just get over this? Rejecting the choices made by their parents is what younger consumers do; it's a rite of passage. The mistake for marketers is making too big a deal out of those comments. Just like a smart, composed parent would do, marketers should bite their tongues, nod knowingly and move on.

A guiding principle should be not to take these comments too seriously. That doesn't mean ignoring or dismissing them. It means recognizing that opinions change, seemingly rock-solid beliefs may melt into air, and that answers — while sincere — may be conditional on other factors.

For these reasons, I'm an advocate of not taking millennial research too seriously. Sentiments do change, and the answers from survey participants in the millennial and other generations aren't always dependable. Sometimes they are plain inconsistent.

Here's an example. We're told that email is millennials' preferred means of communication. Seventy percent of millennials check their email from bed; a similar number actually sleep with their smartphone. But that doesn't mean they like email. More than 60% of survey respondents say they receive too many promotional messages, and 39% want the number reduced. As a result, overwhelmed millennials repeatedly hit the delete button without reading many of their messages.

That's why the open rate of bank emails is so low at only 16%, meaning recipients don't even see a bank's emailed offer 84% of the time. And the click-through rate is a paltry 1.6%.

Furthermore, if your email communications are judged as not relevant, millennials will quickly label them as spam, seriously hurting your sender reputation and your ability to email them in the future.

On the other hand, revisiting that "old-fashioned" marketing channel — direct mail — may be your best way to reach them. Thirty-six percent of respondents 30 and under look forward to checking their mailbox daily, according to a Gallup survey. This includes 30% who feel very positive about receiving paper mail, higher than any other age group.

According to the USPS' 2014 Household Diary Study, 41% of those ages 22 to 24, and 37% of those ages 25 to 34, immediately read mail sent to their house. Ninety-five percent of those ages 18 to 29 say they feel positively about receiving a personal letter. The reduction in mail volume triggered by the shift to digital probably explains why checking the mailbox is a warmly anticipated event.

Those moments between the mailbox and the front door — when the recipient is touching, turning and scanning the piece — are excellent opportunities for grabbing their attention. At this time, mail is read 100% of the time, especially if it's a postcard, giving it a definite advantage over email offers. Email may be their favorite channel, but direct mail could be the best channel for marketers.

Other research studies suggest the chasm between millennials' stated preferences and behaviors is wide and often contradictory:

• Millennials love mobile banking but dislike being treated like a number.

• More than half prefer community banks but two-thirds open accounts at the nation's largest institutions.

• High bank fees are the primary reason millennials switch institutions, but they choose banks which charge the highest fees in the nation.

• Over 80% of millennials are confident in their ability to manage their finances yet 41% report being "chronically stressed" about money management, according to a report from Bank of America and USA TODAY.

• While ostensibly valuing personal service, they are the most eager of any age group to switch to a Pay Pal, Amazon, Apple or any virtual bank, when the opportunity arises.

• Millennials save a bigger portion of their paychecks than any other age group, according to a survey from Bankrate.com. However, in the past five years, 42% have used payday loans, pawnshops, auto title loans, tax refund advances and rent-to-own products.

Millennials are not one large monolithic block of consumers; we don't expect their answers to be uniform. However, the wide inconsistency between answers and actions should evoke enough skepticism to encourage marketers to avoid building programs around their stated preferences.
Perhaps marketers should think like old-fashioned parents, taking what millennials say with a grain of salt. Swooping in to meet their every whim is a practice best left to overprotective parents.

Kevin Tynan is senior vice president of marketing at Liberty Bank in Chicago. He can be reached at ktynan@libertybank.com.