Studies show that millennials, more so than past generations, lack brand loyalty.
In the past, brand loyalty was based on product and product alone. Today, media platforms have compelled companies to become more transparent to the public. As a result, consumers now make purchasing decisions not only based on the products and services being offered, but on the ethical values of the company or individual selling them. In addition, consumers have more options, and access to information about these options, than ever before.
According to a July 2016 Forbes article, Consumers are not inclined to beloyal to brands as they once were because the underlying value of loyalty itself is no longer particularly relevant. generational experiences have made sticking with tried and true’ a sucker bet.
New companies and better products come along every day. Millennials have access to countless options that claim to fit their needs as consumers. And in addition to the products themselves, today’s consumers have access to reviews, ratings, and testimonials about products that allow them to look before they leap.
Millennials, heavy users of the internet and social media, have proven more willing to make purchases based on recommendations or promotions from friends, connections, and other people they know.
Instagram accounts, Pinterest boards, Facebook pages, and other sources constantly promote new companies and products. Add pushes from social media influencers people who try, rate, and review products, then share their experiences with followers and millennials feel like they have all the information they need about a product or service, making them more likely to try it.
Santana Bozman, a 26-year-old public health and fitness figure, is more than willing to try new products, especially when someone she follows on social media has used the product.
I take advice from the people I follow on social media, she says. I obviously base it off if they’ve done their research, but most of them have. If it’s something I’m looking for and somebody says they’ve usedit, I’m going to give it a try. I’m not necessarily stuck on a brand, though. I’m willing to expand and try other things.
When consumers have a need, they look for a product to fulfill that need.
But millennials have proven willing to try other products even when they’ve found a product that works for them. And that’s a new hurdle for brand loyalty. It’s not that it’s dead. It’s that the way companies are earningit is changing.
Brand Loyalty Isn’t Dead
Just as headlines scream that studies show brand loyalty is dead, studies also show brand loyalty isn’t dead quite yet.
Look at The Elephant Pants.
The Elephant Pants donates a portion of every sale to help create a sustainable future where elephants thrive.
This company sells the most comfortable pants you’ve ever worn. The style is popular right now, and this brand is doing well.
Could we find similar clothing somewhere else for cheaper? Absolutely. But it’s not the pants themselves that has millennials trumpeting this brand. It’s the social benefit.
By partnering with outside organizations, this company promises to donate a portion of sales to an organization that works to end the exploitation of elephants. To date, the company has donated more than$145,000.
Sure, the pants are comfortable. But as a millennial, I am more drawn to the values The Elephant Pants espouses. That’s got my loyalty for now.
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Brand Loyalty And Credit Unions
At this stage in their lives, most millennials have opened an account at a financial institution. They might not be inherently loyal to that institution, but the inherent hassle of switching accounts or starting new ones makes shopping around less likely,especially if no extraneous factors or serious problems exist.
If the effort [my bank] puts in reaches what I need, then I’m staying, says Callahan analyst intern and 21-year-old George Washington University student Maya Neuman. I don’t see the point in starting a bunch of differentaccounts at different places.
But that doesn’t mean it doesn’t happen. In an April 2016 Kasasa survey 83% of millennials said they would switch financialinstitutions for better offerings. In a 2017 Access survey, 18% of millennials said they had switched financial institutions within the past 12 months.
So, basically, young adults say they are willing to change institutions, but most don’t.
It takes overwhelming and undeniable evidence that a credit union can offer more than the current provider to motivate complacent millennials to switch financial institution.
That’s how Megan Parlett, another Callahan intern and 21-year-old student at the University of Maryland, feels.
Most of my peers are likely to stay with the institution they’re already with, she says. It’s not necessarily because they are loyal to them. Most people just don’t know enough about financial institutions to say,I really like this bank because of their interest rates’ or whatever.
So the challenge, then, is how to make millennials pleased with their FI aware that credit unions provide the same services with better rates and fewer fees? That the credit union difference means being the owner of a cause and giving back to the community?That the social benefits of joining a credit union weigh as strongly as the financial.
And for those millennials actively looking for a new financial institution, the challenge is how to get the information that will make them switch in front of peers, social media, internet searches, etc.?
For both scenarios, a potential member’s impression of your institution is based off reputation and brand. If your credit union is not present or too difficult to find, you’ll be out of the running.
Engaging with younger consumers on multiple platforms allows them to get to know you and your cause and helps them feel fully informed about what you offer. Armed with this information, they’ll hopefully be more likely to join.
So, how do you engage?
Find ways to promote your brand. Use social media advocates. Attend local public events. Create a positive online reputation. Reiterate the fact you are member-owned and community-driven.
Positive reviews combined with a social media presence and the availability of online information will help your brand stand out to young consumers. They’ll recognize your credit union in a crowded field of competitors.
The platforms are there. Use them to your advantage.
