Want to Attract and Engage Today’s Millennial Consumer? Get Personal.

TransUnion
Article10/18/2017

Paramount to a business’ success in our digital age is anticipating and satisfying evolving customer demands. And leading the charge in those demands is the all-important Millennial demographic—a truly different breed of consumer. From preferences of what they buy to how they buy it, this group is setting new standards in how business is conducted.

Across industries, providing the kind of experience Millennials expect is proving to be a challenge. So what’s the key to developing a flexible, strategic and effective approach? Personalization. These digital natives desire a brand experience tailored specifically to them. In fact, just within the financial services arena, 67% of Millennials and parents of children under 18 are willing to see a personalized ad from their bank that helps them meet a financial goal.¹ Yet, simply trying to sell a customer additional products—especially if they don’t correspond to their particular financial journey—isn’t enough. Financial institutions must anticipate needs, and use personalized messages to become innovative sources of empowerment and trust – during all life stages.

Marketing innovation is a must for Millennial credit participation

When it comes to credit cards, Millennials have significantly different preferences and behaviors. They simply don’t use credit as much as previous generations. They carry fewer cards in their wallet, use them less frequently and carry lower balances. Generally, they tend to prefer debit cards and other forms of payments. So, more than any other line of credit, card marketers must approach Millennials with new strategies for acquiring and engaging them early to build loyalty and capture wallet share.

How do you accomplish this? Offer innovative lifestyle products and financial management made to order. Card marketers need to cater to Millennials’ unique requirements and payment preferences by:

  • Creating relevant products that support their lifestyle and financial needs
  • Prioritizing ease of access for card application process
  • Offering credit education and financial management tools

Beyond what you’re offering, how you’re offering it weighs heavily. You need to deliver a flawless digital customer experience that:

  • Communicates offers via familiar, digital channels for increased visibility
  • Leverages alternative data for targeting and underwriting thin-file, younger consumers
  • Develops acquisition offers that deliver convenient redemption

As Millennials continue their journeys—get jobs, get married, start families, etc.—their credit needs are evolving quickly. To ensure you’re positioned to provide what’s in their best interest, it’s prudent to perform routine portfolio reviews to assess growing needs, product preferences and what life events are on the horizon—then speak directly and personally to those points.

Millennials and automobiles… an interesting yet ripe combination

Millennials are known as among the worst drivers on the road, making this young generation of drivers risky to insure. But because Millennials are purchasing more cars than Gen Xers at every age, this large and growing Millennial auto insurance market is yearning to be served. Yet, due to the foundational differences of Millennials, insurers must take a different approach to acquiring and profitably writing policies to this significant genre.

Consider that Millennials drive the most miles of any generation with an average 13,725 miles annually. However, they’re also driving cars in worse shape and therefore don’t carry liability insurance for their vehicles, making them even more risky to insure. Top that with the fact that Millennials shop for auto insurance frequently and are less loyal to their existing carrier. In fact, over the past five years, they’ve obtained 2.25 quotes for auto insurance per year, outpacing every other generation. In addition, their 12-month retention rate is 7 points lower than Gen X and 16 points lower than Baby Boomers.

So, how do you lucratively seek and acquire Millennial drivers? Again, innovative methods are necessary. Millennials dictate that insurers connect with them how, where and when they want. To enjoy success, carriers will need to:

  • Have a compelling website both desktop and mobile
  • Provide tools to help educate consumers about the hazards of distracted driving and impact on insurance rates
  • Provide online product, pricing and comparison tools
  • Provide a simple application quote request process

The Millennial healthcare dilemma: Can’t pay or won’t pay?

Many Millennials consider healthcare an expense they just don’t need right now. And they’re willing to pay the penalty of not having insurance over high monthly premiums. However, those that do have insurance tend to pay medical bills at a slower rate than other generations. In fact, in 2016, 74% of Millennials did not pay their medical bills in full, compared to 68% for Gen X and 60% for Baby Boomers.³

This may be due to already stretched budgets and the prioritization of other bills, such as housing and transportation above medical. Another potential factor could be lack of access to financing options for medical bills. Considering Millennials are less likely to carry a credit card, they don’t have as much revolving credit to rely on. Finally, hospitals still haven’t fully progressed to meet Millennials’ expectations of having patient-friendly, technology-enabled billing and payment options.

So, if healthcare providers want to engage Millennials with greater frequency and success, they should consider:

  • Getting payments at time of service – Millennials like to pay for products and services when they receive them, and if they can do that via mobile device, even better
  • Making financing smooth and easy – Millennials gravitate toward personal loans and could use them as a means of payment
  • Providing a digital experience – Millennials appreciate establishing relationships and getting information on services and payment options online

In many instances, it’s their way or the highway

No industry is exempt from appeasing Millennials and their way of doing things. In most every business, to market successfully to this group, you need to give them exactly what they want, right when they want it – or they’ll simply move on. While innovative technology seems to be the prime catalyst for initial engagement, you need to couple it with communications and offers that speak directly to them, their needs and circumstances. Getting personal with them is the best way to build trust and loyalty, and hopefully a broader customer base of this most intriguing, powerful and valuable group of consumers.

Read our report Generation Revealed: Decoding Millennial Financial Health to learn more.

Read our report  Generation Revealed: Decoding Millennial Financial Health to learn more.

¹ How to Win Customers: Show 'Em You Know 'Em: September 19, 2016
² Accenture 2016 North America Consumer Digital Banking Survey
³ TransUnion Healthcare payments data