Thursday, September 16, 2021 | Jenny Armistead
For over a decade, many financial institutions have struggled with attracting and engaging younger consumers. As older millennials (those born in the 1980s) are now heading into their 40s and the transfer of wealth is starting to take place, it is becoming critical for the future growth and sustainability of financial institutions to explore creative ways to engage this lucrative group.
Understanding millennial and Gen Z segments and figuring out how to attract and engage them has been a hot topic for businesses and society in general over the past 10 years. Many financial institutions were proactive and engaged the younger consumers through their parents – getting them early. But did this strategy prove successful in keeping them?
Raddon research shows that 70 percent of millennial and Gen Z consumers claim a large bank as their primary financial institution (PFI). Bank of America is responsible for 73 percent of the movement toward bigger banks.
Millennials and Gen Z expect a more personalized experience based on their unique financial goals and life stage. Nothing turns them off more than being communicated to and targeted with products and services more suited for baby boomers. Building trust and engaging this group starts with truly understanding their individual needs, interests and behaviors and customizing your marketing to focus on making their lives easier.
A great example of this is Bank of America’s Better Money Habits Series. Through answering a series of questions, customers get educational content specifically tailored to them – from budgeting to investing to teaching kids about money or how to borrow responsibly. Providing a personalized experience through relevant content builds trust that leads to engagement – especially with younger consumers.
Another strategy for building trust through relatable and relevant content for millennials and Gen Z is through influencer marketing. Influencer marketing is a growing industry as more companies have experienced its power for engaging younger consumers.
The premise behind influencer marketing is not new. It’s based on age-old word-of-mouth and endorsement advertising strategies that have been around for decades. What makes influencer marketing different is that it uses content creators – people who are “just like you” but happen to have a huge following on social media that fuels the spread of word-of-mouth influence.
What makes influencer marketing so successful is the degree to which the audience (typically younger consumers) view the content creators as credible and relatable. For example, “Christy Creator” is just like me, so I value her opinion on these kinds of products and brands. In some cases, consumers feel that influencers are more credible than the brands themselves. Not only do content creators have power in terms of their ability to influence but also their ability to attract brands that want to leverage their large social media following to reach and engage younger consumers.
Microinfluencers are a specific type of content creator that organizations can hire at a lower cost due to their more modest following – thousands or tens of thousands of people within their niche. Microinfluencers prove to be more effective for businesses looking to develop relationships with their target audience, resulting in higher engagement rates compared to large celebrity or social influencers with millions of followers. Because financial services is such a niche topic, microinfluencers who create content around financial well-being would be a perfect option for a financial institution to include in its digital marketing strategy to attract and engage millennials and Gen Z.
Now that you know what influencer marketing is, you might be asking yourself how it works or what an influencer marketing campaign looks like. And most importantly, how do you know if it’s working? Here is a great example of how Bank of America leveraged the social power and reach of some microinfluencers to build awareness for its Better Money Habits campaign.
In September 2019, Bank of America, in partnership with Buzzfeed, hosted a Better Money Habits Retreat in Miami for 50 young adults to share their experiences and learn how to improve their financial habits. Beyond the partnership with BuzzFeed – one of the largest news/media outlets that reaches hundreds of millions of young people globally – the bank was also strategic in terms of attendees and presenters. For example, the Instagram #Ads featured above are from two microinfluencers who presented at the retreat and shared that experience with their (tens of thousands to hundreds of thousands) followers.
The financial wellness retreat was a true win for all parties involved. Bank of America was able to create a fun and unique financial literacy experience that would allow it to share its financial education platform and content with an influential and socially powerful group of participants. These microinfluencers have built trust and credibility with their young adult followers and, through promoting Bank of America’s Instagram ads, allowed the bank to engage millennials and Gen Z consumers with their content.
Financial institutions that win at building trust and engaging millennials and Gen Z consumers will better position themselves for future growth and profitability. The influencer marketing industry is projected to be worth more than $15 billion by 2022 and has already had a significant impact on advertising strategies, taking more share of the marketing budgets due to its proven ability to build trust and ultimately influence purchasing decisions of younger consumers. Now is the time for financial institutions to develop an influencer marketing strategy to see how, over time, it will lead to driving higher engagement with those younger consumers who are so vital to their future success.