Microinfluencers: What Are They and How Can Financial Institutions Use Them to Engage Millennials and Gen Z?
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.
Credit Unions and Community Banks Are Losing Millennial and Gen Z Consumers to Bigger Banks
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.
Influencer Marketing Builds Trust
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.
What Are Microinfluencers?
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.
How Do They Engage Younger Consumers?
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.
Bank of America’s Better Money Habits Retreat
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.
How to Deploy a Microinfluencer Marketing Strategy for Your Financial Institution
- Determine your goals – When developing your influencer marketing strategy, start with establishing your goals and making sure they are aligned with your financial institution’s overall strategic goals. Are you looking to increase brand awareness or achieve higher engagement, or are you more focused on driving sales conversions? Each type of goal will determine a different strategy and method for assessing performance
- Understand your target – Knowing who you are targeting through your influencer marketing strategy is key. Gather as much information as possible on this segment. Go beyond demographics by understanding their behaviors, communication and content preferences, social media preferences, as well as interests and values. Having a clear picture of your target will help you to determine your channel and content strategy
- Identify the most effective channels and formats – Based on the knowledge you have about who you are targeting, you can determine which social media channels will be most effective and offer the greatest opportunity to reach and/or engage that audience. According to a 2019 mediakix Influencer Marketing Survey, the top three most strategic social media channels for influencer marketing are Instagram (89 percent), YouTube (70 percent) and Facebook (45 percent)
- Establish your budget – A big myth regarding influencer marketing is that it is outrageously expensive. On the contrary, even smaller marketing budgets can support this kind of strategy if they focus on using microinfluencers, not celebrities or those with millions of followers. According to a recent HubSpot article, “What Will Influencer Marketing Look Like in 2021?," on average a microinfluencer will charge from $80 to $500 per piece of content depending on the number of followers, the channel and the kind of promotion you want to run
- Research and select the right microinfluencer – Selecting the right microinfluencer is the most important step in developing your strategy. Begin researching keywords and hashtags on Google and social media to find influencers within the financial services space. Other resources to find and research potential influencers include BuzzStream and BuzzSumo, or get referrals through your professional network either on LinkedIn or local associations. Just make sure they are a good fit for your brand and have had success in engaging your target with previous campaigns. Think of them as a brand ambassador for you – do they represent your image and values?
- Manage the content – Now it is time for your marketing team to work directly with the microinfluencer on developing the content strategy. Share with them your brand guidelines and what style and tone you want them to represent. Be open to their suggestions based on their past results in engaging their followers. Also, be sure to discuss expectations for how they should respond to comments and questions
- Track performance and optimize – This is where many organizations fall short in influencer marketing. They either don’t track campaign performance or have trouble calculating their ROI. As with other digital marketing strategies, influencer marketing campaigns can be easily tracked in real time. Every social media channel provides insights for how ads are performing in terms of engagement and reach. Make sure your influencer is sharing these metrics on a consistent basis. Don’t wait until the end of the campaign to adjust. If the ad is getting less than stellar results, reach out to the influencer and discuss options for optimizing or adjusting the content or budget to boost performance
Influencer Marketing Is an Effective Investment
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.