The PSFK Report: Are Banks Missing The Millennial Boat?
This article was posted by PSFK, a global trend reporting and customer-experience company. See the original here: https://www.psfk.com/2019/05/op-ed-millennials-banks.html
Op-Ed: Are Brick-and-Mortar Banks Missing The Millennial Boat?
Advertising mastermind and creator of the Valuegraphics Database, David Allison tells PSFK what's missing from the commercial banking experience
Imagine this: As you’re depositing your latest paycheck at the bank, there are no lines, everyoneis friendly and knows your name as well as your dog’s name, and the in-house barista is preparing your favorite almond milk latte with vanilla. Sounds nice right? That is what Capital One Bank has recently started advertising as it becomes yet another major bank who is seeing problems with its brick-and-mortar locations.
With the rise in popularity of online banking, brick-and-mortar bank locations have begun to struggle. And, like so many industries, the banks believe the millennials are somehow to blame. “Millennials don’t like banks, but millennials like coffee shops, right? Let’s be that!”
New data indicates the banks are not missing the millennial boat, but that, in fact, there is no millennial boat in the first place.
According to 75,000 surveys—the largest social-science survey ever conducted of what people value, want, need and respect—banks should stop worrying about age groups and instead focus on what people truly value in a banking environment. Why? Because sociologists know that what we value determines what we do. In fact, it’s quite simple: Those 75,000 surveys reveal two distinct customer segments: the Wanters and the Needers, and they show up in all age segments.
The Wanters and the Needers share one overarching similarity: They are motivated by a desire for personal attention. According to those 75,000 surveys, it is the kind of personal attention they are looking for, and why they want it, that makes them different.
Some of the Wanters go to a bank because it’s a social outing, and others feel it is a more secure way to do their banking. But what’s key to influencing them to come to a bank location is what they value. Everyone in this profile highly values family, personal relationships, security, community and happiness.
As an example of how this value-thinking works, let’s focus on the first value in the Wanters profile: family.
How can you make visiting your bank branch into a family outing? Can you offer Saturday afternoon financial literacy classes for kids and involve crayons and cookies? Can you offer to link all the accounts for a family who banks with your institution so that everyone gets a savings account birthday bonus percentage point when it’s Aunt Edra’s ninetieth birthday? Is there a reward for multigenerational family loyalty?
Any of these ideas will motivate the Wanters more than a coffee shop experience and will work for millennials, baby boomers, or any other age-based segment.
The second group, the Needers, are absolutely convinced that they need to visit a bank branch in person, but they aren’t entirely sure about the reason why. Not that it really matters why, because they think it’s necessary, and that’s what matters.
Like the Wanters, their values profile includes family, personal relationships and financial security. But instead of community and happiness which ranked high for the Wanters, the Needers are motivated by material possessions and ambition.
Needers visit the bank because it makes them feel successful and reminds them how ambitious they are. They want their ambition to be recognized, and a familiar way for banks to accomplish this is with status signals. Old-fashioned traditional banks featured polished marble floors, pillars that rose up three floors to the lobby ceiling, and hushed conversational tones that signaled confidentiality, all things that align with the values of Needers far more than espresso and a biscotti at the cafe will ever do.
What does this data mean for the banks?
There are two strategic roads for a bank to consider going down. The first road would focus on what both the Wanters and Needers share in common: A desire for personal attention. Offer the most sophisticated personal attention possible. Hire a customer service consultant from the Luxury Hotel industry. Study how other industries are doing it right. Make everyone who comes through the doors of the bank feel recognized, and part of the family.
The second strategic road would be to own one of the two segments at the expense of the other. Go deep and be unique. Pick one of the two groups: the Wanters or the Needers and leverage their values.
For the Wanters, look for ways to build a sense of community and happiness. For the Needers, leverage their ambition and love of material possession by surrounding them with symbols, interiors, and a user-experience that makes them feel very important, successful and elite. Bring back the red carpets, marble and hushed tones that banks used to be famous for, or a modern-equivalent thereof.
Most important for the banks to understand is that targeting an age-cohort to improve bank branch footfall is not the answer. Neither values-based profile, at any age, really cares if they have a half-caffe double-whipped latte when they do their banking. It’s all about personal attention, and either happy community vibes or ambition and success vibes. People don’t want to be in a coffee shop. They want to be in a bank; they just want the bank to reinforce their values.