ABA Banking Journal - November 2007 - (Page 50)

BANK MARKETING property as young, either. On the whole, they are also waiting to have children.” Rose mentions these activities, of course, as being traditional anchors to a strong banking relationship. As habits and timing of life-stage events change, banks will have to rethink their products and message to find stickiness in new ways—perhaps doing more with educational loans or offering other debt management products for a youth that has a longer flowering period. “Echo boomers are an interesting combination of incredible savvy and incredible naïveté,” Rose says. “They can do so much with computers, and standouts among them have taken quirky ideas (e.g., “Facebook”), or singular talent (e.g., “American Idol”) and become instantly, brilliantly rich,” he admits. And yet, as a generation, Rose notes, many may not have much historical perspective, or understand how say, government or economic systems work (outside continued from page 48 of those who learn details as part of a specific academic path), or get the fact that success for most people isn’t instant. “Surprisingly few have a sophisticated understanding of the limitations of standard approaches to privacy,” Rose says of the Net. As with Generation X, Rose says today’s youth dream of being entrepreneurs. “And, by the way, 54% of them expect to be wildly rich in their lifetime,” says Rose. “So, there’s an interesting dynamic there.” Perhaps, too, this gap poses an opportunity for banks. Individual consumption One banker recently told a luncheon anecdote that illustrated today’s reality clearly. His son, 27, soon to be wed, had some very elaborate honeymoon plans in mind and expected his father (“who’s doing well”) to foot the bill. The son didn’t have a job with a career path associated with it—that is, the banker knew his son would likely need more of a focus and more school in order to have a comfortable future. And Dad was concerned. He found himself wondering if his son had somehow gotten an expectation of entitlement despite his own nonspendthrift habits. That day at lunch, the banker also talked about what he was at the conference to do, which was learn more about marketing technology such as CRM systems and other marketing automation tools. So, interestingly, the banker with private issues about a Gen Y son had day- job issues with technology that would, in part, help to beef up the marketing efforts of the firm. But we’ve had teens before… Part of you is certainly in touch with these trends and may accept this. And yet you may be scratching your head because there’s been a youth culture in the modern sense for at least 60 years. GETTING REAL to find big business, agrees Janet Barkwell, RBC’s vice-president of client strategy. One tends to think of Facebook as a means for teens to broadcast to all their acquaintances that they have just varnished their nails, but Barkwell says being there accomplishes two things for RBC. First, it’s where Gen Y is, and the overwhelming feedback from RBC research last year was “they said you have to be where we are, which is online.” Second, Facebook provides a mechanism for youngsters to circulate Royal Bank information to their group. Social networking is the key distinction between Gen Y and other generations, including the relatively techie Gen X, says Barkwell. HSBC also took “a full dive into social networks” this term, says Karen Horvat, vice-president of retail marketing. “Very heavily targeted ads with services like Facebook” allow the bank to know what college a user is in and send them a message to the effect, for example, “we’ll be on your campus between 9 a.m. and noon tomorrow,” she explains. Being physically on campus at the start of the college year (since students are the most coveted potential lifetime customers) is still very much done. It would be “very difficult to do that grassroots thing nationally,” Horvat says. For that reason, she sees pros and cons to being a big bank. On the one hand, HSBC is global and so a no-brainer for a student studying in London for a year. On the other, in the U.S. it’s “highly concentrated within New York [state]” which allows for outreach. This fall, HSBC ran a student competition offering those who signed up for online banking an iPod, plus The Ultimate Music Package. “Students loved that line,” said Horvat. HSBC’s green marketing campaign is also music to this sector’s ears. The bank was careful that students, more inclined than average to “game the system” not just take the iPod and run. Conditions of the account resulted in fewer accounts of higher quality (much bigger balances) than in previous years, she said. HSBC addressed what Bargerhuff identified as a danger of gimmicky giveaways: training Gen Y to be even greater rate shoppers. HSBC also has a blog, www.yourpointofview.com, and these forums essentially offer banks focus groups without the marketing expense, Horvat and others said. “These people aren’t shy about giving their opinion, Gen Y is very vocal.” ING Direct has more than its share of Gen Y—124 compared with a national baseline of 100, per U.S. census 2000 data. More than 30% of its customers are under 30 but John Owens, director of marketing, says, “We don’t target by age.” Substantial online advertising and a referral program “drive a significant amount of business from Gen Y,” which is, he says, “inherently more wired.” Royal Bank’s tagline on its new blogger forum www.rbcp2p.com echoes the gist of ING’s in-your-face marketing campaign of the ‘90s. Really, RBC’s message is ageold: “not your parents’ banking site.” 50 NOVEMBER 2007/ABA BANKING JOURNAL www.ababj.com/subscribe.html http://www.yourpointofview.com http://www.hsbcusa.com http://www.ingdirect.com http://www.rbcp2p.com http://www.ababj.com/subscribe.html

Table of Contents Feed for the Digital Edition of ABA Banking Journal - November 2007

ABA Banking Journal - November 2007 Contents Editor’s Column Briefing: Good News for Mortgages Sleight of Mind N.Y. Hiring Bonanza May Be Bane Snapshot: A Look at Held-For-Investment Loan Growth ABA Resources ABA Chairman’s Position “The Moose Bank” Thrives on Manufactured Housing Loans Finding the Middle Way for Your Bank’s Retirement Program Pass the Aspirin Cover Story: Self-Service Steps Up DIY U.K. Style Marketing to Millennials Getting Real With “Gen Wired” Ethnic Marketing: Disinterested Banking Getting Good at Global Sourcing Case in Point Turn Compliance on It's Head Banker’s Mart To Advertise/Index of Advertisers The Economy

ABA Banking Journal - November 2007

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