When it comes to marketing financial services products to Gen Y, it takes a deft hand and new tricks

If, as a boomer parent, you have the sneaking suspicion that your millennial—or “echo boomer”—children are an altogether different breed in their purchasing, consuming, and living habits, you’d be right, says Bill Carter, partner of Fuse Marketing. He adds that you should take that knowledge to your day job as a bank marketer trying to reach that segment.

Fuse specializes in reaching this youth segment, also referred to as Generation Y, the eldest of which are 29 and comprise nearly a third of the U.S. population, and represent a market of $170 billion annually. Based in Burlington, Vt., Fuse has been responsible for—or contributed to—branding and marketing campaigns adopted by New Balance, Motorola, Eastern Mountain Sports, NBC, and a coterie of others. Financial services firms, though not listed on the firm’s convivial, color-splashed website, have also been clients.

“Loud and uninteresting is bad,” Carter says, in his take on Fortune 500 youth-segment ads that have barraged television and radio since the mid ’80s. You’ll still see—and hear—these old school “shout it out loud” ads, but in Carter’s view: “Quiet, thoughtful, and singular is what’s working for Echo Boomers now. You have to find a way to show what you’re selling with a clarity and authenticity and not faux cool,” the marketer adds.

Other marketing experts, including Joseph Pine II and James H. Gilmore, who have a new book out on marketing, titled Authenticity, believe that being “real” is valued by many segments in society at a time when we all feel either annoyed, lied to, or handled by the managed message.

This quest for the actual versus the manufactured means that today’s kids take their cues almost exclusively from friends and celebrities they admire. Sure, ads have to influence somebody to get this process started, but predicting what brands will actually resonate is trickier than ever.

Posing an example, Carter contrasts the campaigns of recent years to sell Detroit-made vehicles with the overall approach used by Volkswagen for the reintroduction of the Beetle. With its Gerber Daisy and candy colors—which was fresh and broke through the wall of media noise—VW made a statement. Carter points to VW’s current campaign and website copy promoting the carbon offsetting concept as a great instance of relating a brand to something important and newsworthy, managing to laser-focus attention on both a cause and a product.

Meanwhile, the content communicates to the very young.

Gen Y’s splice of life
So tweens, teens, and 20-somethings are into themselves, above all, as has always been the case. Yet this youth generation has enacted its relative self-absorption in striking ways. Meanwhile, elders are likewise responding differently. After all, the broadcast news and other outlets have bent over backwards to both “hipster up” and dumb down their content to make it more palatable for those younger than Gen X.

Unless you’ve been so busy at the office that you hardly noticed, kids of today are TiVo-savvy, even more than consumers who preceded them. “It’s not like when you and I were kids,” Carter, a Gen X-age exec, jokes. Today, he points out, Echo Boomer kids “download only the two songs on a Justin Timberlake, White Stripes, or Killers record that they like.” This selective consumption shapes their appetite for consumption of all services.

In fact, Yankelovich, Norwalk, Conn., is applying a scientific term—splicing,— in a marketing context to describe a cut-and-paste youth that will hound mass market firms for consistency of message and better offers by this snippet approach, notes Los Angeles-based partner Pete Rose. “It’s all about taking what you want and only what you want,” he explains. “The concept is related to mash-ups. Youth will increasingly demand the best parts of all retail offers,” he explains. “They will look at what is offered via all channels and call the provider out on any inconsistencies more ruthlessly.”

Dead channel?
So, should banks gird themselves for a demanding, consume-only-what’s-fun-or-most-advantageous public? Carter thinks so. For starters, banks don’t inspire much loyalty. On a brand continuum, financial services sit closer to brands despised (e.g., big tobacco and oil) or neutral (e.g., shampoo), he says, if they truly register at all. Compared to Apple, Dell, or Virgin, they barely make a dent. “Mostly, these are the companies that mom and dad deal with that have nothing to do with [the kids],” says Carter.

In trying to bridge this chasm of indifference, he’s seen financial institution clients employ traditional schemes in new wrapping, sticking to the direct marketing channel like glue, for instance, because of tradition and habit.

“The old-style direct marketing channel is dead, it’s totally irrelevant now,” Carter says. Banks will have to do more with their websites, follow developments in mobile banking and payments, and think about messaging very carefully, treading with a deft hand to instigate dialog.

Rose isn’t sure any channel or approach is dead, but he agrees that banks have their work cut out for them in terms of generating offers and messages that are compelling in a marketplace awhirl in distracting elements.

“Although there are pockets where this isn’t the case,” says Rose, “the census data we’ve recently reviewed confirmed that Echo Boomers aren’t getting married as young and aren’t buying 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 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 entre-preneurs. “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 non-spendthrift 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. And previous generations had what today’s kids have in terms of irreverence, defiance, and self-conscious individuality. But the Silent Generation (now 70-85), Boomers, and Generation X (the oldest of which are 42) still had, via mass media and unified messages, a set of societal and purchasing expectations more responsive to standard product and service positioning.

Different dynamics were also in play. Silents were obedient by nature. Boomers were so numerous that they made and broke their own rules. They also benefited from a forgiving economic climate that let those so inclined “drop out” and get back in without too much problem. (Many of them, as satirized by Joe Queenan in Balsamic Vinegar and other books, were utterly insufferable in this, simultaneously bragging about Woodstock, their extensive stock portfolios, multiple homes, and experience-economy vacations.)

Gen X, often called the whiny, bitter generation of “slacker” fame, had it tougher in many ways, a relative lack of economic opportunity being only one. But as a result, we (oops, they) figured out when painfully young to fit in or get marginalized.

In the zap-friendly, jump-cut world of the Echo Boomers, one ambient message is that all “old people” will deliver retail, life, and work experiences on youth terms. Whether or not this expectation squares with global wage competition and downward pressure on real wages is another matter. (And the characteristic of selective focus applies to even the most selfless; even U.S. soldiers in Iraq rigorously filter.) “The internet, text messaging, peer-to-peer computing, YouTube and related technologies, has made this a uniquely hard-to-reach generation,” Carter notes.

This tendency has pluses, including an inventive, generative side, making it easy for content to get remade and amplified. Flight of the Conchords, for instance, the recent HBO hit about “the tribulations of a digi-folk duo” has created a boisterous alt universe on YouTube, where “mocumentary” concerts were taped by fans and posted.

Financial services, is, as a category, forced to be more serious, but many of the rules of creating a marketing dialog with the youth segment are the same. “Touch on the concerns in a clear direct way,” Carter says. “Kids are afraid of ‘bad credit cards,’ because that’s the only message they hear. Can banks find a way to get a different message out without it looking artificial? That’s the challenge.” BJ

 

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