Attract Gen Y with Targeted Products and Year-Round Marketing

Card Services for Credit Unions
April 15, 2010 | COMMENTS

About five years ago Pacific Service Credit Union, Walnut Creek, California, increased its focus on Gen Y, and has since seen its youth membership grow steadily.

“We began by looking at our product suite,” says Kristin Dove, vice president of marketing.

“We knew we couldn't attract Gen Y without products that would appeal to them.”

The $1-billion-asset credit union introduced its FirstStep Checking account, specifically designed for members age 23 and under.

“We reimburse ATM fees if members use a machine that assesses a surcharge, up to $3 per transaction and $12 a month, and there's no minimum balance or monthly fee,” Dove explains. “We also launched our starter Visa credit card with limits up to $500. Members don't need established credit but they can't have derogatory credit. We also reduced the minimum investment for certificates from $1,000 to $100 for members age 23 or under. Then we figured we had something to sell.”

Pacific Service created a youth brand, “Life 101,” and has marketed very aggressively to young people. “We use our website and direct mail, and word of mouth is also important with this generation,” Dove notes.

“We also use social media, including Twitter, Facebook, and MySpace,” she adds. “We have someone who works it every day. Sometimes the messages are promotional, such as an e-statement campaign talking about saving trees, where users could get free recyclable shopping bags. We also watch a lot of news sources, and if we see a favorable article about credit unions, we tweet about it. If you make it too promotional you become just another sales pitch.”

On Facebook, the credit union accepts all postings, positive or negative. “We address any negative information,” says Dove. This personalizes the credit union and demonstrates its commitment to service.

In general, Pacific Service uses very detailed return-on-investment (ROI) metrics to measure the success of its programs, which can be a little tricky with youth products. Balances are typically low and don't generate positive returns at first. Credit union management knows, though, that youth members are future borrowers and typically stay with their first financial institution if their loyalty is captured early on.

“FirstStep Checking is our most successful youth product; we introduced it about three years ago and have about 1,500 accounts, which is very good for us,” Dove reports. “But there's no one single effort that's produced a big bang. It's the whole approach that's working for us—the product redesign, the marketing mix, and the consistency of our marketing throughout the year and over several years. It's a slow process and takes time and dedication.”

Reprinted from the March 2010 newsletter of Card Services for Credit Unions.