Engaging millenials for financial services

Webinar Topic: How to Engage

Millennials for Financial Services

Date: June 28, 2012

Hosted by:

The Business Development Institute and Empathica

© 2012 All Rights Reserved - Confidential

Speakers

2

UNDERSTANDING MILLENNIALS TO INCREASE

THE CUSTOMER BASE, SALES AND REVENUEBY DR. NATALIE L. PETOUHOFF

FINANCIAL SERVICES:

MILLENNIALS: WHO THEY ARE AS A TARGET MARKET

MILLENNIALS: HOW THEY…

• Connect to brands

• Shape their opinions about products & companies

• Use technology to build their networks & share

information

• Make purchasing decisions

• Are influenced and influence others

JUST THE FACTS

Sources: *CIA World Factbook **Javelin Strategy & Research Study ***IRI study

• Millennials are the largest, most diverse, educated &influential shoppers on the planet

• Positioned to be the wealthiest generation to date

• >1.7 billion people on earth are 15 -30 yrs of age*

• By 2015 in the US, annual spending >2.45Trillion/yr**

• By 2018 in US, projected income will be $3.4 Trillion/yr –Surpassing Baby Boomer income**

• Millennial women represent a $54B marketing opportunity, surpassing baby-boomers in consumer package goods spending***

• Have influence over their Baby Boomer parents choices & will inherent that money

• From adolescence to adulthood

• From high school to college or workforce

• From single to married to parents or just single

• The avg age of a new mom is 25

MILLENNIALS:

RANGE OF LIFE STAGES & MILESTONES

MILLENNIALS:

LIVED THROUGH MANY LIFE-DEFINING EVENTS

• 2004 Southeast Asian Tsunami

• Hurricane Katrina

• 2008 Sichuan (China) Earthquake

• 9/11

• The Great Recession- Banks,

Insurance And Real Estate

• The Facebook Revolution

I’ve seen

a lot

in my

short life

BRANDS:

A FORM OF SELF-EXPRESSION

• Strong sense of brand awareness

• More the brand fits into their lifestyle, the more inclined to personally identify with brand

• 86% share their brand preferences online with their social networks

• Strong sense of brand loyalty

• When they find a brand they like, 70% keep coming back

• After a bad experience? Extremely difficult to win them back

*Edelman The 8095 Exchange Study

EXPRESSING SUPPORT FOR A BRAND IS A

PERSONAL STATEMENT

The Brand’s

• Authenticity

• Integrity

• Ability to deliver

What matters most to Millennials?

QUESTION: What’s being said about your company online?

• It’s deeper than for other demographics, because the

online expression of support for a brand is a permanent,

personal reflection of Millennials’ values

• It comes down to trust

• Access to online information increases/decrease that trust

• Prefer to do their own research online vs. read/believe a

brochure from a company

• THIS IS WHY SOCIAL MEDIA MATTERS TO BUSINESS

MILLENNIALS:

HOW THEY SHAPE THEIR OPINIONS ABOUT

PRODUCTS & COMPANIES

• A company’s reputation can

matter as much as the

performance of its products*

• 34% bought from a brand

because of the social or

political values of the company

• 90% tell their family & friends

NOT to purchase the

company’s products when they

lose trust or respect for a brand

*Source: Pew Research survey

MILLENNIALS:

WHY THEY PURCHASE

• 55% said price was most important reason

• But price is the least important in building their trust*

• 30% cared more about product quality

• 20% cared more about the range of products offered

Source: *Pew Research Survey **Deloitte Banking Study

• 33% looked for brands who made a positive

impact on the world

• Civically minded, propensity to combine

belief with action

• 80% donate time to non-profit causes;

believe companies should implement

employee volunteer programs

• Look for brand’s social & environmental

commitment when deciding where to shop

& recommend its offerings

• More likely to switch banks based on their

charitable investments**

MILLENNIALS: WHO THEY TRUST FOR BRAND

AND PRODUCT RECOMMENDATIONS

• Information is a Key To What Influences Millennials

• They look to:

• Family- 2x more likely than any other generation to use family counsel as the most influential factor in making choices around money

• Friends

• Bloggers that document their personal experiences with products

• Consumers who write real reviews

• Why?

• Because these groups already have personal experience with the products or brands

MILLENNIALS:

SOCIAL NETWORKS & TECHNOLOGY ARE THEIR LIFE*

• 75% created a profile on a social networking site

• 55% visit those sites once/day

• 60% connect to the Internet wirelessly when they are away from work or home

• 88% text each other

• 74% new technology makes their life easier

• 50% use it to be closer to their friends

• 65% are disconnected one hour or less a day

*Pew Research survey

MILLENNIALS: TAKING ACTION IS A CORE VALUE

• 70% recommend their favorite brands to family and friends

• 47% write about good online experience

• 40% have criticized a brand on a social network

• 70% would create a video and post it online or write a review about their experience with a company

• 20% have posted a video about themselves on line

They key for brands? Inspire action

MILLENNIALS: THEY SHARE THE GOOD & THE BAD

• They text 5 friends and share

their frustration on Facebook

• The friends share the story with

their peer groups

• Friends comment on the

incident and share their own

stories of disappointment

• A single event has spread like

wildfire

When seeking customer service on an issue, <10% would call customer service.

If a Millennial has a problem with a company, instead of calling

customer service

Source: http://www.sodahead.com

MILLENNIALS: WORD-OF-MOUTH IS A MAINSTAY

“Focus on making an excellent product.

If you do, then all of your marketing will be true and most of the marketing will be done by us.

We are all looking for great products and brands to share with our friends.

The best way to help us spread the word is by first creating a great product.”

BANKS & MILLENNIALS

BANKS: 2011 GLOBAL BANKING SURVEY:

A NEW ERA OF CUSTOMER EXPECTATION

Source: Ernst & Young Study of 20,500 participants

BANKS: HOW DO THEY STACK UP MILLENNIALS?

• 30% have 20-40% Millennials as customers

• 31% have a Millennial Strategy

• 37% had no Social Media Strategy

• 63% said they planned to do something with Social Media

*Source: Oracle Financial Services Study

MILLENNIALS: THEIR VIEWS ON MONEY

• Millennials generally:

• Love to spend

• Don’t have long-term investment plans

• Most popular banking products are credit, debt cards, loans (school and mortgage)

• Mobile banking is a preferred banking channel

• Want assistance to manage their money

• Recommend their banks to family & friends

*Source: Oracle Financial Services Study

Because Baby Boomers are drawing

from their savings, to generate revenue

Banks need to reach out to Millennials

• Millennials don’t have to

rely on product marketing

information

• They can tap the whole

world of data to make

purchase decisions

BANKS NEED A NEW WAY TO APPEAL TO CUSTOMERS

• Banks need to understand where they fit into Millennials lives

• Banks must find different ways to communicate with Millennials, directly and indirectly through their social networks, colleagues and influencers…

The old playbook is out

MILLENNIALS:

WANT HELP REACHING THEIR PERSONAL GOALS

• They pay attention to brands that impact their goals

• Affording house, buying a car, raising children, going to school…

Source: Deloitte Study

• Are financially guarded; generally have conservative asset plan allocation

May be due to:

• Life-defining events they have witnessed

• Have more access to financial information

than predecessors at similar life stages

• Don’t feel they have enough financial

education to manage their investments

• Bank’s products & services seem complex

RECOMMENDATIONS

Step 1: Accept the Millennial Generation

Don’t say, “In a few years they will be like us…”

Millennials are…

• On the leading edge of trends that they & older generations follow

• Online banking

• Resistance to traditional marketing

• Concern for the environment

Strategies that effectively meet the needs of Millennials provide

benefits for other demographics

*Source: Deloitte Financial Services Study

MILLENNIALS: CAN U UNDERSTAND THEM?

*Source: www.transl8it.com

MILLENNIALS: CAN U UNDERSTAND THEM?

*Source: www.transl8it.com

RECOMMENDATIONS

Step 2: Customer Experience Channels– Integrate Them Well

• Conduct customer experience – day in the life of – studies of your

channels

• The trend is to move from just branches: offer: the branch store, the

online store, mobile store, face-to-face & social networking store

• Combine store experiences in the same transaction: research in one

place, educate themselves in another, purchase in another…

• Make it easy to navigate / switch channels

• Provide a consistent customer experience across all channels


EXAMPLE:

ING DIRECT

• Focused on networking and learning

• Branches became a social networking venue where friends & family

gather, even if they aren’t make a financial transaction

• Once Millennials developed a relationship with the bank, they were

more likely to do banking there

Created Drop-in

Café’s in LA, NYC,

Philly, Wilmington

EXAMPLE: CAPITAL ONE

• Opened a branch in Manhattan

• Shares the space with

Starbucks

• Convert loose change in the

bank’s bean counter machine

to get a coffee

• Coffee drinkers can enjoy Starbucks, watch the news on a TV

and then go do a financial transaction with a Capital One Advisor

• A bank becomes a place to linger, talk, socialize and bank

RECOMMENDATIONS

Step 3: Marketing As Education vs. Telling

• Millennials lived in an information-intensive, connected world

• Move from product marketing to relationship marketing

• Provide practical information to build relationships

• They are skeptical of traditional advertising; rely more on the

advice of friends and family

• Create blogger outreach programs to influential Millennials

• Always better to have the voice of the customer provide testimonials for this group


EXAMPLE:

ROYAL BANK OF CANADA

• Created a contest with User-Generated Content

• Grand prize: $5,000 for best picture

• How $1,000 would improve student life

• Go to RBC’s Facebook Fanpage

• Download and print an Arbie template

• Find photo opportunities to show Arbiehow $1,000 would improve their student life

• Learning to surf

• Travelling to Europe

• Buying a 30” computer monitor

• Upload the pictures and vote!

EXAMPLE:


Leverages social media

• Community Manager

• RBC Advice Center on

Facebook

• iPad Educational App

• Mobile App Information

• Daily Advice Game…

EXAMPLE:


Leverages social media with

an RBC Advice Center on Facebook

RECOMMENDATIONS

Step 4: Make Products Simple

• Millennials prefer simple, practical, affordable banking services

• Show you understand they are just starting their financial lives

• Use social interactions to draw attention to products

• Appeal to doing good things


EXAMPLE:


Education about the Mobile application on Facebook page

EXAMPLE:


Education about Learning Money app for iPad on Facebook page

EXAMPLE:


• Sponsored Filmmakers Competition

• Helped made dreams come true

EXAMPLE: SUN TRUST• Campaign: Seeing Beyond The Money

• Actively support organizations and activities that

share our commitment to enriching and strengthening

the communities in which we live.

EXAMPLE: WACHOVIA• Central Piedmont Community College (CPCC)

received a $250,000 grant

• Provide retraining and counseling for displaced

professional and paraprofessional workers.

How to Engage Millennials for Financial

Services through Social Media

Chief Customer Officer

Empathica

June 28, 2012

Dr. Gary Edwards


The Evolution of Customer Intelligence

42

Service

Satisfaction

Loyalty

Customer Engagement

Str

ate

gic

Valu

e ADVOCACY

© 2012 All Rights Reserved - Confidential 43

85% of customers

give feedback

29% believe it is

acted on

Customer (Dis)Connect

Empathica 2012


1 in 3 people come

to a brand through a

personal

recommendation

Satisfied customers

spend 33% more

More than 50% of

consumers feel that

service levels are

inadequate

Americans complete

2.6 billion surveys

per year

What We See as the Opportunity

44

Desire to

Connect

Desire to Matter

Build

Connections

Drive Growth

Empathica Consumer Insightshttp://www.empathica.com/consumer-insights/

http://www.empathica.com/consumer-insights/




Harness the Untapped Potential

Nearly 1/3 of banking

customers feel their

institutions provide great

customer service

45

Empathica 2010


Customers Trust Each Other

46

Of consumers say they trust word-of-

mouth and recommendations from

friends and family,

above all other forms of

advertising

92%

Neilson 2012


Millenials Most Likely to be Advocates

18-24 25-34 35-44 45-54 55-64 No Answer

Yes 44.75 46.49 39.98 31.61 23.46 14.59

No 46.59 49.09 57.65 66.04 74.97 76.83

Don’t Know 8.66 4.42 2.37 2.34 1.58 8.58

47

“In the last 3 months I have recommended a certain retailer or

restaurant to a friend via a social media network such as

Facebook or Twitter.”

Empathica 2012


It Starts With the Customer

48

Start a Conversation

Give a Voice to Recommend Create a Dialogue

30 Million

Surveys/Year

110 Million

Positive

Impressions on

Social Media


Take Feedback to the Next Level

49

Increase Engagement

20,464 Customers completed

mobile survey in 6 months

• 25% of total responses

• 58% Mobile from QR Codes


Find Satisfied

Customers

Convert Customers

to Advocates

Give Customers a Voice to Recommend

50

Amplify the Voice of

Your Advocates

“I love my local bank… the staff is

friendly and always there to

answer my questions…”

- Shared with Facebook friends500

100+ Brands 12% - 20%

conversion

1 Million+

Advocates Mobilized


Only customers with high intent to

recommend are invited to make a

recommendation

Customer makes a personalized

recommendation

Recommendation is shared via Facebook, Twitter

and email with all of the advocates’ friends

Facebook Post

Customer completes survey

and intends to recommend

Twitter Post

Email Post

Find and Mobilize Advocates

51


Only customers with high intent to

recommend are invited to make a

recommendation

Customer makes a personalized

recommendation

Recommendation is shared via the Facebook

newsfeed and Twitter page with all of the advo

GoRecommend – Amplify Great Service Experiences to the World

Facebook Post

Customer completes survey

and intends to recommend

Twitter Post

Email Post

Positive experiences

shared with over

110,000,000+Friends and Followers

100+ Brands

Over 1 Million Advocates Mobilized

20% Accept

Invitation

52

Recommendation is shared via Facebook, Twitter

and email with all of the advocates’ friends

The Impact of Advocacy


Connections With 5000+ Customers in 3

Months

53

Top 2 Box Score 76%


Advocacy Not Advertising

54

PaidAdvertising

13.5 X higher click rate than Facebook advertising

8.5 X higher click rate than Google advertising


Socialize the Customer Experience

55

“We’re turning attention to linking operations to

marketing through Social CEM.

The aim is not to drive online advertising impressions, but to explicitly and transparently drive the behavior of customers, front line service staff and managers.”


Who We Are

56

• Full CEM product suite – Patent-pending social media

advocacy, customer feedback, and employee engagement

solutions

• 150+ employees in North America and the UK

• 30 million surveys, 50+ countries, 25+ languages

• Robust growth plan driven by industry-leading products

Thank You

Contact us to Learn More

Chief Customer Officer

[email protected]

Gary Edwards

http://www.empathica.com/industries/banking-insurance/

View Recorded Webinarhttp://cem.empathica.com/Web-WB-BDI-Banking-Webinar

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