Young customers: who, what and: now that the baby boomers are starting to retire, banks need to redirect their marketing to focus on the younger customers that follow. Remember, the so-called X and Y generations do not see and respond to the world in the same way that their parents did.

• Author: Brandt, Mark
• Position: Fundamentals: generations X and Y

For the last couple of decades, financial institutions have positioned themselves to serve the needs of baby boomers, that huge population of 76 million people born during the years 1946 to 1964. Yet within four years, the leading edge of the baby boom generation will turn age 62. In other words, the boomers are on the brink of retirement: Millions of them will be disappearing annually from the workforce.

Who will replace these baby boomer customers? And how do banks reach these younger, newer generations of customers?

The core values of generations X and Y

Those who follow in the immediate wake of the baby boomers are known as generations X and Y. To learn how to successfully market to these younger generations, banks first have to look at the factors that influence them. What are their core values and attitudes?

The top four values for Gen X (born in the years from 1965 to 1976) include:

(1) A belief that Social Security will not be available to them at retirement age.

(2) A tendency to make their retirement decisions at a much earlier age than boomers.

(3) A belief that time is more valuable than money.

(4) A proclivity toward using Web-based financial services and Web-based financial planning.

Four of the top characteristics for the Gen Y segment (born during the years 1977 to 1994) include:

(1) They are financially savvy and know what they want.

(2) They have never experienced a significant economic downturn.

(3) They view debt as a necessity but also view saving and investing with equal importance.

(4) They save on average 19 percent of their income.

Delivery preferences

Another key area for examination is delivery preferences. These younger generations have different feelings on how and where they want to bank, compared to the boomer generation. Top preferences for the Gen X segment include:

(1) The Internet, which is their preferred method of interaction with their financial institution.

(2) Financial planning through their financial services institution (42 percent have a financial planner; 15 percent intend to locate a financial planner online).

(3) Account aggregation. (They would use it if their bank offered it.)

Top delivery preferences for the Gen Y segment include:

(1) Personalized and customized delivery.

(2) Online banking. (Every service must be offered online for them.)

(3) Face-to-face meetings. (They prefer building relationships.)

(4) Easy access. (They do not want to wait in lines.)

Approaching generations X and Y

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