The acorns are still small - is it time to quit watering the oaks?

by Ron Daly 

Here in Virginia (at DMI world headquarters), we've experienced very little rain lately. Last night, however, we had a real soaker. Everything that grows got a much-needed drink and the grass is suddenly greener on everyone's side of the fence. 

This heatwave/thunderstorm pattern's put me in mind of the debate about "Gen Y" members/customers and their late Gen X/Young Boomer parents. Should CUs go after young members in hope of "watering" these financial acorns into the might oaks their parents have been? Should they continue to ignore these (mostly) broke users in favor of more fruitful consumers with better credit? Lending opportunities will keep on going for boomers and Gen X, right? 

Maybe not. The picture's looking a little bleak for the rapidly-aging Americans that have turbo charged our economy these past sixty years. A report from the Today show this morning showed many Boomers and some Gen Xers will run out of retirement money during retirement. Quite a pill to swallow, but not unexpected given the events of the past two years. 

Here's where you prove yourself a clutch player in the lives of your older members. You continue to guide them through the rocky shoal of making sure they can have what they need to stay afloat when they're not working and trying to enjoy their "golden years". Reports such as the one mentioned and increased economic concerns will undoubtedly weigh on your member's minds. Be the shoulder to cry on. 

And then, there's the youngsters. Rob Rubin of FindaBetterBank.com wrote an article in the Huffington Post about attracting younger members and making a conscious effort to decrease the average age of a CU member. It's easy to get caught up in the hype regarding Gen Y and to be sold a bunch of snake oil about how your CEO has to breakdance on YouTube and get a million hits to save you from being acquired in a merger. It's far more important to look at the facts. 

There's a good article in this month's Credit Union Management magazine about "capturing" Gen Y members. It highlights the good work of credit unions like Shell FCU and their iLife program. An important snippet from that article: 

"A lot of kids saw the struggles that their parents were going through and they didn't want to make the same mistakes," says [Traci] Archer [, Marketing Manager]. 

And as a follow up: 

iLife seems to have indeed spurred a youth movement within the Shell FCU membership. According to Archer, in the Spring of 2008, the mean age for all Shell FCU members was 47. In Spring 2010, the mean age was 41. 

That's an actual result. Hard to argue with facts. 

The article has great examples from a lot of other credit unions that went on a mission to recruit more Gen Y members and succeeded with enviable results. It's easy for young people to get disparaged by the media and the current climate. You can be a shoulder for them to cry on, as well. Make it known you want to create a lifelong financial relationship with them and start treating them with the respect and due deference you've shown the generation that sired them.

That bit of "data" that was being thrown around a while ago about how much money Gen Y stands to inherit? It's looking to be less and less likely all the time. The generation that we presume has been handed everything they've got is very likely to miss out on the big bonanza we've pictured them coming in to when we're all dead. Does that mean you're going to have thriftier, sharper consumers when Gen Y comes of age? Only time will tell, but you could certainly guide these young, pliable members in that direction. That is, if you're interested in having any members at all in the next ten to fifteen years.