Watch What You Say!

Watch What You Say!

Your words may be turning off Gen Y.

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The words you use to sing the praises of your credit union could very well be pushing Gen Y away. How can your credit union change the words it uses to become more relevant to the next generation of credit union members?

The graying of CU memberships is a serious issue. There is a huge 10-year age gap in the world of credit unions. The average age of a credit union member is pushing 50 while the average of an American is under 40. This issue is forcing credit unions to wake up and pay attention to Generation Y. What worked in attracting baby boomers and Gen Xers won’t necessarily work in wooing members of Gen Y to your credit union.

Who is this elusive Gen Y? Members of Gen Y (also known as the Millennials) are age 16 to 30 in 2010. They are socially conscious, they distrust companies and media and they couldn’t care less about credit unions, primarily because they don’t understand what a credit union is or the benefits of credit union membership.

There is much to be done to reinvent the credit union industry. Everything from modernizing our product and services, our technology and our branches, to lowering the age of our employee base. But before being overwhelmed by the issue, let’s start with an easy and low-cost area—the words your credit union uses.

Describe What a Credit Union Is and Why it Matters

Let’s start with the term credit union. According to a recent study conducted by the Aite Group (, 24 percent of Gen Y have no idea what a credit union is, and certainly a much higher percentage have little understanding of what the advantages of dealing with a credit union are. In fact, the same study concluded that only 5 percent of Gen Y will even consider a credit union when looking for their next financial product.

Attack this lack of understanding head on by including a highly visible section on your Web site that explains what a credit union is and why it is different from and better than a bank. Provide links to and videos from the major news outlets that are extolling the virtues of credit unions. Visit $1.3 billion/92,000-member Trumark Financial Credit Union, Trevose, Pa., at to see a great example of this strategy in action.

While you’re at it, consider including easy-to-understand information about the seven cooperative principles and how they directly benefit your members. $540 million/41,000-member Seattle Metropolitan Credit Union, Seattle, launched a microsite at to do just that.

Have you asked your young employees for their thoughts? Christopher Morris, communications director at the National Credit Union Foundation ( shares this advice: “Survey your Gen Y employees with some simple questions, such as ‘What were you most confused about when you started here? What still confuses you? How would you simplify things and make our credit union more attractive to your peers?’” Their answers will give you great insights into where your communication is lacking.

Marketing Speak Does Not Work

DeAndre Upshaw, the 23-year-old host of the live Internet show, “Why Gen Y Live,” has this to say about “courtesy pay”: “Now, I know marketing speak. I studied it for a few minutes in college.

Courtesy pay is simply another term for overdraft fees, but the word courtesy is in it! It can’t be farther away from the word fee! This is stupid. No one that I know thinks overdraft fees are a courtesy. However, we do think it’s kind of sneaky that you persist in trying to foist this moneymaker on us.”

DeAndre continues, “Unlike any generation that has come before us, Gen Y has grown up with scads of information at our fingertips. Knowledge has always been but a click away; remember that little thing called Encarta? It was the successor to the physical encyclopedia and the predecessor to Wikipedia. And we all know the impact that blogs and Twitter have had on the spread of information. Because of this tremendous wealth of information we’ve had access to since birth, our BS-ometers are incredibly advanced and sophisticated. We can see through lame attempts to court our favor with half-cocked promotions and ads. We can see when you aren’t being sincere. We have this magic ball called the Internet and we aren’t afraid to use it to gain insight about your company, product or service. So please don’t lie to someone who has been using the Internet longer than you. It will end poorly.”

As you can see, members of Gen Y don’t mince words! They say it like it is and expect the same in return.

Clearly Address Gen Y’s Wants and Needs

The cooperative, not-for-profit message is good, but it will not seal the deal. Gen Y’s main concerns are convenience, accessibility, technology and fees. Often called the “Me” generation, members of Gen Y want to know what you can do for them right now. Alex Oliver, the 21-year-old Young & Free Tennessee spokesperson for $1.2 billion/161,000-member ORNL Federal Credit Union (, Oak Ridge, Tenn., says, “If a credit union wants to better connect with Gen Y, they’ve got to drop the jargon. Tell us why it’s worth our time to make the switch. We want a free checking account, free Web bill-pay, free direct deposit, no minimum balance and ATM fee forgiveness. Take out the asterisk and fine print and give it to us straight! If your credit union won’t give it to us, we know some other financial institution will.”

Kelsey MacDonald, a 21-year-old university student from Calgary, Alberta, who is also the 2010 Young & Free Alberta spokesperson for $10 billion/400,000-member Servus Credit Union (, Edmonton, shares Alex’s point of view. “Gen Y needs to hear it straight. If you want to get our attention, we need to hear the words ‘Free’ and ‘No Fees’ right away. We are a generation that is all about instant gratification so we need to know what will benefit us today. Not 10 years from now.”

CUs use phrases like “We’re small and local” to differentiate themselves from the large national banks. But to Gen Y, this may send the message that your credit union is “risky and inaccessible.” The small and local feeling rings true with baby boomers who are rooted in the community but Gen Y is extremely mobile. They want to know that they can access their money from across the state or country. Emphasize your shared ATM networks and shared branching in language that is easy to understand.

Credit unions also say “We’re more personal” or “We have better service.” Gen Y wants to know they can get at their money anytime, anywhere. Tell them about your great online banking or your mobile applications.

This will go a long way in alleviating concerns that your credit union is too small or too old-fashioned to address their needs.

Use Plain English, but Don’t Speak Down

It’s not that Gen Y is simple—that couldn’t be further from the truth. Members of Gen Y are actually very sophisticated and discerning, but they are also easily distracted and turned off. Anything that takes more than a split second to understand is ignored.

The word bank is not a four letter word to Gen Y. In fact, if more than 90 percent of Gen Y are banking with a bank, it makes good sense to use the term banking. Terms like “unbank” or “credit unioning” may seem clever, but they require too much explanation. Instead, use phrases like, “We’re like a bank, only better” and then follow that up with quick, provable reasons why your credit union is better than a bank.

Describe your products and services in easy-to-understand terms. Sean McDonald, chief marketing officer at $63 million/14,000-member Liberty Savings Federal Credit Union ( Jersey City, N.J., offers this advice: “I think we need to use a more modern vernacular with our members and potential members. Gen Y doesn’t relate to terms like member, cooperative, share account or share draft. These are all terms that are outdated and make our future members go ‘huh?’ Credit unions will not lose their identities by using more relevant terms to describe themselves, but we will miss out on a huge opportunity to capture more market share if we continue to use phrasing and language that doesn’t resonate with our target audience.”

Brent Dixon, young adult advisor for the Filene Research Institute (, Madison, Wis., adds, “I once heard a credit union exec who was bewildered why no one reacted to their ‘Save 50 Basis Points!’ special. When she wasn’t looking I had to turn to a friend and ask, ‘What is a basis point?’ Make sure you’re talking to your members like humans. Meet them where they’re at.”

Listen and be Respectful

Darryl LaPlante, a 23-year-old recent graduate from Charleston, S.C., and the 2010 Young & Free South Carolina spokesperson for $1.3 billion/161,000-member South Carolina Federal Credit Union (, North Charleston, S.C., offers this advice to credit unions looking to connect with Gen Y: “Credit unions just have to ‘loosen their tie’ when it comes to how they communicate with Gen Y. I understand that when you’re at work it’s a professional setting, but we, as Gen Y, aren’t looking for someone that can tell us the textbook answer to every question ... we get bored easily. We want to be leveled with. What we’re looking for is to be spoken to like a friend ... not a customer ... that’s what banks are for.”

Don’t be Afraid to Sell

A free checking account or ATM rebates may feel like loss-leaders, but you need to give to get. When you give young people a no-strings-attached head start, you are demonstrating that you care. This also opens the door to sell other products. Gen Y needs your products and services just as much as your CU needs Gen Y. Put a cross-sell strategy in place to convert that free checking holder into a multi-product holder with the potential to be a life-long member.

Beware Savvy Competition

BankSimple ( is a brand new Internet bank that is gaining considerable buzz leading up to its launch. Here’s some copy from its Web site, “BankSimple was born out of our frustration

with banking. We were fed up with our banks: the fees, the constantly changing rules, the crappy customer service. We saw an opportunity to fix these issues by making banking simpler. Most banks make money by keeping their customers confused. We don’t. We automate the hard parts of banking and make it easy for our customers to understand and manage their money.”

Another great example of smart word play comes from Virtual Wallet by PNC Bank ( Not only is this an amazing online banking system custom built for Gen Y, the language PNC uses is as ground-breaking as it is obvious. Checking is replaced by “Spend,” short-term savings and overdraft are replaced by “Reserve,” and long-term savings and investment are replaced by “Grow.” Spend, Reserve and Grow are far more intuitive than their antiquated predecessors.

Both BankSimple and Virtual Wallet by PNC Bank have made themselves extremely Gen Y friendly.

As you can see, by simply tweaking the words you use and really listening and understanding Gen Y, your credit union has a much better chance of attracting the next generation of credit union members.

Tim McAlpine lives in Chilliwack, British Columbia, Canada. He is the President and Creative Director of Currency Marketing, an integrated marketing agency specializing in helping credit unions attract the next generation of members. Tim is best known as the creator of Young & Free and CUES Next Top Credit Union Exec, and co-creator of the CU Water Cooler.

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