In Prisma’s Savvy Scenarios series, we’ll cover use cases and strategies that lead to successful, data-driven marketing automation. Financial institutions are privy to customer data, and utilizing data insights aids in creating high-performing marketing campaigns. To be a savvy financial marketing team, your strategy may incorporate components of segmentation, emerging technologies, data intelligence, and messaging for specific niche audiences.
For our first savvy scenario, we hone in on life stages, talk about how age can be misleading, and then zoom into the graduate student.
Your customers/members are in different phases of their lives with distinct financial needs. While banks and credit unions have marketed to life stages for the past century, the approach often creates more noise than results due to a lack of proper data fueling your efforts. Age is often an initial starting point when planning your marketing segmentation strategies, but your customers/members’ life stage may not correlate to their age and instead speak to psychographic or firmographic data about their home or business.
For example, if a customer is in their early 20s, they could be in the midst of a variety of financial challenges and opportunities from undergraduate education, to postgraduate education, to unemployment, to working full-time. Despite sharing the same age, they will benefit from different financial services from your institution. Let’s dig into one common segment found in this age group: the graduate student.
Understanding The Mental and Financial Toll on Grad Students
For a variety of reasons, students in graduate school are oft-overlooked by marketers. This includes grad students that transition directly from undergraduate education as well as those who return to graduate programs 10, 20, or even 30 years later. A 2019 study focused on the ages of both part-time and full-time graduate students at public, private nonprofit, and private for-profit institutions. The study estimated that 75% of grad school students at public and private nonprofit institutions are under the age of 30. However, the majority of part-time students and students at private for-profit institutions are above the age of 30. As you can see, FIs can’t assume age correlates to need.
Whether your potential customer/member is 23 and continuing to accrue debt or she is 45 and taking on new debt that she and her family never anticipated, the financial stress is real (and FIs should recognize it). Graduate schools are competitive, high-stress environments, and many students face financial anxiety as an additional pressure beyond their academic performance. The number varies greatly depending on the type of degree, length of schooling, and institution, but the average student loan debt for graduate students is estimated to be above $82,000.
Graduate school is a financial and emotional burden for many students, even though they know it is an investment for their future. Researchers found that graduate students are six times more likely than the general population to experience mental health issues such as depression and anxiety. Another study conducted over the course of three years found that 60 percent of master’s students reported stress related to their finances, and over a third of these students worried about meeting their monthly expenses.
There are young graduate students wondering if they will ever live a debt-free life, and there are older students worrying about placing a new financial burden on their families by going back to school to improve their future career trajectory. Finances can be a contributing factor to grad students’ mental health state, no matter their age, and FIs have an opportunity to fix the discrepancy of financial knowledge and improve students’ customer experience. This is a marketable connection with an audience that could attract new customers/members to your organization.
Providing Advice, Not Just Products and Services
Understanding the financial anxiety that graduate-level education creates for people of all ages, it is important that banks and credit unions use this data for good. When financial institutions focus on a specific group of people, such as graduate students, they have the ability to conduct research and fulfill the needs of this particular life stage. The FI-customer relationship is highly influenced by the resources and relatability of the financial institution, and knowing your customers/members’ needs will improve their overall satisfaction and experience. Banks and credit unions have access to valuable customer information and transactional data, and they should use this information to their advantage in life stage marketing.
Financial literacy is a crucial piece of this puzzle, and many students lack the awareness of financial education opportunities within their own academic institutions. In the three-year study, the students expressed interest in financial literacy and wished they could go back and learn more about money management or loan payments before starting school.
FIs can start by providing graduate students with financial literacy items, and together they can work on important concepts such as saving, budgeting, and debt repayment plans. Incentivizing students with rewards is another way to market specific banking products and services to students while also benefiting them in the long run. Checking accounts with low/no maintenance and overdraft fees are attractive to students living on a budget, and they will appreciate banks and credit unions with user-friendly and modern mobile/online capabilities. FIs should look beyond the age of their customers/members, and start considering the multi-faceted makeup of a single life stage.
Savvy Life Stage Marketing Requires New Data Points
Life stage marketing has long been a calling card for financial marketers. In order for life stages to be meaningful, FIs should use multiple data points. There is a plethora of ideas to consider when marketing for a specific life stage, and the fortunate part is that banks and credit unions have the customer data to shape their strategy. Customers/members find value and satisfaction in institutions that understand them for who they are, whether they want information on paying off student loans or they need an account without fees. Now is the time for banks and credit unions to find niche pockets of customers/members who aren’t well-represented in the financial services industry, so they can market themselves with the long-term goal of improving customers/members’ financial futures.
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