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Closing the Generation Gap

Think Youth Marketing is Too Time-Consuming? Think Again!
It’s an Investment You Can’t Afford to Ignore.

Piggy BankMake no mistake about it, capturing the attention—and the wallets—of today’s youth is definitely not child’s play. It is big business, and it requires a well thought-out marketing plan.

For financial institutions in particular, the time is right to “think young.” Baby boomers have already begun to retire, and this trend will grow in the years ahead. So it should come as no surprise when they start dipping into their retirement accounts for a wide variety of reasons, from medical expenses associated with aging to realizing long-awaited travel plans or perhaps relocating to retirement communities. “How are you going to replace those lost deposit dollars?” asks Sue Schabert, Marketing Services director of program management for Harland Clarke.

One very smart option is to look more strategically at the younger generation for new account acquisitions. Youth and young adults—roughly ages 9 to 29 and sometimes referred to as Generation Y (or Gen Y for short)—make up more than a quarter (28 percent) of the population, according to 2006 data from the U.S. Census Bureau.1 That translates to some 83 million potential account holders.

Earning power is a factor, too, in the desirability of this market. Consider that universities are churning out more college graduates than ever before. According to the U.S. Census Bureau, nearly twice as many adults, ages 25 to 29, have college degrees as those age 60 and up, a trend that would seem likely to continue. As educational level is correlated with higher salaries and more disposable income, financial institutions are smart to reach out to the under-30 market.

Generation Green / Money Makers / Cash FlashYouth Connection Solutions
from Harland Clarke


Yet they are not necessarily doing so, at least not to the degree that one would think. A Harland Clarke e-mail survey of financial institutions, found that while 70 percent of community banks felt that the youth and young adult market was a medium or high priority, only 20 percent actually had a formal marketing program in place to reach them. The results for credit unions revealed a similar pattern: 90 percent ranked the priority of youth/young adult marketing as medium to high, yet only 40 percent said they were currently implementing such a program.

“Embarking on a youth marketing program involves considerable strategic planning and expertise in that demographic,” explains Schabert. “While financial institutions may find it easier to simply grow existing, well-established relationships, targeting the youth market is a longer term strategy to replace current relationships that have reached their maturity.”

An Untapped Opportunity

For many financial institutions, the prospect of lost deposits is finally representing a strong enough outside force to combat any inertia. Among those institutions with no current plans for youth marketing, 43 percent of community banks and 53 percent of credit unions expressed interest in implementing such a program if they had assistance in doing so. Clearly, marketing experts within these smaller financial institutions are beginning to see what an untapped opportunity this is for them.

“Financial institutions need to see youth marketing as a wise investment in the future of their organizations,” says Schabert. And given the fact that wise investing is something that financial institutions want to teach teens, it is fitting that they, themselves, take this advice to heart.

The first step in establishing a youth marketing campaign is to look at how teens and young adults behave financially. For example, according to research conducted by the international market research firm, Mintel, 84 percent of teenagers open an account at their parents’ branch. Thanks to online and electronic banking, this can become a long-term relationship. “They don’t necessarily have to close their hometown account if they relocate cross-country for college,” Schabert explains. Therefore, it is important to educate young account holders on “virtual” banking options that can eliminate the need to relocate their bank accounts.

Indeed, communicating online is key to getting the attention of this perpetually plugged-in population. According to the Bridge Ratings 2007 Study on Gen-Y media use, this group is exposed to more than 11 hours of media every day. Their interest in traditional media (e.g., television, radio, newspaper) has declined 22 percent since 2004, while time spent on the Internet has increased 23 percent during that same time period. One survey of today’s college students found that 97 percent owned a computer, 75 percent have a social networking account (such as and 76 percent communicate via instant messaging.2

The ABCs of Teaching Kids About Money

Programs for pre-teens ideally should help parents and schools teach financial literacy. “These kids are learning basic skills,” says Schabert.

“Ask yourself how you can help parents and schools teach the fundamentals, such as ‘what is a savings account?’ and ‘what is a check?’ and ‘what does it mean to borrow?’”

The goal here is to provide an educational framework so that children begin to understand these key concepts and to take on some limited financial responsibility, such as an allowance.

Adolescents from age 13 to 18 are learning budgeting and money management. “This group has more money than in the past,” says Schabert. A preloaded gift card to make purchases might be this age group’s first spending vehicle, other than cash. “It’s the right age to teach them about the concept of credit cards and paying interest over time, how to make decisions about spending versus saving, and what types of accounts are available besides checking and savings.” Young adults, age 18 to 25, are beginning to make major purchases such as cars or, perhaps, are paying college tuition or saving in order to rent or buy their own home. So this is the time to ensure that they are managing their finances on an ongoing basis. “Three-fourths of all college students these days have a credit card,” explains Schabert. “And more than half are responsible for their living expenses.” Also, the reality is that this generation handles finances differently than did previous generations. They make payments and transfer funds online and use a debit card rather than paper checks to get cash or to make purchases. But this simply highlights the fact that young adults need to learn how to manage their finances, if not on paper, then electronically. And that’s where financial institutions can help.

“Banks and credit unions have an incredible opportunity to grow their business here,” says Schabert. “They should be leading the charge in educating the next generation about how to handle money.”

While there is not universal agreement on the exact age range comprising these four generations, especially Gen Y, this chart provides an overall guideline.

Mature Market
Born before 1946
Baby Boomers
1946 - 1964
43 - 61
Gen X
1965 - 1976
31 - 42

Gen Y
(also called "Echo Boomers" or "Millenials")

1977 - 1998
9 - 30

Harland Clarke Marketing Services offers three youth marketing programs that can help you increase your share of this growing market—Cash Flash™ (for preteens), Money Makers™ (for teenagers), and Generation Green™ (for young adults). To learn more about Youth Connections and how you can incorporate these programs into a new or existing youth marketing campaign, contact your Harland Clarke account executive or call 866.609.8609.

  2. Reynol Junco and Jeanna Mastrodicasa Connecting to the Net.Generation: What Higher Education Professionals Need to Know About Today’s Students, NASPA; First edition (March 29, 2007)
  3. Harland Clarke “Marketing to the Next Generation” Powerpoint