Building a Love of Savings: How to Help Younger Customers "Start Their Financial Lives"
By Melissa Chefec, Business Development Manager
What makes some people savers and others spenders? And how can banks and parents instill a love of saving in young kids that will last throughout their lives? Bank marketers should seize the opportunity to best educate kids and their parents about money and saving, helping cultivate and nourish long-term financial health while building the foundation for long-term profitable banking relationships.
Parents need to think about how, when and how much to talk to their kids about money. In some respects, it is akin to talking with them about the birds and the bees. It’s a little touchy, sometimes awkward and often overwhelming. Parents want to educate their children and help them create good habits when it comes to money and saving, and at the same time they need to be sure to be giving age-appropriate, digestible, accurate and actionable information.
So how can banks help? The following are three tips for bank marketers to help young people develop a love of saving and hopefully a long-lasting relationship with a bank:
- Motivate kids to save, describing benefits they can relate to.
- Provide the products and tools for kids and young adults to save.
- Cultivate relationships with young customers that could lead to long-term financial partnerships.
Motivation and Benefits
Bank marketers can and should establish financial literacy programs targeting kids and parents about the benefits of saving, focusing on the importance on saving for the short, medium and long term.
Teaching kids healthy habits about money means educating them to not spend it all at once and emphasizing the benefits of saving for the future. Whether it’s saving to buy a birthday gift, a new toy, tickets to a baseball game or even for college, the message is the same: start saving today and you’ll have money when you need it later.
Products and Tools
The first saving tool many kids will encounter is a piggy bank. That’s a good start. From there, banks need to make smart and accessible savings products available for kids at various ages, starting with savings accounts with no fees or minimum deposit levels. This kind of product is ideal for young savers. Savings clubs with regular deposits is another way to help young savers grow their savings. As children become young adults, additional products and services may be more appropriate for them—think debit cards, online banking and online transfers.
Bankers can also design new products specifically for children and young adults, like student accounts. These accounts often offer savings bonuses, account opening incentives and special features that are ideal for a younger audience. Importantly, specific communications need to be crafted that are targeted to children and young adults, helping to pique their interest and spark a love of saving with the end goal of creating lifelong customers.
Building Long-Term Relationships
The earlier a person becomes a customer, the more likely they are to remain a loyal customer. When young children get their first bank account, it’s an exciting accomplishment. As they see their savings grow over time, the hope is that they will be motivated to continue saving year after year.
Bankers need to nurture and cultivate relationships with young customers every step of the way by providing excellent products and services as well as transparent, consistent communications. In this way, they can ensure that their youngest customers feel welcome and appreciated.
Special attention should be paid to your young audiences and long-term marketing investment should be directed at supplying them with appropriate products and services at every step of their financial journey. When banks can achieve this, they reap years of benefits and sustained revenue from lifelong, brand-loyal (and brand-promoting) customers.
MKP communications inc. is a New York City-based communications company specializing in financial services marketing and merger/change communication.