Creative Campaigns Reach Gen Y
May 25, 2011 
CUNA’s E-Scan online research portal
The numbers are dismal. Fully 69% of consumers ages 18 to 24 are “not at all familiar” with credit unions, according to CUNA’s 2011-2012 Survey of Potential Members.
But to some credit unions, that’s cause not for despair but for action.
The few credit unions that have hired online-savvy spokespeople—known as “spokesters”—have benefited from their talent at pulling in the deposits of thousands of young adults. The secret to the spokesters’ success—using the Web to build a community that is still fundamentally local—has drawn the attention of banks, reports American Banker.
The spokester recruitment is at the core of the Young & Free campaign, launched in 2007 by Currency Marketing, a credit union marketing company in Chilliwack, Canada. The campaign started from a fundamental proposition: Credit unions, faced with an aging population of members, had to do something to stay relevant and to gain a new, young base of customers.
Young & Free provides the tools to engage the youth market, using a combination of social media and contests to find a young, media-savvy credit union spokesperson. To connect with younger consumers, credit unions that run the campaign are also urged to create price-sensitive products, such as free checking accounts with low or no fees.
The campaign’s successes carry some instructive messages about social media, particularly about the importance of having a sincere message and spokesperson—and about the need to tie their efforts to a larger community goal.
“Young & Free isn’t simply a social media campaign, it’s a multichannel campaign for attracting Gen Y,” says Ron Shevlin, a senior analyst at Boston’s Aite Group.
Credit unions that have joined the program have had dramatic growth in sign-ups of Gen Y members.
“We’ve increased our membership in that age group by 50% since launching the program in 2010,” says Jessica Emert, marketing director for ORNL Federal Credit Union in Oak Ridge, Tenn. The $1.3 billion-asset credit union started its campaign in February 2010 and now counts 3,000 Gen Y members among its 154,000 members.
So far, nine U.S. credit unions have participated in Young & Free, and many say they have more than doubled their Gen Y membership. Only one credit union per state participates. The most recent entrant is Michigan First Credit Union of Lathrup Village, which announced its involvement in February.
In April, state credit union associations in New Mexico and Maine launched searches for their own Gen Y spokester through the Young & Free program.
The typical spokester is an engaging, social-media-savvy young adult who represents the credit union for a year in its Gen Y marketing efforts. The spokester is chosen in a contest where credit union members vote for a favorite through social media channels.
The spokester gets an annual salary from the credit union of around $30,000, plus a car used to attend community events, and all the technology necessary to engage young members with social media. The spokester also must run a website for the campaign, develop contacts through social media, write daily blog entries, interact with members over Twitter, and post videos.
“We felt strongly that giving the credit union voice to a young person would be a great way to differentiate credit unions from banks,” Tim McAlpine, president and creative director of Currency Marketing, tells the Banker.
The numbers
Only 11% of Gen Y has a primary financial relationship with a credit union, versus 15% of all other ages, according to an August 2010 survey by Javelin Strategy and Research. By contrast, 43% of Gen Y had a primary financial relationship with a top-10 bank, compared with 38% of all other consumers.
“The reason we see this is Gen Y’s hunger for things like online banking, mobile banking, and ATM relationships,” says Mark Schwanhausser, a senior analyst for Javelin. “These are all high priorities for Gen Y, and challenging for credit unions.”
Though not all credit unions have the technological reach of the largest banks, credit unions can boast some other important attributes that those banks cannot, Schwanhausser said. Namely, they have roots in local communities and, foremost, they are not for profit.
“Social media is all about the creation of community, and that’s also a big part of the credit union movement,” Jacob Jegher, senior analyst for the research firm Celent, tells American Banker.
Gen Y is mobile & online
Like many of its peers, Michigan First Credit Union has an aging membership and recognized the need to bring in new members. When it joined Young & Free, it also realized it needed to offer members the technology to go with their accounts.
Along with a contest for a spokester, Michigan First has started to offer something it calls First Gear, a joint checking and savings account for people 18 to 25. The product has no fees, and it forgives overdraft fees twice a year. It also offers signers a 1% discount on an auto loan for a new car.
Michigan First also hopes to use Young & Free to establish a set of best practices to engage consumers on its new mobile banking site.
“One of the reasons we wanted to launch the program was to have the Young & Free spokester engage in a conversation with peers, and hopefully bring back ideas and suggestions to that age group,” says Linda Douglas, vice president of marketing for Michigan First.
