A Look at Loyalty: Generation CompleX

See what makes Gen Xers tick — and how to win over this less-than-loyal audience for the long-term.

Their loyalty is questionable, but they’re motivated by rewards. They like online tools, but also want personal attention. They’re stocking their savings accounts, but withdrawing from retirement plans — and struggling with daily expenses and debt. No question: Generation X is full of contradictions and not the easiest audience to please. Yet, now in their early 30s to late 40s, Gen Xers are in their prime earning years and should be high on your priority list. Here are some insights on how to treat them so you can keep them.

Facing Financial Challenges
Between 2007 and 2010, Gen Xers lost 45 percent of their net worth, according to a Pew study. More than half of them carry a balance on their credit cards. Nearly a third are still paying off student loans — yet they may also be paying for their own children’s’ college education and supporting aging parents.

No wonder 50 percent of Gen Xers say they have difficulty meeting monthly expenses— and more have withdrawn money from retirement funds for non-retirement purposes than any other generation. And, while they have more set aside in savings accounts than Boomers, they’re less likely to have funds in higher-earning alternatives like money market accounts and CDs.

• What you can do:
  • Make sure Gen X customers understand the benefits of alternatives to a basic savings account and how these options might fit into their financial plans.
  • Share solid strategies to help them manage and reduce debt.
  • Provide an online budgeting tool.

Tech Savvy, but Seeking Personal Interaction
While not pure digital natives like Gen Y, Gen X nonetheless is comfortable with technology and using it to make banking tasks easier. They expect that online and mobile banking will be options, and they’re more likely than older generations to use online tools to glean advice on financial matters.

Yet, they aren’t ready to completely go it alone. Some 30 percent want assistance with financial management. In addition, they seek banks where they’ll be recognized and have personal attention.

• What you can do:
  • Make sure Gen X customers have easy access to online banking, online bill pay, mobile banking (including mobile deposit) and text alerts.
  • Give them online calculators, webinars and other financial management tools.
  • Create opportunities for personal interaction — live video chats, traditional face-to-face meetings (but let them schedule the appointment online) and free financial reviews.

Lacking in Loyalty
Compared to older generations, Gen X customers tend to be less loyal to a particular financial institution. One reason may be that they are more likely to be charged banking fees than older generations — and that can quickly lead to price shopping and bank hopping.

On the other hand, Gen Xers can be motivated by rewards. For them, loyalty programs are the norm, and they’re more likely to participate in banking rewards programs than older consumers. (In case you’re wondering, all generations rate cash back and gift cards as the top rewards.)

• What you can do:
  • Make it clear to Gen X consumers how they can minimize or eliminate fees.
  • Offer a rewards program tied to the overall banking relationship, rather than one specific card.
  • Make banking convenient — ATM locations (or lack thereof) are a primary consideration when Gen Xers choose a bank.

Foundations for the Future
Despite the complexity of Gen X, you have plenty of options and opportunities for pleasing these customers — and building a solid foundation to maintain the relationship right on through their golden years.

How many Gen Xers are in your customer and prospect base? Which age group or audience segment holds the most profit potential for your bank?

Download the report at Customer Communications Group