Young & Free is a North
American credit union movement, set up to give young people a voice
and a head start in financial literacy. As Charles Davis reports,
it is well on its way to achieving its goal of helping credit union
partners attract one million young adult members.
Go deeper with GlobalData
Credit unions
are famously local in flavour, eschewing big-bucks marketing for a
more neighbourly approach.
Now, thanks to an online-savvy
marketing firm that is harnessing the power of social networking to
create branded credit union campaigns, a growing number of US
credit unions are redefining the relationship between financial
institutions and their markets.
Called the Young & Free
campaign, these online marketing drives feature contests in which
credit union customers select online spokespeople on Facebook and
Twitter.
The spokespeople – called
spokesters – then serve as online community builders for the credit
union, engaging with a younger, hipper slice of the market
essential to the future growth of credit unions, which, like banks,
have traditionally struggled to attract younger customers.
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By GlobalData
Gen-Y essential segment for
revenues
Only 11% of Generation Y had 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 Generation Y had a
primary financial relationship with a top 10 bank, compared with
38% of all other consumers. So reaching these highly mobile,
smartphone-wielding hipsters is key to narrowing this gap.
The online contests are part of a
Young & Free package launched in 2007 by Currency Marketing, a
credit union marketing company based in Chilliwack, Canada. Young
& Free aims to provide all the tools needed to reach the youth
market, using a combination of social media and contests to create
a high-profile contest to select a young, media-savvy credit union
spokesperson.
Credit unions that have run the
campaign are also encouraged to create signature price-sensitive
products, such as free checking accounts with low or no fees, to
launch along with the contest.
The centrepiece of the campaign is
a reality TV-inspired search for the spokester, who will serve for
a year as the credit union’s face in its marketing efforts to
Generation Y.
Currency typically receives dozens
of entries, then works with the credit union to select the final
three, who then engage in a series of online tasks, such as
man-on-the-street interviews with people about what they are
looking for in a bank.
Making youngsters
ambassadors for the union
“We’re looking for someone who is
incredibly engaged with social media, but someone who also is a
loyal and passionate credit union member,” said Tim McAlpine,
president and creative director of Currency Marketing.
The spokester gets an annual salary
from the credit union – typically around $30,000, plus a car to
attend community events and all the technology necessary to engage
young members with social media: a video camera, a laptop and a
smartphone.
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.
Young & Free’s first spokester,
for CommonWealth Credit Union of Alberta, a young woman named
Larissa Walkiw, set the bar high, becoming a surprise hit on
YouTube with an ingenious series of informative, hilariously
low-budget videos detailing the differences between credit unions
and big banks.
The cartoon-like images, shot on
white paper with stick figures in stop-motion animation, have been
downloaded tens of thousands of times. Walkiw’s online fame was
exactly what Currency was looking for, said McAlpine.
“Young people are generally
disaffected from huge institutions that are only focused on profit,
and credit unions really speak to that,” McAlpine said. “It was
only after Young & Free Alberta that the light bulb popped on
and we saw the potential for franchising it across North America.
Larissa was a rock star, and from there it just took off.”
Banks do not seize Gen-Y’s
potential
It takes the right person to
represent a credit union online, McAlpine said.
“Remember, we are asking credit
unions to hire an 18-year-old or 19-year-old to come in and do
content on their institution, with no internal controls, and no
pre-approval,” he said. “This is why big banks won’t do this kind
of stuff, and it gives credit unions a real opportunity.”
CommonWealth Credit Union – now
part of the much larger Servus credit union following a series of
acquisitions – had around 3,000 17-25 year-old customers when Young
& Free launched. In the campaign’s first year it added 2,700
more, and a year later, fuelled in part by the mergers but also by
Young & Free, Servus added more than 20,000 young adults.
ORNL Federal Credit Union in Oak
Ridge, Tennessee launched a Young & Free campaign in February
2010 and now counts 3,000 Gen Y members among its 154,000 members.
South Carolina Federal started its Young & Free campaign in
2008, and has seen its share of young adults grow from 4% to 9%.
They are not huge numbers, but they do not need to be to make a
huge difference, McAlpine said.
Gen-Y’s skills
“unimaginable” for previous generations
“Look at some rough math, and you
see that there are approximately 100 million credit union
members in the United States and Canada, and 13% of the combined
population is 17 to 25 years in age, but credit unions only have 4
million young adults. So if we were just keeping up with the
population, we’d have 13 million or so young adults.”
Today’s spokesters combine youthful
energy with social networking skills unimaginable a generation ago,
McAlpine added.
The spokesters come together for
the Living Young & Free Show every two weeks, in a video show
aimed at advice and financial literacy. Each spokester is assigned
a video to create over the two-week period, and the result is a
creative showcase for these digital storytellers.
“We don’t have to tell any of them how to do this work,” he
said. “It’s second nature for them, and so we just turn them loose
on building the brand.”
