Jeff Judy

Jeff's Thoughts - October 15, 2008

What I've Learned: The Generations (II)

As mentioned in recent issues of Jeff's Thoughts, one theme that came up again and again at the banking schools where I taught this past summer was the whole "Generation X, Gen Y" concept. Bankers are concerned about reaching customers from the younger generations, young people who are now entering the years where they start to form banking relationships.

They want to lock in young people currently leaving college and entering the workforce are loyal customers, so they can grow business from these customers as their assets increase and their financial dealings become more complex.

Unfortunately, many bankers -- and the host of consultants who make their living writing and speaking on this topic -- think they know just how to deal with anyone in that age category. They "know" they have to approach these prospects differently than their older, more established bank customers. They "know" that everything has to be online, and that this generation is focused on short-term issues rather than long-term plans.

The funny thing is that when bankers start expounding on these views of Generation So-and-So, I can bring the conversation to a screeching halt with a single question:

How do you know?

Turns out, nobody I talk to has much of an answer for that one. I get a lot of "I heard . . ." and "Everybody knows . . ." and "They say . . ."

Is that the quality of information you want to base your business decisions on?

This is simply a case of stereotyping, of taking a group that shares a certain characteristic (age) and jumping to conclusions about other important traits for that group.

For example, consider online services. People tell me that all their young customers do everything online. Then they complain that their middle-aged and mature customers have so much trouble with technology that they force the bank to work with them inefficiently, always wanting to deal with a live person, a teller or a banker.

Is it really that simple? Somewhere, presumably in the Northwest, some lucky bank has a 53-year-old customer named Bill Gates. You think he avoids online stuff because he's afraid of technology? If he walked into your bank and you didn't know who he was, would you just annoy him with all your assumptions about how people of his age want to do business with you?

At a conference for training directors a few months ago, one of the "chief learning officers" there shared some unusual data. Unlike most of his counterparts, he had gone beyond accepting assumptions about generations and actually surveyed employees in his company about how they wanted to get training. His data showed, as he said, that "not all young employees are gamers." In other words, no matter what their age, some people are comfortable with technology, some are not.

The customers who heavily prefer online services are just that, a group of customers with a common preference. By all means, work hard to meet their needs. But do not assume you will only find those prospects among your youngest customers. Or if you believe quality face-to-face customer interactions are a selling point for your bank, make your appeal to prospects and customers who prefer this style of banking . . . without suggesting that they are all nearing retirement!

As I said in an earlier article about "best practices," just copying what everyone else is thinking produces an industry of clones, and surrenders any distinct competitive advantage you might gain in your own market.

Stop blindly following "what everybody says" about generation differences. Look at the real differences among your customers, not because of how old they are, but based on how they like to do business. Choose the customer preferences you can accommodate with success, and distance yourself from the competition!