In a previous post, we talked about encouraging younger children to save and how banks can come alongside families to help encourage wealth-building behavior at an early age.
Now –cue the scary music –the teen years.
The teen years – for more reasons than can be addressed in a single post –pose countless challenges, ranging from academics to zits.
When it comes to finances, parents learn quickly that caring for their teenage sons and daughters is more expensive as the years press forward. From cars to college, the lesson is clear: It takes more than a bubblegum budget to financially navigate ages 14-18.
It’s a big issue to tackle. But the biggest financial issue for teens in a global economy that demands more education is paying for college. College graduates will earn more over their lifetime than those with only a high school diploma. According to the Pew Research Center, the earnings gap between college and high school grads is the widest it’s been in generations. College grads earn $17,500 more annually than their high school counterparts, according to a 2012 survey reported on in US News and World Report. Obviously, the earnings gap something to discuss early on in the process.
Beth Kobliner, the author of “Get A Financial Life” and a member of the President’s Advisory Council on Financial Capability, recommends that parents need to calculate how much they will need to contribute to college savings annually, as well as financial aid. The college money question is a great opportunity for banks to partner with families.
It’s tough to market to teens. But many banks are trying to crack the market. That’s a smart move, according to Packaged Facts and The Street.com, teens are an $80 billion market.
Jesse Smith, a senior consultant for the Gallup organization, says community banks have a great opportunity not available to larger banks.
In a post by Beth Youra on the Gallup organization’s website, Smith said, “Community banks are in a unique position to learn more about their customers and their core values than larger banks. One particular emerging area where community banks can differentiate themselves is by seeking to better understand the well-being of their customers. Not just their financial well-being, but the other elements as well – physical, social community and purpose, This approach benefits both the bank and its customers. It allows the banker to understand customers holistically, which ultimately helps them take a personalized and consultative approach that is not centered on products.”
That holistic approach applies to millennials –including teens – as well.
“…[M]millennials have been a hot topic in the industry, as they are widely known as being risk-averse and distrusting of banks,” Smith says. “Community banks are often viewed as having a more personal approach than larger banks, and should use that to their advantage.”
In our view, that personal approach can make a big dent in the teen market, simply by investing time in the activities, institutions and organizations where kids are involved – schools, athletics, clubs, churches and other organizations.
Direct involvement at college and career days or business-oriented school organizations like Junior Achievement or Future Business Leaders of America can have a huge impact. Institutional support for athletics, yearbooks, school publications and other activities also has influence. Advertising campaigns geared to attracting teens have to resonate with adults as well.
Also keep in mind that while teens are trying to establish their own unique identity, their parents still wield great influence, especially in the financial arena. Chances are, if the parents are customers, the child will be as well. And, once teens establish a checking account, chances are good that the bank has won a customer for life. A side note: Some banks are offering bonuses to new teenage customers who open checking accounts. It’s a simple, terrific marketing tool.
