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Guest blog: Attracting tomorrow’s members - Strategies for reaching new demographics

Peter Toole, Head of Financial Services and Insurance at Paragon, reveals crucial strategies for building societies to win over younger generations and first-time buyers by aligning products, services, and marketing with emerging demographics.  

In the dynamic world of financial services, attracting new members, especially younger generations, is more urgent than ever. Young people are building societies’ potential future members, so attracting a pipeline of them and first-time buyers is critical for long-term growth, value and profitability. 

However, one of the challenges building societies face in attracting younger generations is the rise of challenger and digital banks. Neobanks cater to young customers and appeal to them more than traditional financial services.  

Various studies show that the younger demographic prefers digital banks. According to Finder, 55% of Gen Zs and 56% of millennials choose them¹. Sustainability banks are also gaining ground, taking 8% of market share among younger groups, says Moneyhub²

The public sees building societies as member-centric financial service providers. Still, trust will diminish if the company fails to innovate products, services, and marketing to meet evolving demographic needs, especially during the digital customer journey. Executives, marketers, brand managers and other decision-makers must understand how to reach new demographics without losing the human touch. 

Understanding the needs of younger members 

It’s a simple truth that building societies that cater to younger members, especially their desire for flexible, digital-first experiences and ethical practices, are more likely to attract and retain them.  

Understanding young people’s needs will build more robust relationships and encourage engagement and retention. According to the National Centre for Social Research, 81% of Gen Z members want  to buy a home, but 78% are pessimistic about their ability to do it³   

In-depth knowledge means you can tailor financial products like savings accounts and first-time buyer mortgages to help young people entering the housing market while creating loyal members. 

Leveraging technology to connect with new audiences 

By leveraging advanced data analytics, open banking, and generative AI, building societies can personalise outreach and product recommendations and connect with new audiences. 

In addition, mobile banking apps, gamified savings tools, and social media campaigns draw in younger members with an engaging, enjoyable experience that builds loyalty. It also helps them learn about finance, which younger demographics often struggle with4.  

Gamification, used by Monzo and Moneybox, lifts customer satisfaction, engagement and brand loyalty, helping marketing and brand professionals reach new audiences5

The role of loyalty programmes in retaining younger members 

It’s not just building societies - the UK’s financial sector as a whole could benefit from rewarding their customers. Loyalty programmes are popular among UK consumers, with 97% of shoppers being members of at least one supermarket loyalty scheme, according to gov.uk6

Personalised customer journeys should include incentivising long-term relationships through financial services’ loyalty programmes. With personalised offers, loyalty programmes can attract younger groups and turn first-time buyers into lifelong members.  

Revolut Rewards has transformed customer engagement through offers like discounts in shops, restaurants and events, cashback on purchases returned straight into the account, and 10% cash back on gift cards if you use the app7

Club Lloyds’ tiered subscription programme offers lifestyle benefits like movie tickets, and its 1.6 million members’ deposit balance is 2.7 times greater on average than non-members8.  

Accenture says Bank of America’s loyalty programme led to a 99% retention rate and doubled the number of products each participant held. 

In conclusion, adapting to new demographics is vital to building societies’ future growth, and they can gain a competitive edge by embracing this approach. 

Therefore, I encourage readers to reflect on their approach to member acquisition and how their current strategies align with the expectations of younger members. 

Find out more

Visit Paragon’s website or connect with Peter Toole at peter.toole@paragon-cc.co.uk

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