Problem
How does that age cohort beloved of most mass marketers, the 18-34-year-olds, differ in attitudes to debt, preference for face-to-face “bricks and mortar” banking and ownership of credit cards?
Objective
This last-but-one in the series of syndicated research studies Mintel conducts in the U.S. and Europe investigated penetration rates across adult age segments for online banking, debit cards, traditional and RFID-embedded credit cards.
Opinion
The syndicated Mintel findings apply to strategic marketing decisions about penetrating and beginning to build lifelong relationships (one hopes) with upwardly mobile potential depositors. By revealing the card type, patronage factors (e.g. customer service) and security concerns of that fertile demographic, the 18 to 34 year-olds, this Mintel research provides a card-issuing bank a starting point for marketing more profitable retail banking services:
- Online banking because of the operational cost efficiencies;
- Credit cards for the fee income from merchants and interest payments on deferred payments.
Areas of Strength
The syndicated nature of the Mintel study qualifies it as secondary data, in the McDaniel and Gates framework, for a bank looking to redress gaps in its market insight and business intelligence. Secondly, the report (circa 2007) gives a cross-section of an entire age cohort across the nation – irrespective of personal disposable income, social status, educational attainment, physical proximity to branch banking facilities, and degree of familiarity with advances in Internet security methods and other reassuring technologies.
Given the possibility that few but the largest financial services networks operate nationwide – enough to be satisfied with getting an overall picture, at least – it stands to reason that middling and smaller banks will require primary research on their own “market basin”, the desired socioeconomic class, adoption rates for both online banking and credit cards in the locality and the aforementioned age cohort in order to arrive at on-target decisions.
Areas of Concern
At this stage of the market analysis and strategic planning process, one can do worse than tap industry associations for secondary data that covers consumer banking issues in greater depth. These clearinghouses can be national, regional and statewide in scope: American Association of Bank Directors (AABD), American Bankers Association (ABA), America’s Community Bankers (ACB), Bank Administration Institute (BAI), Bankers Association for Finance and Trade (BAFT), BankersOnline.com, Conference of State Bank Supervisors, Consumer Bankers Association, Council for Electronic Billing and Payment, Credit Union National Association, Dallas Area Compliance Association, Financial Managers Society, Financial Services Roundtable, Mortgage Bankers Association of America, International Financial Services Association, NACHA – The Electronic Payments Association, Risk Management Association, Society of Financial Examiners, Southern Financial Exchange, Western Independent Bankers, and the state chapters of the Independent Community Bankers of America.
Recommendation
It was methodologically possible to do this survey on the Internet. Given that the Mintel survey did not appear to ask for personal information other than age, it is certainly possible for the first generation of Americans to grow up having Internet access at home to agree to take the survey online. As well, the type of questions asked accommodates “Yes”/”No” radio buttons and dropdown checklists, a familiar sight for the youth that are used to registering in social networking and brand promotion sites. On the other hand, there are representative sampling issues with online surveys.
Conclusion
Many of the findings cited in the case beg the question of how the penetration and attitude ratings for young Americans differ from those of other age groups. Three other classes of market research information could help complete the picture and assess what strategies might be followed for making the most of the opportunities and minimizing the difficulties of youth depositor marketing. These are, very broadly, benchmarking data, motivational studies, and minority markets analyses.
Works Cited
McDaniel, Carl Jr., and Roger Gates, Marketing Research with SPSS. (8th Ed.) Hoboken, NJ: John Wiley & Sons, 2010.