Donât Overlook Gen Yâs Online Enthusiasm
Ms. Zakett is vice president of sales at Western Union Payment Services. She works with mortgaging servicing organizations to establish effective payment strategies to meet their needs in today’s challenging economy.
While the majority of consumers pay their bills through a variety of channels and using numerous payment types, Generation Y, also referred to as millennials or the Net Generation, is the most likely segment to pay bills online.
It makes perfect sense. This connected generation grew up with technology.
They crave it, trust it and use it as their main source for information, communication, entertainment and money management. Whether it’s exchanging messages with friends, purchasing music, reading about the hot new restaurant or, of course, paying bills, Gen Y practically lives online.
Lenders must consider designing payment offerings based on generational needs. A one-size-fits-all approach is no longer valid.
You may be missing important customers by focusing only on limited demographic segments like baby boomers.
Understanding who they are, and their behaviors, is critically important because they are destined to become a vital part of your customer portfolio in the next several years. Quite simply, failing to cater to Gen Y will have negative consequences on your business.
Who are they and why are they different?
Statistics vary, but Gen Y was born in the bounds of 1976 to 2001. According to Wikipedia, if the years 1978-2000 are used, there are 76 million Gen Yers in the United States. Forrester Research determined there are three characteristics that define Gen Y socially.
1. They are continually connected.
2. They speak their own language, which is influenced by communication technologies like chat and text messaging.
3. They are heavily influenced by peers, often relying on their recommendations.
Forrester surveyed the online bill payment behavior of Gen Y and found that 27% paid one bill each month at a bank or credit union’s site. Twenty-two percent paid one bill each month at a biller’s site, and 24% paid two bills each month at a biller’s site.
When it comes to homeownership, Gen Y is forcing homebuilders to look differently at what they design, build, and sell. They are seeking high-tech convenience, walkability, green building standards and diversity. And they will become an astounding 30% of homeowners by 2015.
So, what does this mean to you? The future is now. Start planning sooner than later so that you don’t get left behind the competition.
In these uncertain economic times, the future of the mortgage industry is up against many unknowns.
Despite U.S. government bailouts to extend a lifeline, consumers and mortgage servicers alike are experiencing the impact of the downward spiral of the economy.
Consumers are facing the reality of living paycheck-to-paycheck, while mortgage servicers are trying to stay competitive.
With these added difficulties in the current mortgage climate, it’s essential to establish services with Gen Y in mind, particularly their money management needs. Innovative mortgage servicers must look to adapt billing and payment options to meet consumers’ homebuying capabilities and increase the likelihood of getting paid on time.
Get to know this unique generation by checking out social media and other websites like mint.com, Facebook and Twitter.
Pay attention to urban and inner-suburb housing trends such as green amenities, walking access, main street villages, restaurants and shops.
For it’s here that you’ll find a Gen Yer making a mortgage payment online at a cyber cafe.
Hopefully, that payment is being sent to you.
To ensure it is, begin mapping out your Gen Y payments strategy today.