Beyond Retention: Increasing Wallet Share Among 50+ Members

A previous Nook blog post, “Why the 50+ Market Could Be Credit Unions' Next Big Win”, pointed out the reasons to more actively engage members aged 50 and above:

• They represent a large proportion of existing members
• They have lots of life and money left
• They hold exceptional loyalty and trust in the credit union

Credit Cards

According to the findings of the December 2023 Transamerica Center for Retirement Studies survey, travel is the most anticipated pastime that 50+ workers envision (65%) for retirement. A tangible result of these travel goals is increased travel credit card utilization. A Q1/2024 analysis by PYMNTS showed an increase (44%) in travel-related card usage among older, high-income consumers. Credit unions can leverage the “travel bug” by promoting credit cards to older members who are planning bucket list trips.

Certificates of Deposit

As they age, 50+ members will seek less risky places to stow their retirement assets. After years of accumulating funds in stocks and other higher growth/high-risk accounts, these members are ideal candidates for CDs. Credit unions can also market CDs as a wealth transfer device. Boomer parents and grandparents can use CDs as gifts for milestone events like graduation and a child's birth.

Mortgages

While paying off a mortgage is liable to be a significant achievement for many 50+ members, others are still active in the mortgage market. According to the National Association of Realtors, Baby Boomers (ages 61-78) and Gen X (ages 46-60) make up 73% of home sellers and 63% of home buyers. Yet, due to high prices driven by low housing inventories, even older buyers armed with the sale proceeds of their former home still might not have quite enough to swing the new purchase without a mortgage. Credit unions, with their ability to offer lower interest rates than banks, can offer these 50+ buyers attractive terms in their quest to find the retirement home of their dreams.

Home Equity Loans

Even 50+ members who choose to stay in their long-time homes may be excellent prospects for loans secured by home equity. An older home may be due for a maintenance upgrade, need renovations to add accessibility features, or have an Accessory Dwelling Unit (ADU) built for family members. Credit union product options include home equity loans, home equity lines of credit (HELOCs), or home improvement loans.

Auto Loans

According to the Federal Highway Administration, people 50 and older own 47% of the cars in the U.S., and 45-57% of new car purchasers also fall into this age group.

According to Lending Tree, quoting New York Federal Reserve data, in Q4 2023, Americans 50 and older took out $20.6 billion in auto loans. This data strongly suggests that credit unions have a tremendous opportunity to offer auto financing to older members.

Deeper Engagement With 50+

 Increasing wallet share among 50+ members depends on launching credit union programs that:

• Actively engage members
• Build trust
• Create awareness

It would seem that as a first step, new product opportunities must be brought to the attention of 50+ members. However, simply raising awareness in a vacuum risks turning people off by overselling. Consumers are bombarded daily with product and service offers from multiple channels. They have become accustomed to tuning out most marketing appeals. As a solution to this obstacle, increasing wallet share relies first on a longer-term game plan of establishing active member engagement and building trust.

An innovative way to accomplish this is by creating “niche experiences.” Niche experiences result from targeting groups of members with carefully curated lifestyle content.

Niches are sub-segments of a larger audience defined by one or a combination of dimensions like:

• Culture or language
• Demographics
• Location
• Needs & Preferences
• Occupation or avocation

Using the 50+ niche as an example, members in this sub-segment are analyzed based on their interests, values, and beliefs to identify the content areas in which they engage the most. These might include subjects like:

• Food
• Travel
• Health and fitness
• Fashion and beauty
• Personal finance

Note that financial content is only one of several topics. Niche experiences are created within a larger context of a member’s life in which finances are important but not the only interest area.

Two benefits arise from this approach.

First, the value-added service of rich educational and entertaining content creates a positive “experience” that boosts the credit union member's goodwill. The content’s breadth conveys a sense of appreciating the member as a person with multiple dimensions. The intended effect is to create a sense within the member that the credit union “gets me,” thereby driving a more profound feeling of trust and loyalty.

Second, the positive member experience and engagement resulting from the first benefit sets the stage for building awareness. Members who trust the credit union feel more open to learning more about the organization’s products and respond more favorably to strategically placed calls to action. This overall process can be described as “selling without selling,” which leads directly to members being more inclined to purchase additional credit union products.

Increasing wallet share across that credit union’s membership is a worthy goal. However, the opportunities for this abound in the 50+ demographic. With the application of methods like “niche experiences,” credit unions will find it much easier to reach not only their retention goals but their revenue growth targets as well.