>Claudine Oriani capped the third annual YES Summit by giving attendees their marching orders to put ideas learned at the conference into action. Oriani, chief creative officer of the Partland, Ore.-based As If Productions instructed her audience to pick no more than three to five goals. Any more would be overwhelming.

Among the points that summit speakers delivered over the previous two days and Oriani emphasized:

· Engage in dialogue, not monologue. The 18-to-30 guests who appeared at the summit make it clear that listening to the demographic is even more important than speaking to them. Gather first-hand input from interviews and panel discussions and let young adults’ insights guide your strrategies.

· Rethink marketing methods and messages. Don’t follow existing print media models or conventional. Become familiar with the current delivery channels and use them. Look for stories that resonate with the intended audience. “If rates are not the value proposition that works with this age group,” Oriani said, “stop shouting rates from the rooftop.”

· Explore the power of parental influence and peer referrals. Advertisers send 5,000 messages every day, but only two or three register with individuals. Advice from peers and parents is more believeable because it’s telling, not selling.

· Make the business case for change. Connect programs to existing strategic plans, goals, tactics. Conduct employee interviews and keep coworkers informed. Provide “talking points” for front-line staff. Repeated messaging is key.

Oriani sees credit unions facing increased competition from “person-to-person” lending. As an example, she points to Prosper, which claims, on its web site, to offer “personal loans without the big bank attitude.” Consumers in need of credit start the ball rolling by registering with Prosper and listing the desired loan amount and maximum acceptable interest rate. Interested individuals then compete for the loan, and the lowest bidder credits the borrowers bank account, from which monthly payments flow automatically. Prosper promises “No hidden fees, no pre-payment penalties, and your interest rate never changes.”

The people-to-people lending model that Prosper represents is relatively new, so the jury is still out on whether default rates on the unsecured loans are signigicant. Still, Oriani believes the innovation warrants watching.

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NCUA Vice Chairman Rodney Hood.

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Time and time again throughout the last few days, YES Summit attendees heard the importance of parents on young adults’ financial decisions – whether it be in areas such as student loans, establishing a banking relationship, savings habits, and sharing advice.

Susan Follick, Segment Marketing Director at PSCU Financial Services, says you have allies in your attempts to get through to young adults—their parents. “This generation looks to their parents for advice. Leverage the relationship your credit union has with its members who are parents of Gen Y.”

Who cares? We should – Recent high school seniors’ test scores on finances are falling from previous years. With school system’s budgets strained, credit unions have a great opportunity to step up to the plate (banks already are – see Wells Fargo’s popular Stagecoach Island as one example).

How?
Provide financial education material to engage parents – some examples:

• Giveme20.com – website to educate 12-22 year olds
• “Parents” section on website

Financial products positioned as teaching/learning tools to teach financial life lessons, such as:

• Savings programs
• Reloadable prepaid cards
• Checking accounts w/debit cards
• Online banking
• Credit cards – age appropriate

Susan shared a few related best practices in product packages from credit unions across the country (click links for details of each):

• Apple FCU – Fairfax, VA: eXtras Student Checking
• Oregon Community CU – Eugene, OR: Remarkable Checking
• Pacific Service CU – Walnut Creek, CA: FirstStep Checking
• City-County FCU – Minneapolis, MN: boom! (Budgeting Our Own Money)
• CFE Federal Credit Union – Orlando, FL: Innovators Account for ages 15 – 17 & Horizons Account 18 – 22

Susan also said via email before the summit that one of the greatest challenges credit unions face in serving 18-to-30 year olds centers on new media. Sure, you need to be familiar with what’s hot online, but you have to be there yourself. Susan wants to change the thinking within credit unions on the importance of using new media tactics to reach Gen Y. She says, you have to get “over the fear of jumping in and trying it.”

>Nothing could be more important at this time than to get out the message that credit unions are not part of the current economic problem, that credit unions are safe and sound, and credit unions are open for business, according to Rodney Hood, vice chairman of the National Credit Union Administration.

Hood spoke at CUNA’s YES Summit on Friday. He pointed out that with a national average net worth 11.16%, representing $89.6 billion in capital, “credit unions have the wherewithal to weather the storm and extend credit. I encourage credit unions with adequate capital to use it.”

Joking that it’s “never been a more exciting time to be a regulator,” Hood cited the newly chartered Realtors Federal Credit Union for members of the national realtors association as an example of the continuing strength of the credit union model. “They could have become a bank, but they chose to have a credit union for their 1.5 million realtor members,” he said.

Hood urged summit attendees to increase their marketing efforts to restore and maintain confidence in credit unions. The message should focus on educating members and the public about:

· The expansion of insurance coverage of their credit union savings,
· The overall strength of the movement, and
· The continued availability of credit.

Hood also spoke to the summit audience about Blueprint 2020, NCUA’s initiative, announced in June 2007, to encourage strategic partnerships between credit unions and universities and trade schools to provide internship opportunities for young adults. Students would receive income, academic credit, and the opportunity for permanent employment. In the process, the interns will help sponsoring credit unions attract not only the next generation of members but also the next generation of leaders.

“We have strong credit union leaders and wonderful boards,” said Hood. But he recently met a man who has served on his board for 65 years. Hood said he was grateful for his service, but believed that unless credit union recruit young leaders, they will become stagnant, and miss essential new ideas.

Hood expects the Blueprint 2020 task force, listed in the Blueprint, to set benchmarks for the initiative in the future. To make it possible for low-income credit unions to participate in the enterprise, NCUA provides grants of up to $3,000 for paid internships.

IMHO: What we call the “next generation” cannot be limited to 18-to-30s. In reality, credit unions would not be struggling as hard to pursue young adults’ business today, if they’d captured that business 17 to 29 years earlier, when there was no competition for the target group’s hearts and minds. To be successful in the long-term, credit unions must augment their young adult strategies with aggressive youth programs. Otherwise, they will be doomed to a perpetual and increasingly more expensive campaign in pursuit of the elusive 18-to-30 market, locked in battle with big-bank competitors with a lot more marketing dollars to spend.

>Kelly is married with three children and works as a paralegal. My job is very secure, but my husband works in construction. We don’t have credit card debt, just a mortgage, which we’re three months behind on. We want to pay, but we can’t cover everything. We called the bank and told them: It’s either something or nothing.”

>Cassandra is single and works for an insurance company. “The more money I have in the bank, the more I spend. I try to save, but I keep dipping into it. There’s always an emergency, like buying new tires. Financially I’m OK, but I don’t have many options. I have two credit cards. They don’t have high limits, but they have high rates. I’m making minimum payments, but the interest rates are so high that I can’t make progress.

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Matthew, age 22, single.

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Jena, age 23, single, one child.

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Thursday afternoon’s session gave attendees the chance to get to know a wide cross-section of 18-to-30s recruited from the Tampa area. Twenty-eight visitors spent an hour answering questions about their personal finances, spending and saving behaviors, and financial goals. Attendees then had one hour to devise a program or product that they thought would appeal to and meet the young adults’ needs. Finally five of the most outspoken recruits returned to hear attendees proposals and evaluate them.

Phillip Crocker, director of financial literacy for Resource One Credit Union in Dallas, presented a proposal from his table for an auto loan with a repayment plan that included an extra $25 per month, which would be diverted to a high-interest savings account. The principal and interest would revert to borrowers when their loans were repaid.

The panel was lukewarm to the proposal. Two expressed a strong preference for a lower payment in lieu of the forced savings. One suggested that the savings balance should be available if the alternative were defaulting on the loan.

IMHO: Generalizing about 18-to-30s will doom your programs to failure. You have to float proposals with real, representative people, because you’ll never be able to respond to objections that you couldn’t antipicate otherwise.