The Generation Wave: Age Appropriate

When you look at your credit union’s membership in terms of age and other demographic characteristics, do you also take the time to think about the overall demographics of the market you serve? What about the demography of the US as a whole?  Or in more common sense terms: when you look at the number of members you have in a certain age range, are you basing your expectations on a comparison to how many people total there are in that generational age range? 

 If you are like most businesses (not just credit unions – businesses in general), the answer is probably “no.”  After all, your yardstick for comparison is probably your own past performance.  And that’s a good yardstick for a lot of things, but in this case it doesn’t give you the full generational picture.  That’s because not all generations are equal in size.  This sounds like common sense, but believe me – most of us don’t take the generation wave into consideration that often.  We really should, because knowing how large the pool of prospects is within each generation can really help shape products, delivery channels, and marketing efforts for your credit union.

If you look at the number of people within each generation, it looks more like a wavy line than a flat line. There are some generations that are small and others that are large, and the generational pattern tends to alternate between small and large.  Makes sense, right?  If you think of a “generation” as a twenty year timeframe, a parent generation and its offspring generation will have a gap between them.  For instance, the Greatest Generation (also known as the GI Generation) was born between approximately 1901 and 1925.  Their post-WWII enthusiasm for one another spawned the Baby Boomer Generation, whose members were born between approximately 1945 and 1965.  The Boomer Generation is a very large generation, and in turn they have produced an enormous number of offspring known as Generation Y (children born between 1985-2005).  In between, you have two smaller generations: the Silent Generation, born between the GI’s and the Boomers (1925-1945), and their children the Generation X’ers, who were mostly born between 1965 and 1985.  Granted, dividing these generational groups up and identifying parentage is not an exact science – but it still serves as a good proxy if you look at the big picture.

So, now we have this wavy population line.  This gives you some perspective for how many prospects are available to your credit union in each group.  The Boomer Generation is currently the largest and most profitable generation (we’ll talk more about that later!). Generation X has about 9 million fewer members than the Boomer Generation, so they will never be as large or profitable as the Boomer Generation simply because there are not as many Generation X’ers out there.  On a per capita level they are a profitable and viable generational group – they just happen to be a small generational group.  Generation Y is the next big group, poised to surpass the Boomer Generation in number and buying power as they mature.
Stay tuned as we talk more about these different demographic groups and how understanding them can help your credit union!

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