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Effective Financial Education Starts With Getting Inside Consumers’ Minds

How to Effectively Message to Financial Institutions

Sarah. Cooke, Tuesday, April 30

 

April was Financial Literacy Month, and many community financial institutions have been using it to promote their financial literacy efforts with consumers. Some are hosting financial reality fairs, while others are posting and promoting educational information or offering workshops on everything from saving for college to effectively managing debt.

Community banks and credit unions are perfect to speak to these issues because of the expertise they possess and the trust they’ve built with their customers and members. Some consumers are looking for help in better managing their retirement savings. Others may have found themselves in a tight jam that they know they need to get out of and don’t know how, but they’re also embarrassed to seek out help. Building trust with your customers and members will make it easier for them to reach out to you for guidance.

I recently sat down The Brainy Business Founder Melina Palmer to discuss how the brain takes the messages and input they’re provided to help banks and credit unions determine the best way to position and share financial education offerings and service. Even the term ‘financial literacy’ seems condescending, particularly on this sensitive issue, because no one wants to admit to being ‘illiterate.’ Really, it’s about the journey, and listening to their journey is a critical piece.

 

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Melina Palmer, Founder of "The Brainy Business"
Watch the video interview with Melina Palmer

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“People feel that they're unique and different. They can talk about why the situation warranted, we justify all the reasons why we make the decisions we do, and we're wired this way. So, there's a need to be able to listen to what their issue is, why they're saying they're doing that, and ask some open-ended questions,” Melina advised, “You're needing them to come to a conclusion themselves. You can't force someone to shift.

“Our brains are also wired to kind of revert back to what we've always told ourselves, even if we have information that tells us otherwise. So, if someone has been told for a very long time that they're bad with money, or they think they're bad with money, that mindset is in there all the time. Even if somebody says no, no, you can do this, you can you can make it. It's not just a one-time thing. It's very much the walking down the path with them and finding a partner and letting them know it's okay. If they slip up, you know, it's very much in that partnership vibe is the way I think to get out of condescension.”

Melina also recommended sharing testimonials in your marketing to help overcome this. “The brain loves stories, we love to hear that hero's journey over and over again,” she explained. “Being able to relate to people that have been through this situation, and whether it's the counselor or it's someone they've worked with, it can just really make a difference. And, you have to walk the walk, too. You can't just say, ‘We're here for you,’ and then we never pick up the phone.”

Ser Tech is hosting a webcast, Challenging the Sacred Cows of Auto Lending, with Melina and our business partner, Open Lending, May 9. Click here to register!

But community financial institutions have to be cautious about unintentionally normalizing bad financial habits. “Something like 76% of Americans don't have enough to cover a $500 emergency, you know, something along those lines. That's the message we see all over the place. The problem is, you are doing something which I call unintentional normalizing. And the example of this would be if you went to college, and its first day of school, and the professor says to everyone in the classroom, 86% of people try to cheat and plagiarize. But we're keeping an eye out for it. You may never have been intending to, but then you're in a particularly difficult test. And you remember that 86% of people cheat, and there's still a lot of people here in this room. So, I can probably go ahead and take advantage of that. Right?

“With budgeting, when you tell people this big number of people that are doing bad, it makes it sound like you don't really have to do anything, because you're just like everybody else. We're herding species by nature. So, what you actually would want to message on is find some other normalcy that you want to be communicating – something like 100% of people who have budgets are happier.

“This is where you can use things like testimonials of people that have come through on the other side and you’re triggering mirror neurons to help somebody relate to the state that they want to be getting to and not showing those averages as scare tactic, because it doesn't work the way we think it should.”

We’ll have more financial education tips with Melina in the coming weeks, so stay tuned! And if you’re interested in seeing how Ser Tech can help provide credit education for your members, contact us today!