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Financial Product Use over Household Life Cycles: A Guide for Credit Unions

This is the final report in Filene’s series on life cycle marketing for credit unions. This publication compares consumer use of fifteen consumer financial products across eleven life cycle stages.

  • William Kelly Center for Credit Union Research at University of Wisconsin-Madison

Executive Summary

This publication is the fourth and final volume in a series of Filene publications on life cycle marketing for credit unions. The first three dealt with specific age groups, the young, mid age, and seniors. This publication compares the use of eleven different life cycle stages across all ages to compare their use of fifteen consumer financial products. These include ten traditional products for credit unions, five savings products and five loan products. We also examine five non-traditional products offered by many credit unions through affiliates. The latter group includes stocks, mutual funds, cash value life insurance, retirement accounts, and savings bonds.

What is the research about?

The life cycle segments we use here are based on extensive existing research in the literature on consumer marketing. We identify four stages for the young group: singles, childless couples, single parents and couples with children (full nesters). We use five stages for the mid-age group – the same four as for the young group, plus a stage called “delayed full nesters,” couples in mid age with at least one child under age six. For seniors, we identify two segments, single and married. Age ranges for young, mid aged, and seniors are 18-34, 35-64, and 65 and over.

Credit union marketers can use the results of the first three studies in this series to focus on marketing to particular age groups. The present study provides a comparison across all eleven life cycle stages. The purpose is to show which of the eleven stages are most and least productive in marketing fifteen financial products – five depository products, five investment products, and five loan products.

What are the credit union implications?

Credit union marketing resources are limited. Resources must be invested where they have the most impact. Marketing to every member in the same way is an inefficient use of resources and does not serve the membership most effectively. Efficient marketing and service to members considers the needs of different segments of the membership. We recommend using life cycle stages for this purpose. This report provides information to support credit union marketers in using a life cycle approach.