If you want to know how to market to millennials, watch Social Finance, the online lender that calls itself SoFi. This is the company that started out refinancing student loans, but now also makes personal loans and mortgages. It just applied for a charter to operate an industrial bank in Utah, which would give it the opportunity to offer credit cards and FDIC-insured deposit accounts.
Whether SoFi is the future, I don’t know. Press has been mixed with criticism for unfulfilled intentions to go public, a string of senior executive departures, and even a former employee lawsuit over sexual harassment. Regardless, SoFi knows how to market to people in their twenties and if that is something important to you, I encourage you to visit www.SoFi.com and take a look around.
You’ll notice the company provides a sense of belonging, calling its customers “members” and offering benefits that give the term meaning. The website features numerous photos of members offering testimonials, which further promotes the notion that SoFi is a club you’ll want to join.
One of the benefits is an Unemployment Protection program. If you are a SoFi member and you lose your job through no fault of your own, you can tell SoFi and it will suspend your loan payments. Technically it puts the loan in forbearance, giving you the option to skip payments altogether or make interest-only payments. The forbearance runs in three-month increments and a member can use it for up to 12 months. For members who choose to skip payments, interest is added to the principal balance. Members can use this service for personal and student loans, but not mortgages. Most importantly, the bank requires members using the program to sign up for its Career Counseling service.
Yes, SoFi offers members career counseling, which can involve help with a job search or a career transition, or advice about “personal branding.” Many of the experts speaking at the industry meetings lately say millennials want advice; this is a way for a financial services company to offer advice exactly where young adults need it.
The company also has an interesting Entrepreneur Program, offering opportunities for personal loan borrowers and other members to find a mentor, connect with peers and even meet potential investors. I can’t help but be impressed by a company that encourages a young person with a good idea to turn it into commercial success.
SoFi may pose a competitive threat for some banks but I think it offers ideas worth contemplating – and even replicating – for most others.