Own your customers from cradle to pay

The Jesuits aren’t known for their business nous but a quotation that is frequently attributed to this order of Catholic priests – “give me a child until he is seven and I will give you the man” – offers some powerful motivation for companies.

Lifelong preferences, according to the Jesuits, are determined early in childhood.

Any business that is able to tap this concept and capture customers before they start spending is in a powerful position to achieve long-term growth.

Several major sporting organisations have realised the importance of children to their business models and have developed programs to attract them (see “Giving kids a sporting chance”).

But it is the big banks that have proven the most adept at the practice. Many children who open bank accounts keep them once they become income-earning adults. Then banks are able to directly market other products, including home loans.

In recent years, Commonwealth Bank, which has been handing out piggy banks for decades, has bolstered its investment in youth programs. It is halfway through a five-year, $40 million program to help make 1 million children financially literate.

Patricia Montague is CBA’s general manager for retail customers and transformation. She says the bank wants to help every child develop money skills. “Every child has some goal,” she says. “Were about helping them save for that.”

Montague is reluctant to discuss the most obvious reason the bank runs its children’s programs – to get more customers.

Marketing to children for commercial gain remains a touchy subject. Just ask Lion Nathan, which copped flak last month after water bottles branded with its beer imprint, James Boag, were handed out to children at a junior football match in Bulleen, Victoria. The company’s claim that it was an accident was buried beneath the bad headlines.

However, marketing to children isn’t of itself a bad thing, according to principal psychologist at the Quirky Kid Clinic, Kimberley O’Brien.

“It can be a positive,” she says. “Kids don’t often get that treatment.”

O’Brien says it is important for companies to make it obvious to children and their parents who is behind campaigns and why they are being targeted. There also needs to be a genuine benefit for the child.

“Something that is just about making money is not something parents and kids will buy into,” O’Brien says.

Commonwealth Bank’s ability to provide genuine benefit to children, proven over many years, is a big part of the success of its youth programs, Montague says.

The bank has the highest market share in school banking; about 40 per cent of primary schools are involved in its program. About 40 Commonwealth staff work as school liaison officers.

It also has a specialised youth marketing unit, which has helped developed its Dollarmite cartoon characters and their virtual home, Coinland – a “fun and exciting world where you can make new friends, play awesome games and learn all about money”, the blurb states.

On the Coinland website, 5- to 12-year-olds are able to earn money doing jobs for a newspaper. They can then deposit their virtual income into a bank and make withdrawals to pay for fictitious treats. Commonwealth branding is subtly placed throughout.

Montague says the advent of online technology has assisted the bank in finding new ways to reach children.

“It is fair to say we have a good connection rate to Australian students,” she says.

Big banks with big balance sheets are well-placed to pursue multi-decade growth strategies but many smaller companies could benefit from applying similar techniques, business consultant Monique Beedles says.

The reluctance of customers to switch banks is more a product of trust than of consumer apathy, Beedles says.

She says companies that plan to secure customers for life need to offer genuine benefits to the consumer that they otherwise wouldn’t be able to get.

“It needs to be done without an expectation of an immediate return,” she explains. “Taking a long-term view is appropriate, no matter the size of the company.”

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