Can We Trust The Trust Numbers?

Each year, there seems to be no shortage of well-publicized surveys showing how much trust consumers have in banks, and how that trust has changed since the previous survey. What is it about the banking industry that makes bankers obsess over whether or not their customers trust them? You’d think that brain surgeons would be as concerned with their patients’ level of trust in them, but noooo.

A recent Harris poll (as reported in The Financial Brand) found that:

“Local credit unions and local/community banks are the most trusted institutions, with over three-quarters of Americans having some or a great deal of trust in them. Big national banks rank second to last, having the trust of only 50% of Americans….while 42% state they have no trust at all or very little trust in these institutions. Online-only banks are seen as the least trustworthy, with only 39% of Americans having at least some trust and 47% having no or very little trust in them.”


With these data points in hand, credit unions go into full-on Sally Field mode: “They like us! They really like us!”

A lot of good it does, though. According the BusinessWeek’s estimates, the top 3 banks in the country have 33% market share, with the top 10 banks holding nearly 50%. And those market shares appear to have grown over the past few years. Despite low levels of consumer trust.

One community bank CMO used the trust data to support his contention, in an editorial in American Banker, that community banks and credit unions should go “negative” against big banks in marketing campaigns. Like community banks and credit unions haven’t already been doing that for the past five years, and to practically no avail.

Here’s what I have trouble reconciling: On one hand (as reported by Harris), credit unions are the most trusted financial institutions. On the other hand, it would be appear to be common knowledge that credit unions are the industry’s “best kept secret” (you can peruse the 16.2 million results to a Google search for “credit unions best kept secret”).

How can credit unions be the most trusted if nobody knows about them?


Harris also found that online-only banks are the least trustworthy. REALLY? How would consumers know that? What percentage of the population has actually done business with an online-only bank? (I don’t know. It’s a serious question).

I can’t imagine that it’s a particular large percentage. Yet some researcher thinks it’s OK to ask consumers about their trust in something those consumers have no experience with, and to publish the results as if it were gospel.

Interestingly, a day or so after publishing the results of the Harris trust survey, Jim Marous published a piece in The Financial Brand titled Is It Time For Digital-Only Banking? citing a Javelin Research study which found that “71% of those who use mobile banking say that online and mobile banking is sufficient for their needs.”

Marous is asking a great question, and I don’t dispute Javelin’s findings in any way. But how do you reconcile that with Harris’ findings that consumers have little (or no) trust in online-only banks?


According to the Harris poll, half of US adults say their trust in banks has declined over the past few years.

Edelman would beg to differ. Or, at least, they could beg to differ.

According to Edelman’s trust survey, which they conduct annually, 38% of Americans trusted banks in 2009. In 2014, that percentage increased to 46%. By the way, as a point of comparison, 48% of Americans’ said they trusted “businesses in general,” so the level of trust in banks isn’t too far out of line.

So, is trust in banks increasing or declining? The answer is: Whatever you want it to be.


I might not be comparing apples to apples with the Harris and Edelman studies.

Harris appears to capture the “change in a consumer’s level of trust” while Edelman is reporting the change in the “overall percentage of consumers” that trust banks. It’s conceivable that there are a lot of people who a few years ago said they had “very little” trust in banks, and today said they have “no” trust, which, of course, would be a declining level of trust.

This raises questions I don’t hear a lot of people asking: What does it really mean to have a “great deal,” “some,” “very little,” and “no” level of trust?  Is your definition of “great deal” of trust the same as mine? Is trust a “bucket” which we can accurately measure how filled it is?


Bottom line: If the trust survey data tell a story that supports your financial institution, please don’t let my comments–or any modicum of common sense–get in your way of using the data to your advantage. That’s what quantipulation is all about!

But please don’t deceive yourself into thinking that the findings from these studies have any correlation to who consumers bank with, or how they make their decisions about who to do business with.



The Non-Banks People Want To Bank With (Or Do They?)

Every once in a while, a consumer study is released whose findings are…well, let’s just say “hard to believe.” One of those studies crossed my desk this week.

A survey of 3,800 Americans and Canadians revealed that 50% of respondents said that they would be likely to bank with Square if the company offered banking services.

20141022 AccentureMy take: No way (or there are a helluva lot of Canadians willing to bank with non-banks).


In a comScore study done about two years ago (November 2012), just 8% of consumers studied said they had heard of Square Wallet (which, granted is not the same as knowing about the company), and just 2% had used it.

In a Q2 2013 study conducted by Aite Group, consumers were asked how well they thought various companies would do at providing mobile shopping features and capabilities (including data privacy, data security, relevance of offers, quality of payment advice, and overall experience). Regarding Square, roughly eight of ten respondents said they didn’t know how Square would do on each of these features. Of those that did have an opinion, about a quarter thought Square would not do a good job at providing these capabilities.

So, as of two years ago, few consumers had heard of Square, and, more recently, the vast majority of consumers had no idea how well Square would do at providing mobile shopping services. But 50% of consumers would be likely to bank with Square if it offered banking services?  Yeah, right.


The 41% number associated with PayPal seems suspect, as well.

A Bloomberg article titled The Kids Aren’t Into PayPal as Apple Rules Mobile reported:

“If you’re below 30, PayPal’s not relevant,” Gene Munster, an analyst at Piper Jaffray Cos., said in an interview. While PayPal may be a go-to for secure eCommerce transactions online, Davis Meiering, an undergraduate student at NYU, said it’s not what he turns to on his phone, whether it’s for payments between friends or in stores. “I don’t use the PayPal app on my phone,” Meiering, 20, said. Arielle Gurin, a 22-year-old student at the University of Maryland, says PayPal is “outdated already.” “I know you have to have it for like EBay, or you can use it for Amazon,” she said. “But I feel like it’s not big anymore.”

But 41% of North Americans would be “likely” to bank with PayPal if it offered banking services? Yeah, right.


It seems like everywhere I turn, pundits are warning banks that non-banks–in particular, “technology” companies like Apple, Google, and Amazon–are going to get into banking and steal business away. Rarely do we hear, however, about the threat from firms like Costco, who garnered as many mentions as Apple and Google, and slightly more than Amazon (who I’ve always considered to be the bigger threat).


Perhaps most amazing to me is that nearly one in five Americans said that they would be likely to bank with Verizon Wireless (at least, according to the Accenture study). The only thing I can conclude from that is that one in five Americans suffer from severe brain damage. VZW is the most incompetent company on this planet.


The study would seem to be good news for the US Postal Service, who was mentioned by one in five Americans as a provider they’d be likely to bank if it offered banking services (which has been proposed). The USPS can’t run its core business profitably, so getting into banking would be a brilliant move (I’m hoping you smell the sarcasm emanating from the screen).


For as long as I’ve been doing consumer research in financial services, consumers (younger ones, in particular) have always said that they would consider, or even be likely to use, non-bank providers for their banking needs. Fifteen years ago, it was Microsoft and Sony at the top of the list, today it’s Square and PayPal. Nearly any company that is highly-regarded by its customers will be seen by those customers as possible candidates to provide products and services that aren’t part of the company’s core set of services.

So why don’t these surveys ask “how likely are you to buy a car from Costco if they made or sold cars?” or “how likely are you to get a smartphone from PayPal if it made one?” The inference, when asking “how likely are you to bank with ___ if they offered banking services?”, is that it’s somehow easy for all these non-bank companies to get into banking, or likely that they’ll do so.

But if so many people are seemingly willing to bank with non-banks, why don’t Simple and GoBank have millions of customers already? And if so few Amazon customers are getting a smartphone from Amazon, why would a quarter of all Americans be so willing to bank with the company?

Bottom line: People will tell market researchers anything. When you put a laundry list of companies in front of people, and ask hypothetical questions with no boundaries or constraints, the results won’t be very reliable.

What if the researchers asked: If CostCo were to offer banking services, at the same or higher cost as what existing banks charge today, how likely would you be to bank with CostCo? Do you think nearly three in 10 North Americans would have said “likely” or “very likely”? Maybe they would have, I don’t know.

I imagine that the purpose of these studies is to strike fear into the heart of bankers that someone not on their radar is going to steal their business, and….and do what? Employ the consultants and tech vendors who do these studies to develop strategies and deploy new technologies?

If that strategy works, then I hope blog posts like this don’t stop anyone from publishing studies about the non-bank threat. But I do hope posts like this get you to think a little more critically about the results getting published.

Dissecting The So-Called Rise In Bank Branch Popularity

The American Bankers Association released the findings of its 2014 survey of 1,000 US consumers regarding bank channel preferences. A article titled Mobile’s Impact on Bank Branches reported that:

“21% of those polled selected the branch as their most preferred banking method, up from 18% in 2013. The Internet was favored by 31%, but that’s down sharply from the 39% who preferred it last year. ATM’s are also up in popularity, rising to 14% from 11% in 2013. Mobile banking is up to 10% from 8% a year ago. “

The article quotes an ABA SVP who said, when asked why branches are getting more popular:

“When people are conducting a complex transaction…they often prefer to do it in person. We’re seeing a branch renaissance in a some areas, with many banks transforming their branches to become more efficient and customer-friendly.”

My take: The title of the article is wacky, and the ABA explanation is incorrect. Something else is going on here.


The title is very puzzling. How did they conclude that a 2% rise in mobile channel popularity was the cause of a 3% bump in branch preference? That doesn’t make any sense.

The ABA SVP’s comment doesn’t hold water, either. It’s not all-of-a-sudden that people are making complex transactions (the SVP cites opening an account or applying for a home or business loan as examples), and now prefer to do them in branches.

The percentage of consumers who open a new checking account or apply for a home loan is still a minority of all consumers, so the minority shouldn’t be moving the needle that much. And even if those consumers did prefer a branch to apply for those products, when asked “what is your most preferred banking method?,” they should be thinking about their broader set of banking transactions when answering the survey question.

Side note to ABA: I might be wrong, but I find it hard to believe that consumers who applied for a business loan are impacting consumers’ channel preferences.


The second part of the ABA quote–“we’re seeing a branch renaissance in some areas”–might be more of an hallucination than a legit sighting. “Many banks are transforming their branches…” Really? There are certainly examples of banks creating “branch of the future” prototypes, but it seems to me that the trend isn’t so much “transformation” as it is “downsizing.”

The focus on making the branch more efficient is in response to declining volume, not a resurgence in popularity.


The real story in the ABA survey isn’t about branches or the mobile channel. It’s about the Internet.

In 15 years of being an analyst dedicated to the financial services industry, here’s what I’ve learned: Change comes slowly. Percentage shifts in consumer adoption or preferences are typically very small year over year.

Yet, the ABA survey found that the percentage of consumers who listed the Internet as their preferred banking method dropped eight percentage points from 2013 to 2014. That’s a colossal shift.

What happened between 2013 and 2014 to cause this huge drop?

You will never convince me it was a shift to branches as the preferred method, because I simply don’t see a widespread improvement in branch capabilities, and usage numbers don’t support this theory.

I would buy the theory that people were shifting their preference from the Internet to mobile, but mobile’s popularity improved by just two percentage points, and the ATM saw a bigger percentage point jump than that (really? the ATM is your preferred banking method? weirdo).


Lacking access to the raw data, I’m at a loss to explain this drop in Internet popularity. With the data, I’d  look at year-over-year changes by generation, geography, and maybe even income. I’d also look at the underlying demographics of the survey sample in both years, but I’ll give Ipsos (the firm that conducted the surveys) the benefit of the doubt that they did a good job here.

While I can’t explain the drop in preferences toward the Internet, I will stick to my guns that this is not about a resurgence in branch popularity–and that, if anything, the impact of mobile on branches is bad news for branches, not good news.

Misunderstandings About Bank Customer Rationality

Sixxtep Analytics wrote in a blog post titled Irrational banking customer (hat tip to @BankInnovation):

“One of the hard set, and many times hidden premise of customer analytics is that customers are rational. Well, they are not, and it is especially tangible in banking customer analysis. There are many underpinning data to this, yet data scientist still tend to believe that customers are making decision based on math. KYC – know your customer, and realize that majority of them are irrational.

We have done a small study with one of our client in banking, we tried to 1) segment and 2) scale the irrationality of the customers. Part of the job was to test their belief about their banking usage and reality, looking at the results, we were somewhat surprised to learn the incredible hiatus between their memories and reality: 1) Majority of the customers recalled their general ATM-usage wrong; 2) Vast majority of the customers had not even a general idea about the fees applicable to wire transfer; 3) A large part of the customers has not chosen the optimal package for them.”

My take: These assumptions, and the study’s findings, underscore the confusion that many marketers have regarding the concepts of rational/irrational and logical/emotional decision making.


First, there is no “hidden premise of customer analytics is that customers are rational.” In fact, the overt premise is that observable factors–like past behaviors, demographic factors, and stated attitudes–can predict future behavior. It has nothing to do with rationality or irrationality.

Second, Sixxtep’s study may confirm the fact that consumers have poor recall, but it doesn’t confirm that consumers’ decision making is irrational. Inability to remember specific ATM usage, and the lack of knowledge regarding wire transfer fees can be the result of many factors, many of which have nothing to do with rational/irrational decision-making.

The purported fact that a majority of customers don’t choose the optimal package for them may be the result of poor information being provided in the decision making process, pressure from sales people, or any number of factors which we (as observers) don’t realize come into play. Sixxtep is implying that consumers who don’t have the optimal package intentionally selected the un-optimal package. That’s not a good assumption.


Underlying these assumptions is confusion regarding terms like rationality, irrationality, logic, and emotion.

I think–unlike Sixxtep–that it is common among financial services marketers to believe that consumers make decisions based on emotion (just look at bank advertising on TV). The problem is that emotion is commonly thought of as being the opposite of logic, and that’s not true.

Example: Remember those old TV ads with Sally Struthers where they would show pictures of little baby seals getting clubbed? Those ads played to your emotions in order to get you contribute, right? You probably felt sad, maybe even angry. That’s what they wanted you to feel. That’s what they expected you to feel. (OK, I’m lazy–sue me) defines logical as “reasonable, to be expected.” In other words, your response to the commercials–even though it was an emotional response–made it the logical response.

So logic is not the opposite of emotion.


Now let’s consider the concept of rationality, and making rational decisions. The definitions (yeah, same source) of rational include “sensible,” “having or exercising reason,” and “endowed with the faculty of reason.”

When consumers are criticized for (or accused of) being irrational in their decisions, it’s usually because a decision violates the “sensibility” of what is accepted as normal, or accepted, behavior–from the researcher’s perspective. Or a decision is considered irrational because it deviates from the norm.

Example: Although I can’t remember what my wife told me to do 26 minutes ago, I remember something that happened when we first went house-hunting 26 years ago. We drove to Norwalk, CT on a nice Saturday morning in the spring to meet a realtor. After we got to the office and made introductions, the realtor said “it was such a nice day today, I decided to wear purple!”

Was this a rational decision? Deviating from the norm does not make a decision irrational. One of the variations of the word rational is rationalize. And if a consumer can rationalize a decision, then it makes it a rational decision. The problem we researchers have in studying consumers is that we aren’t privy (often because we don’t ask good questions) to what all the factors were considered when a consumer made–or rationalized–a decision.

Going back to my example, I have no clue what experiences this woman had that led her to connect sunny days and the color purple. But if she did have reasons, then the decision was rational to her. Who are you (or me) to say someone’s decision is irrational without having all the facts?


The decisions that customers make regarding what bank (or any other type of business) to do business with can be both emotional and logical. And trying to categorize those decisions as rational or irrational is fraught with problems.

What we (as marketers) need to do is reorient our thinking about the factors that influence bank customers’ decisions towards two categories of factors: quantitative and qualitative.

Factors like rates and fees are quantitative. Factors like service quality and branch location are qualitative factors.

Any one consumer’s decision about who to bank with comes down to some combination of quantitative and qualitative factors.

Not necessarily one or the other (although it could be, but unlikely to be).


But it’s not that easy. After all, if service quality can be measured and scored, then it could be quantitative, right? Isn’t that customer satisfaction scores imply? When a company advertises that it has 97% customer satisfaction, it’s trying to quantify its service quality, and turn a qualitative factor into a quantitative factor.

Is that a smart move? Are prospects swayed by those numbers, or do they need to experience a qualitative factor like service for themselves?

Marketers also tend to ignore other qualitative factors that influence consumers, like risk and importance of the decision. Your credit union might have the best rates in town, the best service (how ever you may define it), and convenient branch locations. Then why don’t you have 100% market share?

For sure, there will be some consumers who don’t know about you (that doesn’t make you the “best kept secret” in town, it makes you the worse marketer). But that won’t account for all of the market share you don’t have.

Some consumers will perceive there to be a risk in doing business with you. Maybe their parents always did business with a particular bank, and were perfectly happy with that bank, so they do business with the bank.

Or maybe they’re not willing to give you their business because the choice of what FI to do business isn’t very important to them, and, as a result, they didn’t make a very considered decision. Is that an emotional or irrational decision?


It’s all very confusing, no? On one hand, there’s one camp that just wants to simplify this down to: Consumers make emotional, not logical, decisions. Then there’s the camp that comes up with something like this:

It’s not wrong. Just unusable, and unhelpful to marketers trying to figure out what to do.


Bottom line: We throw around terms like logic, emotion, and rational too loosely. Don’t buy into the conventional wisdom.


In the never-ending quest to understand how consumers make purchase decisions, and what influences their decisions….

No, wait. That’s not right. Let me start again.

In the never-ending quest to prove that My Preferred Channel is superior to Your Preferred Channel, and to convince marketers to reallocate their budgets away from Your Preferred Channel to My Preferred Channel (ah yes, that’s much better)….a new study purports to measure US consumers’ “biggest purchase influencers.”

(Let’s ignore the fact that “biggest” is the wrong adjective to use here).

At the top of the list is “recommendations from friend/family/acquaintance,” followed by “television ads.” The third most-frequently cited source of influence–just a few percentage points behind TV ads–was “online review or recommendation from someone within your social media circle.”

According to the study’s authors:

“Social media’s impact on consumers’ buying decisions is profound. Online reviews or recommendations from someone within an individual’s social media circles are especially impactful, even when the reviewer has no relationship to the consumer.”

My take: We need to address a few issues before accepting this as gospel:

1. Degree of influence. Respondents were asked to what extent these sources of influence have on their buying decisions. Really? What does “high” and “medium” mean exactly? How does one determine the difference between “high” and “medium” influence? I’m guessing that “low”–and maybe even “no”– was on the list of prompts, as well. If so, why not include “low” in the calculation of influence? After all, if it had “some” influence, it should be included, no? If not, then why include “medium” influence in the rank ordering?

2. Extensibility across products. You’re not going to try to tell me that the “biggest” influencers are the same for all products and services, are you? So how can a researcher aggregate the sources of influence across products and services, and how can a consumer even answer the question in the first place?

3. Cross-impact of influencers. Nine of the 16 sources of influence that the study asked about were mentioned as a “high” or “medium” influencer by at least half of the respondents. Which means that for any one purchase decision that a consumer makes, a number of sources have an impact. Wouldn’t it be important to marketers to know which combination of influencers are most prevalent, and how these combinations play out?

4. Point of influence. At what point in the consumer’s decision making process does any one influencer (or combination of influencers) play a role? The study’s authors conclude that “social media’s impact on consumers’ buying decisions is profound,” but how can the researcher come to this conclusion without more knowledge of where in the decision process social media has an impact?

5. Comprehensiveness. The chart may show only the top 16 influencers from the study, but are there others? Who came up with this list? Could there be an important influencer missing? I don’t see “little voices in my head tell me what to buy” on the list, but hey, that could be an important influencer to your target market.

6. Nitpicks. How is “recommendations from friend/family/acquaintance” different from “online review or recommendation from someone within your social media circle”? Couldn’t a friend or acquaintance be part of someone’s social media circle? And did they really survey 14-year-olds? I have a daughter of about that age. I can’t imagine her answering this question about purchase influencers (I have a 19-year-old daughter, as well, whose responses to this question I’m not sure I’d trust, either, for that matter). Oh, and the 6% of people said billboards have a high impact on their purchase decisions–would love to meet those people.


Asserting that social media’s impact on consumers’ buying decision is “profound” appears to have been a foregone conclusion going into the study. Why not emphasize the impact of TV ads, which would seem to be the more non-intuitive finding? After all, isn’t it possible that recommendations from family/friends were the result of them being influenced by TV ads?

The shortcomings of this attempt to identify consumers’ purchase influencers starts with the imprecise focus on “decisions.” Exactly which decisions are we talking about?

On a regular basis, the most frequent decisions consumers make (I’m guessing here) are: 1) what to buy in the supermarket; 2) where to eat when they eat out; 3) which gas station to go to to fill up; 4) what entertainment venues (i.e., movies, etc.) to go to; and 5) what clothes to buy.

What to buy in the supermarket is actually a collection of a lot of other decisions, regarding which food and non-food items to buy, and which brands to select. It’s very hard to believe that many–if any–of those decisions are influenced by recommendations from family and friends, or social media.

Do people ask for and get recommendations for which gas station to go to? Doubt it. Is your decision to waste money at Starbucks every day the result of recommendations from family/friends, or the result of seeing TV commercials? NO!

The reality is that the vast majority of decisions we make on everyday basis is not influenced by any of the things listed in this study. The initial purchase decision for many repeat products and goods may have been, but if you’ve been eating the same brand of cereal for five years, don’t try to tell me you remember how you decided to try that cereal the first time.


Bottom line: The reality about consumers’ purchase influencers is that it’s not as simple as asking them to specify the “degree” to which something influences their purchase decisions.

Maybe The Voice Of The Customer Isn’t

Criticizing Voice of the Customer (VOC) programs is like speaking out against motherhood and apple pie. The last time I criticized VOC programs, someone left a comment chastising me for presuming that a bank could know what its customers wanted without asking them.

Well, excuse me!

But there are (at least) two problems with the “voice of the customer” that many marketers don’t take into consideration:

1. It’s not really the customer’s voice. Isn’t it amazing that every time an organization that provides credit counseling services surveys consumers, it finds that consumers have gaps in financial literacy, and are in need of credit counseling? Or that when a content management vendor surveys executives, it finds that respondents always say that managing content is a critical element to their firms’ success?

But that’s the voice of the customer!

Surveys create linguistic conventions. Constructing a survey questionnaire–the most common form of soliciting the “voice” of the customer–means making choices about what words to include and exclude in the questions and prompts. The imprecise definition of many words often cause survey respondents to come to their own conclusions about what the questions and answers mean, however.

The prompts included in survey questions may or may not reflect what respondents really think or what they’ve done. They often select a prompt because it most closely matches the answer they want to give. Given the opportunity, they might describe it differently. So it’s not truly the “voice” of the customer.

If that wasn’t bad enough, market researchers take the linguistic limitations they create, then go and misinterpret the responses. Here’s one of my favorite examples of this:

A few years ago, a client of mine–a very large bank–came to me asking for help in interpreting their customer satisfaction survey results. Apparently, customer satisfaction was high, but so was customer attrition.

It took about 30 seconds to figure out the problem. The scale on the survey was an 8-point scale. The two-lowest scores were variations on levels of dissatisfaction. The other 6-points were varying degrees of satisfaction. It’s little wonder, then, that customer satisfaction was supposedly high.

But was that really the “voice” of the customer? That’s not a rhetorical question. If you answered “no,” read on. If you answered “yes,” head on over to and enjoy the rest of your day.

2. Customers don’t always have a voice to contribute. Market researchers routinely ask consumers “what influenced you to buy this product?”  If you have the ability to retain what you read 10 seconds ago, then you know that presenting respondents with a pre-set list of prompts immediately makes it “not really the customer’s voice.”

But, often, consumers don’t really know what influences their decisions. Even when we think we know, we often lie to ourselves–as well as to researchers–about those reasons because we don’t want to appear (even to ourselves) to make decisions for the wrong reasons.

I’ll give you another example of when the “voice” of the customer will be (or should be) silent:

I was talking with some folks from a marketing agency who were exploring different ways they could survey Gen Yers to understand the life stages (i.e., triggers) that signaled financial services needs.

Here’s the dilemma: You can’t ask 24-year-olds what life events will trigger financial services needs, when they’ve never experienced those life events before.

This doesn’t seem to stop a lot of market researchers. Many surveys ask respondents about things they don’t know about or understand. Remember when we asked consumers 10 years ago about their interest in account aggregation? Or, today, when we ask consumers about their likelihood to make mobile payments, like that’s a well-understood concept?


Net Promoter Score is another example of a false claim to being the “voice” of the customer. Just because someone chooses 8, 9, or 10 on a 10-point scale in response to the question “How likely are you to refer us?” does not make them a promoter. (I love it when marketing morons refer to this group as “net promoters,” misunderstanding the concept of “net”).

You know what makes someone a promoter? Behavior, not intention. Action, not voice.

What customers say has never been as important as what they do. But we’ve never had the opportunity to know (I’m trying hard to not use the word “track”) what people have really done. So we surveyed them.

One of the big Big Data opportunities is identifying what consumers actually do, and who and what they interacted with, on their way to buying something.In the future, the “voice” of the customer won’t be as important. I don’t think it’s as cracked up as it’s made out to be today. What we really need to focus on is understanding the gap between voice and behavior. That is: Why do consumers say one thing, yet do another?

Millennial Millionaire Mularkey

Man oh man, some of you will believe anything you hear.

In an article titled Millennial millionaires just want to get rich, CNBC reported:

“A report from The Shullman Research Center, titled Millionaires Have Their Own Generation Gap, found that 23% of today’s millionaires are millennials. There are now about 5 million millennial millionaires. That’s half as many as the boomers. But it’s more than the older and more established Gen-Xers, who count only 4 million millionaires among their ranks.”

My take: No way. No freaking way.


Let me do a little of the math that too many people out there can’t seem to do. If the purported 5 million Millennials account for 23% of today’s millionaires, that means there are 21.7 million millionaires (let’s round it to 22 million since the article doesn’t report more specific numbers).

And If the purported 5 million Millennials is half the number of Boomer millionaires, that makes 10 million Boomer millionaires. The report claims that there are 4 million millionaires coming from the ranks of Gen Xers. Which means that there are 3 million millionaires from both the Silent (or Senior) generation and the one after the Millennials (which one source I found calls the iGeneration).

While this is highly unlikely to be the case, let’s assume for a moment that nobody younger than a Millennial is a  millionaire, so that the 3 million unaccounted-for millionaires comes from the ranks of the Silent generation.

What this report is claiming is the following millionaire penetration rates (number of people and number of millionaires in millions):

Generation          # of people     # of millionaires    Millionaire penetration rate 
Millennial          77.9                  5                  6.4%
Gen X               50.1                  4                  8.0%
Boomer              77.3                  10                 12.9%
Silent              40.7                  3                  7.4%

This doesn’t make sense on a number of fronts:

  • The millionaire penetration rate can’t possibly be almost as high among Millennials–who are first starting out on their wealth accumulation journey–as it is among Silent generation members who, although they are spending down their wealth, have have had 40 to 60 additional years of wealth accumulation behind them.
  • There is no way that one out of every 7.5 baby boomers is a millionaire.
  • According to an L.A. Times article, citing the Spectrem Group’s research, the number of households with net worth of $1 million or more, excluding their homes, is at a record 9.63 million.

A little Googling on the part of CNBC might have uncovered this discrepancy in the estimate of the total number of millionaires in the US. And pushing a few buttons on a calculator might have raised some questions about the allocation of millionaires.

But I don’t blame the media for this stuff. I expect them to blindly publish anything that they think will get them viewers or readers.

No, I blame people for not questioning this stuff. You’ve got to stop believing–and to stop tweeting–every number that some idiot in the media reports.