10 September 2014
If retirees are your only target market, you could be overlooking other valuable segments.
Every generation has its own lifestyle and financial habits; segmenting your database accordingly will allow you to target your messages to the needs of each group. While no two people from the one generation are the same, they share enough common traits to enable you to tailor your marketing tactics for each group.Baby boomers (now aged 49 to 68)
Encompasses retirees as well as those approaching retirement age; baby boomers constitute almost 25% of Australia’s population^. Given their age and affluence, they tend to be consumption-oriented and form a desirable market segment. As overall life spans are increasing, savings distribution and capital protection are a high priority.
Knowing what’s on this generation’s radar will give you a foot in the door as a financial adviser. For example, research by Industry Super REST* showed that nearly 74% of boomers have little idea how much money they will need to live comfortably in retirement. Make your service stand out by having answers ready to baby boomers’ most prominent questions, and make it part of your communication strategy, for example by addressing these questions on your website or in your newsletter.Generation X (now aged 35 to 49)
It has been said that “baby boomers live to work and gen-Xers work to live”. Often labelled an uncommitted or unfocused generation, gen X tends to be less loyal to brands and their employers. For them, it is more important to enjoy life and have a lifestyle that provides freedom and flexibility.
This generation might not have the established wealth of their baby boomer relatives, but their ability to earn money shouldn’t be ignored. As a financial adviser, you can assist with reducing their debt (paying off loans and mortgages, paying down credit cards) as well as actively saving for longer term goals. Many in this segment will have young or school age children, so you might for example address the challenge of funding educational expenses. Work on forming the basis of a trusting long-term relationship. After all, generation X is sometimes referred to as the biggest cynics of all the generations: their trust must be earned.Generation Y (now aged 20 to 35)
Also known as the Millennium generation, gen Y is incredibly tech-savvy, career-focused and ambitious. Their rebellious nature makes them averse to many traditional marketing techniques. Gen-Yers have a notoriously bad reputation when it comes to saving, but a report from UBS# shows that maybe they aren’t as self-indulged and frivolous as everyone seems to think: generation Y was found to be risk-averse when it comes to investing and believe that working hard puts you on the path to success.
As a financial adviser, try to talk their language and focus on what they see as important (limiting debt, living within their means, saving for the future). An added challenge is that gen Y is more likely to seek financial advice from trusted friends and family than from a professional#. So reach out to them via channels which they use, such as social media, or existing contacts – for example you could ask for a recommendation from their boomer or gen X relatives.
Tactics that have been successful for one generation may not necessarily work for another. And while a generational approach to segmenting has proven benefits, you still need to take into account your business’ vision and strengths, such as the type of services you specialise in.
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