As the boomer demographic ages, and ultimately moves towards retirement, there should be an added focus on a new marketing strategy that targets the Millennial demographic – defined as the population of people born between 1982 and the mid 2000s. Millennials are the next generation of investors; they’re well educated, were born and raised into technology, and are instantly connected with one another through services like Facebook and Snapchat. Even with all of these perks, the Millennial generation has less money to spend and is in more debt than their older counterparts (Goldman Sachs). This generation will definitely need help planning their financial stability and success in terms of managing their goals, debt, and saving.
So, why do Financial Advisors need to rethink their marketing strategies if there will be a natural demand from Millennials?
Reason 1: Millennials are the demographic that grew up in the age of rapid technological development…
Most have experienced the pain of dial-up internet, been scolded for not rewinding the videocassette, all the way to having almost any movie available at any time through streaming services. They are no strangers to waking up to a new technological marvel – they’re also the ones camping out in front of a store to get it. Millennials are also no strangers to revered technology falling off the face of the Earth. This demographic will control the future of businesses since they’re the ones that will hold the most spending power in the coming years. In the US alone, Millennials have spent 2.45 trillion in 2015, and their income will exceed boomers and converge to Generation X’s income by 2018.
According to a recent global survey, 19 out of 20 Millennials have smart phones and check them an average of 43 times a day. According to Pew Research Centre, Social Media is used by 65% of American Adults and 76% of all Internet users. Breaking it down by age, 90% of young adults (ages 18 – 29) use Social Media, with Facebook dominating the market share.
The rapid evolution and advancement of technology has also changed those who influence the Millennials. Previously, 66% of boomers trusted recommendations from their friends and family. These days, only 49% of Millennials trust recommendations according to a recent report. This could mean that there is no guarantee that the new Millennial investors will use the same Financial Advisors as their parents. They trust online customer content (reviews) over any other information. This means that having a website with feedback, Facebook page with comments, or even Google Map reviews can go a long way to attract the sceptical Millennial to your business.
Brand loyalty also extends to Social Media; Millennials like to follow their favourite brands and entertainers on one or more Social Media platforms. Due to the sharing algorithm, in many Social media Platforms, when consumers “like” or “favourite” a piece of content on a Social Media platform it will show that to some, or all, of their connections – leading to more exposure. If they really like the content, they will then “share” it to further increase the exposure. This is the way a piece of content goes viral. If these content sharers are an influencer of a Millennial, they will definitely be more inclined to trust that product or service.
Reason 2: Traditional forms of marketing won’t work with this new generation.
Millennials are not influenced by traditional advertising. Only 1% of Millennials surveyed said that a compelling advertisement would influence their decision. 62% said they would become loyal customers if a business engaged with them through Social Media. In terms of interaction with companies online, 30% of the interactions still occur on the businesses’ website, followed by 18% through email newsletters, 16% follow the business on Facebook, and 8% comment on Facebook posts. The chart below further demonstrates the way Canadians are interacting with companies online.
(Data from Canadian’s Internet Business)
Focusing on just one of these online channels leaves a gap that could leave room for your competitors to attract your prospects and clients.
Reason 3: It is imperative for any business to have a full-fledged Omni-channel online experience. (For a more in depth look at what Omni-channel is, click here.)
Since Millennials grew up with technology, they’re accustomed to many different forms of communication – as demonstrated in the graph above. They will not only check out a businesses’ website, but they will also look at their Facebook, Twitter, and LinkedIn profile, as well as Google reviews. On top of rethinking and revamping marketing strategies, offering consistent and quality messaging, information, branding, and experience on each one of these channels is imperative. Disconnects between these channels leads to questioning credibility and professionalism, and possibly even moving to a competitor.
Millennials are a tricky demographic to market to since there is more variance within the generation than any other prior. They hold all of the world’s information in their hands due to smartphones and the ability to search from anywhere, anytime. They are more connected to eachother and businesses than any other time in history. The lack of an online presence and valuable content, from a business nowadays, ultimately makes them sceptical.
The best place to start, to attract the Millennial generation, would be to go where they do their research: online (websites), and Social Media. Millennials are more likely to Google first and ask questions later. Having an effective online presence with all the information readily available leads to more success when trying to attract the Millennials. Rethinking your marketing strategy to remain active online will significantly help in attracting new clients and prospects, and ultimately, increasing your AUM.