Not All Millennials Are Created Equal
As Millennials gain a foothold in the job market, investments and the economy as a whole, financial industry marketers are re-evaluating how best to reach this new generation of consumers. Their goal: to get the attention of Millennials in an age of information overload and a myriad of distractions.
Financial marketers can do this by first remembering that not all Millennials are created equal. Although analysts tend to over-generalize about this age demographic, the truth is that there are many distinct segments within this audience.
One way to break down the Millennial generation, according to a new report by Equifax, is by wealth tiers. In the report titled “A Financial Marketers Guide to Mass Affluent Millennials,” Equifax identified three unique groups of Millennials:
- Mass Market: Households with less than $100,000 in total investable assets.
- Mass Affluent: Households with $100,000 up to $1 million in investable assets.
- Affluent: Households with more than $1 million in investable assets.
Which of these wealth tiers should financial marketers most actively pursue?
According to Equifax experts at the CBA Live 2015 conference session, Looking to the Future: Emerging Affluent Millennials, Mass Affluent Millennials are most worth the investment of relationship building and marketing efforts. Compared to Mass Market Millennials, Mass Affluents have begun to accumulate wealth and generally have higher levels of income, spending and credit balances. Furthermore, Mass Affluent consumers are more likely to move into the Affluent tier than their Mass Market peers, making it in a marketer’s best interest to consider them the “emerging affluent.”
Before marketers can best reach this audience, they must first understand it better. Research from Equifax and data provided by Gfk MRI suggests that Millennials tend to be ambitious- seeking leadership positions and working hard to be the best employees they can be. Mass Affluent Millennials specifically are more likely to be future-oriented, value career jobs, are driven by material motivators, and are more likely to hold a bachelor’s or post-graduate degree.
Geographically, Millennials typically reside in large metro areas. IXI Services, a division of Equifax, compiled a list of the top 10 cities with the highest concentrations of Mass Affluent Millennials compared to the Millennial population as a whole, discovering that the San Jose/Sunnyvale/Santa Clara area has the highest level (one-third of Millennials in this area are Mass Affluents). Other cities in the top 10 include San Francisco, New York, Washington D.C., and Napa, CA.
Once the ideal target audience has been defined, the real challenge begins: determining what techniques will best grab Millennials’ attention. Although Millennials face many challenges – from student debt to waning job prospects – Mass Affluents are generally focused on their careers and are even beginning to plan their futures by weighing mortgage, investment and retirement options.
As a result, using optimistic marketing strategies tends to resonate well with them. According to Equifax research in “Straight Talk from the Next Generation of Credit Card Customers,” Mass Affluent Millennials also respond well to financial tools (such as banking apps) that are easy to access digitally. However, don’t try to use social media or online advertisements to lure Millennials – they generally separate their personal and financial online activities.
Mass Affluent Millennials are typically more attracted to added value. That means financial marketers should consider highlighting account incentives, such as rewards programs, rewards points and cash back offers for maximum impact. In fact, roughly four in 10 Millennials use their credit card(s) as often as they can in order to maximize rewards points, according to the Equifax report.
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