There will be many dramatic demographic shifts over the next decade. In fact, we’ve already seen huge shifts in population vectors over the last few years, with a growing (and increasingly relevant) Millennial population, squeezed Gen-Xers, and a large Boomer/Senior market facing challenges other retirees never had to face.
Reaching each segment of the population will require understanding and skill. You may only focus on Boomer/Seniors for retirement planning services; however in ten years you will be dealing with digitally savvy Gen-Xers. You may feel that Millennials aren’t worth the chase, but in short time they will present a huge opportunity.
A truly successful agent or advisor will need to be able to sashay between the generations, which means having a good grasp of the issues each segment faces and marketing in a manner that best reaches them. We’ve already discussed in detail what will impact boomers in the next year.
Who Are They?
Generation X is generally considered to be individuals born between 1965 and 1981, although other demarcations may be used. What that means, however, is that some Gen-Xers are turning 50. Yes, the generation that saw the rise of MTV, hip-hop, and heavy metal, is now AARP eligible.
So how do Gen-Xers feel about retirement? Generally, they are pessimistic. Gen-Xers were the hardest hit by the Great Recession, losing nearly half of their wealth. They have less money saved for retirement, and the amounts they do have is not enough. Gen-Xers have a high lack of confidence when it comes to retirement, with 42% of respondents in an Insured Retirement Institute survey stating they feel they won’t have enough retirement funds to live comfortably.
Gen-Xers are also getting squeezed by Boomers and Millennials, both of which are larger in size than their generation. In many ways, the longer life expectancy of their parent’s generation is hurting Generation X. Throw in their adult Millennial children with limited earning power, and you can see how the former x-treme generation is facing a great deal of financial pressure.
This is not to say that Gen-Xers don’t have assets or good retirement planning instincts. A recent PNC survey found indications that many Gen-Xers have overcome some of the challenges associated with the Great Recession, even if they still express fears of outliving their money in retirement. However, other things like consumer debt and risk aversion continue to drag on many Gen-Xers’ ability to build a robust retirement portfolio. Time horizon may also be a factor in Gen-Xers retirement thinking; according to the PNC survey, this generation expects to retire at the average age of 63.6, more than two years earlier than Boomers.
In short, we have a generation that:
- is squeezed by other generations
- took a critical hit just as they were reaching their peak earning power
- may have significant consumer debt
- may have more familial obligations
- may have unrealistic time horizons for retirement
- is worried about outliving their money
- is taking steps to save for retirement
- has some investable assets
How to Reach Gen Xers
Although Gen-Xers face challenges from many financial angles, they still have time to make up for retirement saving deficits. With a mix of assets and earning power, it is possible for a troubled Gen-Xer to have a retirement plan that, while perhaps not wholly ideal, is robust.
One problem is that they may be too suspicious of financial advisors. A 2014 report from the Insured Retirement Institute found that 77% of Gen-Xers are not consulting with a financial advisor. Yet the same report found that only a third of Gen-Xers rate themselves as highly knowledgeable on financial matters.
Reaching Generation X
According to the Allianz Generations Apart Study, 64% of Gen-Xers would consult with a financial professional “who’s empathetic and nonjudgmental.” The same study suggests that there are some contradictory feelings about retirement within Generation X: 72% are unable to pin down their retirement expenses, while 55% envision retirement as being relaxed and easy. So there is a real need for practical solutions, yet Gen-Xers are clouded by their own confusing ideas of retirement.
Vanderbilt suggests being transparent and straightforward with Gen-Xers, which is certainly good advice for any business, but especially important with this segment of the population. The more studies you read about Generation X and their financial concerns, the more you get a sense of a group a people gun-shy and battered by the economic storms they’ve had to weather. It makes sense that this generation would be confused and protective of their money, even at the detriment to their asset building potential.
Marketing and Media
While Gen-Xers are very active online, their usage, segmented by digital platforms and devices, often falls between Millennials and Boomers.
While Gen-Xers use many different devices to access information, they prefer laptops for “high-attention/high complexity” tasks.
According to a study by Fractl and BuzzStream, the top five most consumed content types for Generation X are in order:
- Blog Articles
- Case Studies
While the most favored type of content for all generations is entertainment, when compared to the Boomers and Millennials, Generation X is the segment that most prefers content on personal finance.
Generation X uses Facebook and Twitter more to share content, when compared with other platforms, according to the study by Fractl and BuzzStream.
Smart Hustle suggests avoiding hard sales pitches and a blended marketing (traditional and digital) approach when trying to reach Generation X.
- 8% of heads of households age 35-44 respond to direct mail
- 1% of those in the 45-54 age group respond (most likely to respond)
Since Gen Xers are skeptical of financial advisors, you should consider a drip campaign to successfully bring a lead to appointment or conversion. Provide clear solutions with no hard sales pitches. Create blogs, eBooks, and case studies that speak to Generation X concerns. While this generation is engages digitally, it is also receptive to direct mail, so do ignore direct mail as a marketing platform.
It’s important to remember that within every population segment, there will be variation. Not every marketing approach will work, which is why it’s crucial to have an adaptive marketing strategy, even with target market segments. However, Gen-Xers, broadly speaking, are very concerned about their retirement prospects. They need financial advisors, whether they know it or not.