Think Needs When Targeting Aging Boomers
If you type the word “boomer” into an Internet search engine, youll soon be viewing hundreds of Web site listings for and about “seniors.”
Thats telling evidence of a compelling sales dynamic: Once the darlings of youth marketers from the 1960s through the 1980s, baby boomers are now prime territory for senior marketers.
For financial specialists, that raises an important question: How best to serve boomer-turning-senior clients?
This is the first of several articles that National Underwriter will publish this year on that topic. Today, well look at concepts for producers to consider. Future articles will cover approaches recommended by boomer researchers and insurers.
All told, baby boomers represent a huge financial field for marketers to plow. Born between 1946 and 1964, they number some 76 million in the United States alone.
On the economic side of things, they stand to receive an estimated $9 trillion to $13 trillion in inheritances; and, when they retire, many will receive huge sums from their own 401(k)s, IRAs, and other qualified retirement plans. Further, many are said to have expensive lifestyles–whether it be for homes, college educations, cars, adventure, travel, technology, divorce, or even health (to enhance the longevity they expect to have).
Its their financial needs now, and when they inherit and retire, that makes this huge demographic group so important to marketers. But how to reach them?
Producers are unanimous on one point: Younger boomers–those currently aged 38 to 45–present a greater marketing challenge than do older boomers–primarily because younger boomers tend to have less money to spend on higher-end financial products.
To get around this hurdle, Neil Frankle, focuses on younger boomers who are affluent.
“My target market is highly paid employees, in their 30s and 40s, who have stock options,” says Frankle, who is president of Wealth Resources Group in Woodland Hills, Calif. “Many are employees of large corporations. They have money and know they should do something with it, but they dont know how to harness it.”
Frankles strategy is to become familiar with the needs, wants, and desires of this target market. “Listen, ask the right questions, find out whats important to them, and provide what they need.”
When he does a good job for the first person at a company, he says he starts getting referrals.
For many such clients, Frankle sets up managed money accounts–mostly mutual funds and some stocks.
What about annuities? He doesnt use many. “These are young people,” he explains. “They dont want to lock up their money for 20 or more years–they dont know what will happen in their lives, or with taxes, or with the insurance companies.”
How about life insurance? “Ive used it some, but I plan to expand on that.”
What about younger boomers who want to save but who currently have little money for extras? Unless they can help him penetrate his chosen market, he prefers not to take them on as clients.
This is a matter of economics, Frankle says. “How could I survive if my clients are putting only $100 a month into a mutual fund or an annuity?”
Some producers can make a good living by selling financial products to younger mid-market boomers in a worksite sales setting, contends Alan Barthelman, president of AB & Associates, a worksite marketing firm in Cape Elizabeth, Mass.
However, “they need to be aware that they will be dealing with less sophisticated products,” he says. They also need to be aware that worksite sales requires dealing with various “organizational processes”–setting up enrollment meetings, arranging one-on-ones at the workplace, facilitating setup of the payroll deduction system, etc.