Millennials are the largest living generation today, and control some $200 billion in annual American spending power.
Although many of these young adults are burdened by student loans and underemployment, their buying power will only continue to increase as they inherit businesses, estates and jobs from retiring baby boomers. They are also considered to be a “saving generation,” and are already planning for retirement.
If you’re not already invested in building relationships with millennials, maybe it’s time to ask yourself, why not?
Many of today’s insurance and finance professionals are themselves millennials or have worked closely with them. We turned to them for some insight on this generation’s behavior, values and buying trends.
No. 1: Older millennials make better leads than young millennials.
While most articles refer to them as a single group of people, millennials span a wide age range: 17 to 35. It’s therefore more useful to think of them in sub-categories, especially when it comes to offering products and services.
In its 14th annual US Employee Benefits Trends Study published in 2016, MetLife divided millennials into two groups: younger and older millennials. The key aspects we noted from the study are:
- Older millennials are likely to be a better target market for life insurance products as they are moving into the “married-mortgage-kids” part of life.
- Younger millennials are still in college years or just starting their first jobs. This doesn’t mean they should be ignored but are likely to be a better target for educational information and roadmaps.
No. 2: Millennials care about quality of life more than owning assets.
When you talk with people in their 20s and 30s or read studies about their attitudes, they often prioritize quality of life and experiences.
It’s not that they don’t care about money and things. They are just more interested in the experiences that money can buy them rather than collecting material goods. Instead of saving up to put a down payment on a house, they may choose to spend more to live in a bustling, exciting city. This ideology has labeled them as the “renter generation” who are as happy renting homes and cars as owning them, as evidenced by the rise of Airbnb and Uber.
When discussing the value of the life insurance products you offer, try explaining in terms of how the products can impact an individual’s ability to have the experiences and quality of life they want. Provide a clear roadmap of how these products can help them achieve their goals using relevant stories as examples.
See also: What millennials want from work and life
Millennials have grown up in an “on-demand” world driven by technology. (Photo: iStock)
No. 3: Millennials want to be contacted digitally.
Today’s young adults juggle multiple commitments to several jobs, family, friends, side hustles and social lives, and they expect timely and direct responses. Texting and email are primary forms of communication, and life insurance agents may need to shift their usual communication routines to accommodate millennial preferences or bring on board younger team members who also communicate in this way.
Make it easy to sign up for life insurance. Send interactive digital materials and ensure that signups have a paperless option. If you use technology effectively to communicate with millennials, you will stand out and increase the likelihood that they will refer you to their peers.
No. 4: Millennials ARE thinking about retirement.
While millennials may still be struggling with debt and soaring rent costs, it’s not stopping them from saving for retirement. In a Vanguard Research study which compared 18-35 year old adults a decade ago, millennials participate in voluntary 401k enrollment about 10 percent more often. Things get especially interesting when looking at auto-enrollment numbers through employers; in 2014, auto-enrollment numbers skyrocketed to 87% participating.
When employers make it easier for millennials to participate in a 401(k) program through auto-enrollment, they are much more likely to start contributing early. Rather than relying on the shaky future of Social Security, millennials are diversifying their portfolios and savings accounts to reflect their technological and lifestyle preferences.
Since millennials are already planning for retirement don’t overlook them as a viable target market but be sure to consider the tips we shared in the first three secrets.
Editor’s Note: This blog post was co-written by Rick Stevens, and first appeared in the InforcePro blog.
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