In recent years, agents and insurance companies have focused their efforts on reaching boomer and senior Americans -- and with good reason. They're both huge markets whose members may need vehicles for wealth accumulation, long term care options, and even replacements for products they already own.
But while it's true that the senior and boomer generations represent great potential for the insurance industry, agents shouldn't lose sight of another critical audience -- echo boomers. These individuals -- the children of baby boomers -- are often referred to as "Generation Y," or the "millennium generation." But whichever title you apply, it's clear that with approximately 70 million of these individuals in the U.S., their size and purchasing power can rival that of the aging baby boomers. Echo boomers simply cannot and should not be ignored.
Who are echo boomers?
Ranging in age from 7 to 27 years old, echo boomers often reflect the changes in American culture that have taken place over the past 20 years. Many echo boomers were among the first to grow up around computers, the Internet, cell phones, iPods, and other technological gadgets. But while echo boomers represent great opportunity for the insurance industry, you must remember that they differ in many ways from your older clients and prospects. Understanding who echo boomers are is the first step to reaching them.
There are exceptions to every rule, but a brief overview shows that:
o They are diverse. The diversification of America over the past few decades has resulted in more demographic differentiation. Each ethnic or racial category, in turn, has specific needs that transcend their age.
o They redefine family. Many come from single-parent households and blended families.
o Many want to work. Like many other generations, echo boomers grew up in and were influenced by family members who worked.
o They tend not to be brand loyal. Brand names tend not to be as important to echo boomers as they are to other generations because echo boomers now have access to new generic or non-preferred product brands. For them, an emphasis on quality is more important than brand.
How can you reach echo boomers?
For many insurance agents, reaching older Americans, including baby boomers, is not impossible. You many have something in common with them -- lifestyles, values, or goals. This can make it easier to relate and gain trust with these clients. But echo boomers have different life perspectives, goals, and hobbies. So how can you reach this critical audience? While every situation is different, the following strategies can help:
o Explore your inner circle. Often, the best place to start looking for echo boomers is at home. By considering your contacts, your business, your children, and your clients' children, you may be better able to identify opportunities to connect with echo boomers.
o Consider multigenerational planning. Help baby boomers understand the importance of teaching their children about responsible investing. By hosting a multigenerational planning meeting, which includes your clients' children, you can establish yourself as a knowledgeable financial advisor who has the tools, resources, and products necessary for the echo boomer client's long-term financial health.
o Bolster satisfaction. Showing your appreciation for your clients' business can help bolster client satisfaction. Host a client-appreciation event and invite clients and their families to attend. Distribute educational materials to help the younger family members understand the importance of financial planning and investing, and provide your contact information for any questions they might have.
o Get personal. Building a personal relationship with your clients and their families can improve loyalty and increase referrals. Know your clients' names and birthdays, and do the same for their children. Send birthday cards and other communications to clients to ensure that they know your name, too.
o Learn their technology. Echo boomers are often tech savvy and plugged-in individuals who communicate most frequently through email, instant messaging, or text messaging. Learning to communicate in these ways can help you make initial contact, build relationships, and maintain contact.
What does the future hold?
As the echo boomers enter the workforce and begin planning for retirement, it's very important for you to understand what's important to them. In the future, echo boomers will control a large portion of America's wealth, and their impressions of investing, retirement, and inheritance will be passed down to them by their parents and grandparents. In fact, many will be the primary recipients of the more than $25 trillion inherited from parents and grandparents in the next 25 years. But for parents and grandparents, this inheritance isn't just about money -- it's also about leaving a legacy.
According to the American Legacies Study commissioned by Allianz Life Insurance Company, both echo boomers and those in the elder generation are uncomfortable discussing the one-dimensional topic of "inheritance," yet they both embrace the idea of "legacy." By framing legacy in four components, you can help families overcome discomfort and successfully plan for the future:
o Values and life lessons. Values and life lessons such as ethics and morals, faith and religion, and family traditions and stories are some of the richest gifts you can help pass on to future generations. Discuss the preservation of non-material, intangible concepts by recording them.
o Instructions and wishes to be fulfilled. Discuss ways to convey instructions and final wishes to family. By creating a will, clients can leave a positive legacy and minimize conflict with children and other family members down the road.
o Personal possessions of emotional value. Recommend that family members be candid with one other and share favorite family heirlooms and why each item means so much. Documentation of these conversations can be extremely valuable for future generations.
o Financial assets or real estate. While money is not the most important aspect of a legacy for many people, it is still crucial to understand and discuss. Real estate, in particular, can trigger strong emotional responses in the same way as other personal possessions. Suggest clients start a candid discussion to avoid conflicts in the future.
With approximately 70 million echo boomers throughout the country, it's clear this audience will have immense purchasing and decision-making power in the future. As they learn from their parents and grandparents and inherit their legacy, they'll impact the values, beliefs, and finances of the country. By understanding what's important to them, agents can unlock the potential of this hidden market segment and successfully market to echo boomers.
Jonathan Rice is divisional vice president of Questar Capital Corporation, an independent brokerage firm owned by Allianz Life. He can be reached at 651-329-9463.
