How can FinServ engage new generations and drive lifetime value?
New generations are less trusting of FinServ brands. How can marketers win them over and retain their loyalty throughout their financial journey?
April 27, 2021
Baby boomers may still hold the most wealth in society, but financial services brands are increasingly turning their attention to younger generations. With Millennials set to inherit trillions of pounds over the next 10 or 20 years, it won’t be long before they take over as the biggest consumers of financial products and services. Meanwhile, the upper end of Generation Z, those born between around 1997 and 2002, are also getting established in their careers and taking an interest in investing and managing their finances.
While these younger consumers might not have the same financial clout as older generations right now, their strategic value lies in the lifetime value that they represent for FinServ organisations. With a whole lifetime of financial needs and milestones ahead of them, putting the work into capturing these generations gives brands the opportunity to stay with them throughout their financial journey, with the promise of significant returns in the future.
But with more competition than ever, winning over these younger consumers isn’t easy. Research shows that millennials and gen Z are significantly less loyal than older consumers; 40% of 18 to 21-year-olds and 35% of 22 to 37-year-olds are considering switching financial institutions - compared to only 12% and 9% of the two oldest generations. Marketers must find a way to earn their trust and loyalty, through delivering not just the right messages and content – but also reaching them on the right channel.
Targeting financially savvy consumers through the right channel
With the quantity and quality of data now available, financial marketers can pinpoint and define their target audiences more accurately than ever, based on characteristics such as age, interests and financial profile. This enables them to focus their efforts and resources on the channels where the most financially minded millennials and gen Z consumers spend their time.
For example, new insights from LinkedIn show that its members consistently demonstrate a greater interest in their financial health than those on other platforms. Younger members are more likely to have a higher paying job, or open a brokerage account, while those in middle and later life are more likely to have a pension, and be working with a financial adviser. So, brands know that they’re engaging consumers who are likely to be in the market for financial products and services.
Building trust and positivity through association
Having grown up with social media and online reviews, younger generations pride themselves on their ability to see through slick marketing messages and are more likely to value and trust their peers over the messages put out by big brands. In fact, research shows that two-thirds of 18 to 21-year-olds and just over half of 21 to 37-year-olds say negative word-of-mouth has deterred them from using financial services companies. FinServ brands must find ways to break through this lack of trust.
Choosing the right marketing channel can make all the difference. The same LinkedIn research shows that 61% of its members say that they trust the platform with the information they give it – 13 percentage points higher than closest social network competitor. Furthermore, 59% of members say they trust recommendations from other members, and 59% say they trust what companies post - both around a fifth higher than on other platforms. The right channel can actually boost brand reputation, a vital factor when engaging with new generations.
Taking this one step further, LinkedIn also found that consumers on the platform are actually in a more positive frame of mind than on competitor sites, suggesting that these sentiments will also reflect well on financial brand campaigns and content. For example, 26% say they feel more purposeful, 27% say they leave feeling more motivated, and 24% more optimistic, after spending time on LinkedIn; all ideal mindsets for building long-term relationships and making financial decisions.
Data-driven content that evolves with your customers
The final piece of the puzzle is engaging younger generations effectively, through delivering targeted, informative and genuinely useful content. LinkedIn data makes it possible to segment key personas and tailor campaigns as audiences go through different life stages, so that the information and messages they receive always meet their wants and needs, and is packaged in the right format. At a more granular level, brands can also tap into current trends, such as economic uncertainty or stock market performance, to make content even more relevant and valuable.
This ability to target campaigns means that LinkedIn members are more receptive to a range of content than users of other platforms, including insights from leaders and experts (71%), the latest industry news (75%), and ways to improve their finances (57%). Members are also more likely to say that the adverts they receive on the platform are well matched in the areas of savings/investments (41%) and insurance (37%), plus there is a higher willingness to click on ads (69% - at least 10% higher than other platforms).
New generations are the future of financial services, but they can be a demanding bunch, with expectations that frequently diverge from their parents and grandparents. Thankfully, through the power of LinkedIn, it’s possible to break through some of their cynicism towards FinServ, by winning their trust, reaching them in a positive financial mindset, and using data to deliver the right content at the right time. So you can increase the chance that they’ll choose you – and then stick around for the long-term.
To read more about how to target LinkedIn members based on profile and mindset, check out our ad targeting options here.