Millennials: The Word-of-Mouth Generation
Insurance Experts' Forum, October 8, 2013
We hear it often: Insurers need to get with the times technologically to connect with the younger generations. If they do — if they make the investments in innovation and technology — will it make a difference?
That balance is tricky. In fact, during Celent’s “What’s Next: The Search for Disruptive Innovation” event in Boston last week, I listened to a panel of Millennials talk about what they need from their financial institutions. It left me even more confused about how to reach them.
“The best way to invest in the future and in your customers and in your customer acquisition strategy is taking care of your current customers and making them the best evangelists as possible for your service,” said one of the panelists. “I spend 20 more hours a week on social media than on television. If you’re going to advertise on TV about how great you are, you’re not reaching me. But when you do reach me on social, do it in the right way with the right message,” the panelist said, adding that simply using banner ads and TV spots on the Web is waste of money.
So, I asked if they follow their insurers on social media. And two out of the three, including the one quoted above, said they don’t follow their insurers on any social media channel. How do insurers reach them? Parents, and then each other.
This generation doesn’t respond to ads; they respond to recommendations and word-of-mouth. And, these same customers are a vocal bunch, generating cycles of recommendations and warnings to each other, and technology is the enabler of it. More technology investments are needed, especially in the area of mobile. The panelists all use their smartphones for a number of financial processes. One even said she uses her smartphone as an extension of her computer.
This generation grew up with technology. In fact, according to a Northwestern Mutual survey, among those using technology for daily finances, the millennial generation leads the way, with 62 percent using online banking or automated bill payment, vs. 60 percent of Generation X and less than half (37 percent) of those aged 60 or older.
They expect technology to work, and to work the way they want it when they want it, especially when it comes to financial transactions.
“We go for convenience,” one panelist said, followed up by another who said, “I am happy when easy stuff is as easy as it should be.”
Otherwise, while they may not be following the insurer on social media, they’ll make it known to everyone they can reach on there that they shouldn’t either.
Carrie Burns is editor-in-chief for Insurance Networking News.
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