Social Media the Holy Grail for Generation X, Y
April 25, 2011
If asset managers want to reach and appear relevant to the 51 million Generation X and 80 million Generation Y populations, they must actively post "remarkable and fresh content" on the three biggest social media outlets: LinkedIn, Facebook and Twitter. No question about it. That was the message from Barbara Kotlyar, senior marketing manager of data aggregator ByAllAccounts, and Loic Jeanjean, director of web marketing at financial services Internet design firm Advisor Websites, during a recent Web seminar, "Attracting Gen X & Y Clients With Social Media."
Gen X, those born between 1966 and 1976 and between the ages of 35 and 45, and Gen Y, those born between 1977 and 2001 and between the ages of 10 and 34, increasingly research, judge and select financial companies, products and advice through social media, Kotlyar said. Gen Y in particular is not impressed by traditional advertising and marketing and has the least brand loyalty of any age group, she said. Even more interestingly, the more frequently a company participates in social media, the more likely it will appear at the top of the results of a search engine, Jeanjean added. "Your goal is to hijack Google, Bing or any other search engine," Jeanjean said.
Kotlyar added: "The Gen X and Y generation witnessed the inception of the home computer and the rise of videogames, cable television and the Internet for social and commercial purposes. Having grown up with technology, they are plugged in 24/7. They prefer to communicate through e-mail and text messaging rather than face-to-face contact, and they prefer Web seminars and online technology to traditional lecture-based presentations," she said.
Gen X/Y is a critical customer base since they comprise more than 35% of the U.S. population, Kotlyar said. Further, Gen X controls $2.8 trillion in investable assets, and both Gen X and Y are eager to discuss money and finance. Thirty-six percent of Gen Y defines financial success as being able to put money aside every month for long-term goals such as retirement, and 29% of Gen Y's top financial goal is managing their income and expenses so that they can live within their means, according to a study by TD Ameritrade. For 25% of Gen X, the top financial goal is reducing personal debt. An MFS Investing Sentiment Survey released earlier this month found that 42% of Gen X/Y say their need for financial advice has increased in the past year, far more than Boomers or investors aged 65+.
"From their responses, we can see that Gen X/Y have accumulated significant assets, are willing to invest those assets and have an increasing need for advice," Kotlyar said. "However, their behavior and sentiment suggests that their needs are not being fully met by fund companies or financial advisers. The key is to know how to get in front of them and to make sure that when they need an investment product or advice, they are coming to you," she said.
And the scene on Facebook, LinkedIn and Twitter is getting crowded, Jeanjean said. Seventy-one percent of financial professionals had a profile on Facebook in the first quarter of this year, up from 55% a year ago, according to a survey by American Century Investments. Fifty-five percent were on LinkedIn, up from 45%, and 19% were on Twitter, up from 16%.
So why go on LinkedIn? It has 44.7 million active members, with 67,000 people joining daily, Jeanjean said. "That's huge," he said. Finance is the second-highest industry usage of LinkedIn, after IT, he noted. The average LinkedIn user's age is 41, with a household income of $109,703. Further, 24% have portfolios of $250,000 or more.
LinkedIn is extremely valuable to asset management firms that want to solidify relationships with existing or prospective clients and sales intermediaries because it allows participants to create and join thousands of user groups, Jeanjean said. As a firm expands its network of connections on LinkedIn, this can continue to grow to exponential levels, he said.
"You can use your connections list to look into their own contacts and ask to be introduced to potential leads, prospects or business partners," Jeanjean said. "LinkedIn is all about growing your network and connecting with the people who can grow your business or help you to attract clients," he said. LinkedIn is also useful to learn about customers' needs by reading the discussions and understanding the dynamics and the subjects that get the most comments, Jeanjean added.
As to why Facebook is an important social media service, Jeanjean continued, more than 146 million people in the U.S. have accounts on the site. "That's 71.2% of the U.S. Internet-user population," Jeanjean said. And every day, more than 830,000 people join Facebook. Further, 48% of 18-34-year-olds check Facebook right when they wake up, he noted.