By Lianne Wade (Vice President, Customer Insight)
I know, I know! EVERYONE is talking about Millennials today: How best to reach them. Why they are such a valuable marketing target. How to gain credibility with them. Even how to successfully work with them, or better yet, for them. The list goes on and on.
Well, here’s a secret I’d like to share about Millennials. We uncovered this through our research.
Millennials actually do care about certain things that can occur very far into their future, and they can even be prompted to do something about it now.
What certain things am I talking about? The very exciting topics of retirement savings and life insurance.
I’m being tongue in cheek, because these are very dull and laborious to most of us, but no one will question their importance. Like all of us – I’m a Gen X/Baby Boomer cusper by the way – Millennials should care about these financial matters today to ensure their own future, but oftentimes, they may not.
Why? Well, first we need to understand something called Behavioral Economics.
What Is Behavioral Economics?
We are human beings after all, and often, we make decisions about our finances which are considered irrational – that is, our decisions may not be in our best interest. Behavioral scientists have studied the reasons why we make these types of decisions, which don’t fit economic models by the way, and that study is called Behavioral Economics. There are many principles designed to overcome these biases and motivate people to make decisions which would be in their best interest.
One of these principles is called Temporal Discounting, which in our study, we found to be effective with Millennials to motivate them to consider these very important (and did I say dull?) financial vehicles today.
What Is Temporal Discounting?
Let’s assume I offer to give you $100 today or $200 a month from now. Which one will you choose?
Most of the time, it will be the $100. That is because we place more value on the things we can get now, versus in the future. We live for today – many Millennials do! – and want it today. It’s just the way we are hardwired as human beings. And it is called Temporal Discounting.
Temporal Discounting places greater value on things you can obtain today, and less importance on things in the future.
So how do you overcome Temporal Discounting bias? One way is to help Millennials bridge the gap between who they are today and who they will be in the future. You can do this through language and imagery to help them see themselves in the future, perhaps as retired, having the same values and priorities as they do today. This could include enjoying experiences such as going out to dinner, having fun with friends, or spending time with family.
When this was employed in our study, it motivated Millennials to indicate that they would:
- Invest more in their retirement savings plan.
- Purchase life insurance coverage sooner than they originally planned, paying more for it as well.
Okay, so end of story. Right?
No, I did leave one key factor out, which was equally important in motivating Millennials to action.
Emotion! Emotion! Emotion!
Did you know that the great majority of our decisions are made emotionally – as much as 87%?
You may think that we are rational beings, but in fact, we are not.
Knowing this, we included emotional associations as part of the language in our study and these two emotions were effective in increasing Millennials’ propensity to buy: Relief for retirement savings and Calm for life insurance.
Implications For Marketers
What does this mean for marketers, particularly those in insurance and financial services?
These findings can be incorporated into your next campaign.
By using language and other tactics to overcome the Temporal Discounting bias in your communications with Millennials – along with the associated emotions of Relief (for retirement savings) and Calm (for life insurance) – it can impact your bottom line through increased contributions and sales
The best part is, this can be achieved in the short term, without an investment in software or hardware.
As we marketers know, Millennials are a challenging target, and we’ve unlocked one secret which can lead to success.
And Here’s A Bonus
In addition, you may want to consider using these tactics as part of your communications strategy, which have been proven to be effective with Millennials:
They rely on peers and family for advice: Provide authentic stories and peer comparisons.
They like to manage finances themselves online: But typically, they don’t know where to start. Offer online guided, self-service tools, which are mobile friendly.
They value one-to-one guidance: Provide highly personalized service experiences.
Learn even more in our E-book: How to prompt Millennials to save more for retirement and purchase life insurance now
Want to have a conversation about Wilde Agency’s research findings? Contact Lianne Wade, VP Customer Insight.
E-mail: Lianne.wade@wildeagency.com
Twitter: @liannewade
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