Financial Marketers: Understand Gen-X Financial Behaviors

Does Segmentation Go Far Enough?

Segmentation for customer acquisition is a mainstay of daily business for most financial services firms. Putting customers into buckets makes complete sense to enhance marketing productivity and send the right message to the right audience. However, some segmentation systems are not refined enough, often because the firm does not have access to data, such as total estimated asset potential, investment preferences or credit usage.

Another challenge is to onboard segmentation effectively so you can deliver your message via the best digital channels for each audience. Yet both of these factors – effective segmentation and then targeting groups via email, online ads, social, mobile and other digital channels – are critical components of engaging customers.

Why Financial Behaviors Matter

Here's an example. Consider Gen X, Mass Affluent households that live in metro areas. They are all about the same age, some may be married, and some may have kids. They all have assets somewhere between $100K and $1 million. It's likely they all have decent incomes. So you might assume they have a variety of financial products like a mortgage and credit cards. And they're probably thinking about their kids' college education, home improvement projects or retirement. So your marketing group could simply serve a variety of online ads to this audience, assuming all these products would appeal to this life-stage.

As they say, there is always room for improvement. If you dive into the financial behaviors of this group, you'll find they're not all alike. They actually have varying financial motivations. Some are spenders and some are savers. Some are risk-takers and some are very conservative with their assets. Others are thinking long-term while others are living for today. Would knowing these financial behaviors have an impact on what you promote in your online ads?

How to Further Refine Affluent Gen-Xers

Our segmentation system breaks the Gen X, Mass Affluent group, which we collectively call “Rising Stars,” down to four clusters that can be reached via digital channels.

• The first is Credit-Active Investors. This group has a higher than average credit utilization, number of credit lines, and credit-to-income ratio. Therefore, they may be attracted to ads about loan consolidation.
• The second one is Retirement Planners. Their portfolio is highly concentrated in retirement funds. For this group, longer-term financial advice or tax-saving products might be of interest.
• Savers is the third group. They have over half of their assets in deposits and a minimal amount in retirement funds. Yes, they are very conservative. Perhaps they could use a series of educational ads and landing pages on the benefits of diversification.
• Investors is the last group. They have a good mix of financial products and their credit use is moderate. They are also more risk-tolerant than their peers, so they might be responsive to ads that question if their portfolios are balanced.

These are four similar clusters in terms of assets and age. But clearly four different sets of financial behaviors, which require four different digital marketing strategies. Gaining a better understanding of your audience will make your ads more relevant, not just for Rising Stars, but for all of your target segments. Learn more about Digital Targeting Segments from Equifax.