Breaking Through to Boomerang Consumers16 Aug, 2010 By: Jackie Jones Response
Financial services marketers should target the newest wave of consumers with education through effective DR channels.
The ages of 22 to 29 years old are often a time of first cars, homes, marriages and children — and with that comes loads of new financial decisions and fiscal responsibility. Now, thanks in part to a struggling economy and a decision to save by “Boomerang Consumers,” many millennials are opting to move back in with their parents, even after being on their own throughout college and after.
Marketers shouldn’t assume Boomerangers aren’t still balancing a hefty amount of financial responsibilities just because they’re living under their parents’ roofs. In fact, many are managing their finances in a far more deliberate and conscious manner than in the past, according to recent market research that suggests financial services marketers could benefit from refining the way they target their newest — and likely youngest — wave of consumers.
“Marketers need to ask themselves, ‘How do you target a professional living in a multigenerational household who is an integral part of the household, very much connected to the family and more financially aware than previously viewed by some?’” says Elizabeth Dolinski, president of Luminosity Marketing.
Luminosity Marketing, a New York-based marketing communications firm, recently explored implications of the growing Boomerang demographic: young, college-educated adults in which 35 percent polled have chosen to live back at home. It’s a market that shouldn’t be ignored. Consumers typically begin developing brand loyalty habits during the ages 20-29, according to the study, and Boomerangers are increasingly sensitive to finances of both themselves and their parents.
“There’s a perception in the market that these consumers are still children, that they’re living at home because they have to, and that there’s a power struggle with parents, but we found that a lot of Boomerangers are making empowered decisions about life,” Dolinski says.
Of particular interest to financial services marketers, Dolinski says Luminosity’s research found that the greatest percentage of Boomerangers’ budget is dedicated to saving, followed by credit card payments, helping out their parents with rent, student loan payments and vehicle payments.
“The largest pieces of their income go toward saving,” Dolinski says. “That’s where their heads are at, and where they spend their money really is about financial decisions.”
Striving to Save
Targeting Boomerangers through direct response tactics and shifting marketing messages toward savings rather than debt management could show promise for the financial services industry, says Dolinski, who adds that Boomerangers view themselves as empowered individuals making a choice to return home in order to eventually achieve greater life or financial goals.
“If financial institutions want to connect with this group, they have to acknowledge Boomerangers are financially aware,” she says. “There are lots of possibilities in products targeting saving that could be explored more.”
State Farm Insurance is one financial services company that says it strives to incorporate prudent credit use in all marketing messages, especially toward younger consumers, according to Tim Van Hoof, State Farm’s director of marketing. The Bloomington, Ill.-based insurance company utilizes various direct response channels, including DRTV and mobile interaction, to target millennials while “teasing out what makes them unique as a generation,” Van Hoof says.
“What is maybe uniform about this group is that they are all individuals and like to be spoken to as individuals,” Van Hoof says. “When it comes to financial services, (the challenge) is keeping up with what this audience really wants and what they desire and where they’re headed financially.”
State Farm’s “Magic Jingle” commercials stress the accessibility of agents to consumers and direct customers to its interactive Web site, whyagent.com, which links to Facebook and Twitter. A separate TV campaign dedicated to savings drives traffic to www.discountdoublecheck.com.
State Farm has also launched a variety of mobile applications, such as its Pocket Agent, which lets drivers submit a claim, find a repair facility, contact an agent and check account balances, according to media relations spokesman Dick Luedke. State Farm believes mobile applications are key DR tools that offer consumers — especially the younger generation, which never strays too far from their cell phones — easier access to the services normally provided by an agent, Van Hoof says.
“The interactivity of a Web site on your phone has been less than stellar, but as that technology advances, we’re getting smarter as a brand to utilize that,” he says. “There’s a lot of effort and energy here in mobile Web.”
State Farm is keen to the importance placed on family by Boomerangers. As a longstanding, mature brand, State Farm has always done well with its older set of consumers, Van Hoof says, and has been able to effectively reach out to emerging Boomerangers through marketing to their parents, as well.
“(Boomerangers) are fiercely independent but they value their parents’ and their peers’ point of view when it comes to critical decisions in their lives. They are comfortable at home, so while we already see an opportunity to talk to Boomerangers through online vehicles (like E-mail marketing, mobile apps and Web traffic), we’re also trying to talk to them directly through their parents, our onboard customers,” Van Hoof says.
State Farm accomplishes this in a variety of ways, most notably through its Make It Possible campaign, which connects consumers directly with agents at community workshops geared toward financial literacy, according to Luedke.