By Linda Koco
CHAMPIONSGATE, Fla. – What should life and annuity advisors and companies do in order to become more successful in reaching the younger generation of customers? Cam Marston’s suggestion is to “sell the emotional paycheck.”
By that, he said he means the industry needs to approach younger adults — Generation X and Generation Y — by talking about how a company’s particular product or service will change their personal futures.
This will require the distribution side of the business to retool, said Marston, who is the president of Generational Insights, a generational research firm in Mobile, Ala. Marston gave an address on this topic here at LIMRA’s 2015 Distribution Conference for Financial Professionals.
Many insurance companies and their agents spend much time and effort on articulating the value of their companies, he told InsuranceNewsNet in a separate interview. The carriers often tell a customer about the size of the company, its stature, its tenure in the business, and its name and brand recognition.
“But that’s not persuasive to people under age 50,” he said. They are far more biased toward the future, and in particular their own future.
“They want to know how their future will change if they buy and use a certain product. They have little interest in learning about the tenure of the company that’s offering the product or that of the representatives who are selling it.”
Ideally, they want the future to start changing right away, not off into the distant future.
This can raise some issues for industry practitioners who are selling, say, annuities, Marston conceded. An annuity, like a life policy, is a long-term contract. So where’s the “now” in that?
The carriers and agents need to point out the “now” to the customer, he said. For example, point out the emotional benefit the customer will derive — right away — from making a commitment today to taking care of the family from a financial perspective.
There is an immediate sense of personal reward that many customers feel when they do this, he said, but the sellers need to help younger customers see that.
The reward is the relief and satisfaction that comes with making a big decision in the moment. “I call this ‘selling the emotional paycheck,’” Marston said.
He said he understands carriers and agents often emphasize their longevity and name recognition to provide customers with the assurance that they are committed to the business and will “be there” to deliver on policy promises. Promotions of this kind increased during the great recession to send a message that the insurance companies are still in business and everything is OK.
However, to many younger adults, “the great recession confirmed their belief that the financial services system is rigged,” Marston said. The banks are still healing from the black eye they received in 2008, he added, and “they still have reluctant and hesitant consumers.”
It’s not that younger consumers don’t care about the financial strength and longevity of insurance carriers, he continued. But to reach the younger generations, “the industry needs to do more about focusing on the future rather than explaining the past.”
Younger consumers who do have questions about the staying power and branding of a company will probably check out the company on their own, Marston said. “The millenials (Generation Y) are especially likely to do this,” he said. “They will check it out with their parents or go online.”
Advisors still need to know about what happened in 2008, and be ready to discuss it when asked, he added. “Any advisor needs to be versed in the story and how the industry came out OK,” he said.
But to get to the point where such a discussion comes up, carriers and agents first must get the younger generations interested in what they are selling, he emphasized.
And to do that, he reiterated, “They first need to sell the emotional paycheck — the reward for doing the right thing now. They need to point out that being responsible has its own satisfaction.”
Some advisors have contacted him to say they have tried the “future focus” approach and had success with it, he added. Anecdotal results are still coming in, Marston said, but “our research suggests this will help.”
Business is in a transition period, learning more about what the younger generations value, he said. This is a transition from the focus on baby boomers, who were raised in a time when the country was “growing the affluence,” to focus on the younger generations, who were raised right in the midst of an affluent society. “The younger generations want to buy an experience — now,” he said.
InsuranceNewsNet Editor-at-Large Linda Koco, MBA, specializes in life insurance, annuities and income planning. Linda can be reached at email@example.com.
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