Last week I watched the storm unfold on social media and in the comments section of New Model Adviser in response to this article by Will Robins: 'Advise young for £150 a month urges planning guru Kitces'. Here I explore a possible reason for the vitriol posted online, and whether we need to stop using demographics as the basis for creating services or targeting our marketing.
I won't go into too much detail - if you've got time you can read the comments yourself - although I will start by framing why I think everyone got their back up about charging a monthly fee for advice. At its most basic level, I don't think it was an aversion to charging regular instalments for an ongoing advice service. I believe the issue was that the service was labelled 'for Millennials'.
Millennials. Ah, Millennials. A term that I despise - I'm not even in the age category - and one that gets bandied about whenever anyone wants a label for the younger generations. You know who they are, they're that group of individuals with no money to their names who would be best placed to pay off credit card debt or contribute to a mortgage than pay regular instalments for advice (one of the main arguments raised on the forums).
For those who fit this bill, I agree. Unless the adviser can demonstrate real value for the service they're providing, it's probably not a subscription fee many 'Millennials' should be paying. But that rings true for any service - not just Millennials. I know some indebted 55 year olds who would be best placed doing the same.
I strongly believe the issue was with the target audience being labelled as 'Millennial'. This term applies to those aged between 23 and 38 in 2019, quite a broad age group. No doubt there will be individuals within the segment with slightly more complex affairs who would benefit from regular access to financial advice. We are all used to paying regular subscription fees, from our monthly Netflix account, to Hello Fresh or a quarterly instalment to the Craft Gin Club*. Why not pay a monthly fee for advice? (I could, and no doubt will, write an entire article on this concept).
Over the past few years the views of marketers around targeting have dramatically changed. Indeed, many commentators say we are now living in the 'post-demographic' age. And I agree.
Why is this so? Because consumers are no longer behaving 'as they should'. For example, according to the Internet Advertising Bureau the majority of video game players in the UK are now women and there are more gamers aged over 44 than under 18. So we can throw away the stereotype that gamers are pimply teenage boys locked away in their bedrooms.
Behaviours toward alcohol have also changed. It's not youngsters binging on alcohol we need to be concerned about, it's those aged 55 plus. There's a tendency for those in younger age segments to drink more mindfully, with an awareness of the impact alcohol can have on their bodies.
TrendWatching (a fantastic site, I recommend you subscribe) have defined this as:
People – of all ages and in all markets – are constructing their own identities more freely than ever. As a result, consumption patterns are no longer defined by ‘traditional’ demographic segments such as age, gender, location, income, family status and more.
When target segments start to buck the trend as shown in these examples we need to consider an alternative approach. I'm sure you've seen Be-IQ's recent launch for their coaching programme, designed to teach us about behaviours. I strongly believe this behavioural-based view of the world is the future. We'll throw age and demographic characteristics out the window, in favour of understanding and targeting specific behaviours.
The team at Proctor & Gamble agree. They use consumer research 'smart audience' profiling, rather than simple demographics. Danone, the food company uses 'tribes'.
A recent Marketing Week survey revealed that behaviour (44%) and location (42%) trumped age (38%) as a commonly used marketing dataset.
I think it's time we created a movement in our profession. Let's take a fresh look demographics, but overlay this data with the behaviours that drive us. Oh, and at the same time, let's do away with demographic labels - no one likes them anyway!
This article was originally created for the DISCUS website (Discretionary Investment Services Coming Under Scrutiny), an information resource for financial advisers interested in outsourced investing. The weekly DISCUS newsletter became Embark News on 31 October 2019.
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