Targeting Generations X and Y: How to Attract and Retain Young Customers

Are you a baby boomer? Or do you consider yourself a Gen Xer? Or are you a part of the youngest generation, Generation Y?

No matter what your age, as an agent or broker, a sure way to grow your book of business is to attract customers who are younger than you. Although this can be a difficult task, the financial benefits of securing young customers and retaining those customers for life are worth the extra effort.

Are young customers different?
“It’s important for us not to forget that there’s a changing of the guard going on in this world,” said Derek Ross, vice president of Woodland Hills, Calif.-based C.M. Meiers Co. “The Generation Xers and Generation Ys are starting to come up with new and inventive ideas. They’re very creative; they are free thinkers and they need people who are creative and think in the same manner. And obviously not only young people can do that.”
Ross, with 65 percent of his clients under the age of 35, said that the key to attracting and retaining young clients is to be dynamic and energetic. Young customers are drawn to insurance agents who are similar to them, he said.

“I think they like dealing with someone who has a young exuberance, who gets a thrill out of life,” Ross said. “I think what they like in me is the fact that I’m very similar to them in thinking outside the box and being creative. I don’t follow standard traditional guidelines. We do a lot of brainstorming together which really makes it fun. I feel that it brings out some excitement that normally isn’t in this industry and that attracts young people.”

Tony Alessandra, president of Mission Viejo, Calif.-based Insurance Solutions, said that young customers’ insurance needs may not be the same as other clients’ needs. He emphasized the importance of finding out what young customers want before beginning any marketing efforts.

“Find out what their buying habits and styles are and what really attracts them and turns them on in relation to purchasing insurance,” Alessandra said. “It may be a totally different buying style in how they acquire their insurance than perhaps somebody in their 30s with a family.”

For example, young customers often purchase personal insurance, such as auto and homeowners or renter’s policies, but many young people also own their own businesses and are looking to purchase commercial insurance.

Jeff Lang, vice president of Los Angeles-based Acordia Insurance Brokers, said that younger customers have a different perspective when purchasing commercial insurance compared to their parents.

“I’ve found that the younger buyers are more willing to consider things like cyber liability,” Lang said. “They see the need for employment practices [liability insurance] and they understand directors and officers liability. Their predecessors and their fathers and some of my older, more rigid clients don’t want to even consider that unless they’ve had a direct hit or a near-miss with regard to claims.”

Forging a relationship
The first step in targeting young customers is to find common ground and develop personal relationships with them, according to several agents.
“First you need to find some common ground with your prospective client,” Alessandra said. “You need to hit it off. In this business, as much as it’s price-driven it’s also relationship-driven. We’ve found that to attract the very best clients, regardless of which segment we’re marketing to, you need to have common ground and you need to develop a relationship.”

Ross said that it is best for agents and brokers to discover hobbies and interests that they have in common with consumers and then build upon those similarities.

“I would tell someone who is a middle-aged or elder broker to tap into the younger generation,” he said. “One of the ways is not only connecting on a business level but on a personal level. I don’t know if someone in their mid 40s, 50s or 60s is going to find like interests with someone in their 20s or 30s but that’s a good way to start. It’s always nice to deal with people who are similar, where you can find a common ground and a common interest.”

Ross said that he goes out of his way to develop personal relationships outside of work with his clients and associates. He said that conducting business while doing something fun is an effective way to build a relationship with young clients.

“We can all put on our suits and sit in our offices and talk about insurance all day long, but when I’m on the tennis court with a mid-30s owner of a company, that’s sometimes where we do our best brainstorming, when we’re out there doing something else,” he added. “I go out of my way to develop solid relationships with my clients outside of showing up there and collecting a check.”

Alessandra said that an important part of developing a relationship with a client is to gain the customer’s trust.

“They buy because they trust you,” Alessandra said. “If they don’t trust you and they don’t have a relationship with you, they’re not going to stay with you. You need to find and become friends with these folks first. If they feel good about you, they’re more likely to buy from you. Consult them with honesty and integrity and that will in turn develop the trust in the relationship to make a long-standing client.”

Vince Kehrlein, owner/broker of Above & Beyond Insurance and former president of the American Agents Alliance, said that the customer’s perception of the agent or broker is paramount in maintaining a successful relationship. He explained that sometimes younger clients may get the impression that older brokers and agents are talking down to them.

“A lot of older brokers will alienate the younger customers with the way they talk to them,” Kehrlein said. “Young people will call me up and they feel that some of the older brokers, especially if they’re over 50, have a tendency to talk down to them and some of them will talk in very simplistic terms to them, which they feel is patronizing. Others will start to scold for a late payment. It’s very typical of an older principal to start to lose a little touch with the client. Older brokers often are no longer in the day to day workings of an agency. It’s not the broker’s perception of how he’s being [that’s important], it’s the perception of the client. They are the client and they’re the one with the checkbook in their hands.”

Customer service is essential
The most important component of the agent-client relationship is customer service, according to Ross.

“Young customers are looking for customer service,” Ross said. “They want to know that they’ve got someone on the other end of the phone that’s going to pick up the phone when they call, that’s going to be there 24/7. I’m a firm believer in when they call me it’s on their time so I better be there for them.”

Kehrlein said that although customer service is important, price is always a factor for the young consumer, especially in personal lines.

“To be honest, probably the most important factor to anyone regardless of age but especially for the younger couple or person is price. I could’ve given them the best service in the world, but if someone else can save them $200 a year, they’re moving. That’s the most heavily weighted criteria in anyone’s mind when shopping with insurance.”

Alessandra disagreed and said that quality service will retain a client more than the price of the product. “As much as we think it’s the product or the price, quite frankly, regardless of what segment we’re marketing to, the client is ultimately expecting quality service in every dimension of the business,” he said.

“You may have a great price but you won’t be able to retain your clients unless you have world class, follow up service. If they feel that they’re just working with a high-volume type agency where they’re not going to get the personal touch and service, they’ll probably look for an agency that will give them that touch and that service.”

Using technology to your advantage
Another critical factor in attracting and retaining young customers is the appropriate use of technology.

“Ease of doing business attracts young consumers,” Lang said. “They like the idea of using the Internet and e-mail more than snail mail [letters]. It’s actually been a struggle because they are so technologically advanced, more so than their fathers. They want to do everything by phone and by e-mail. It’s more of an effort for me to see them on a quarterly basis. In order to keep my service up there and my face in front of them, I need to get in front of them more often. I do this by sending out newsletter e-mails.”

Ross agreed that young clients want an agent who understands technology and is computer savvy, while Kehrlein offered a technique that his agency uses to target young consumers.

“If you want to grow you have to grab some of those younger customers,” he said. “When you advertise on different companies’ web sites, make sure that you’re in all the agent and broker locators for the companies that you do business with. Your younger clients have a greater tendency to go on the Web, at least to do investigation. They may or may not buy on the Web, but they are certainly doing their homework on the Web. That’s where young people go for information. Even if they see a TV ad, they’re going to go online and check it out. They seem to be much more wired into the Net.”

Bridging the gap
Despite the gap that may exist between generations, it is possible for agents to target consumers that are younger than them and to maintain a successful relationship, Ross said. Ross reiterated that the Baby Boomers, Gen Xers and Generation Ys all have something to learn from each other in the insurance industry.

“From the day I stepped into this industry I realized that [older agents] need the young guys just as much as the young guys need the [older agents]. We need each other. I don’t think one can exist without the other. Without that balance, our industry would have a difficult time heading in a positive direction in the future.”

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