Don't Forget The Other "M"

September 25, 2014
Bryan Clagett

There is another market you should be paying close attention to, but many of you are not even addressing it. Nope, it’s not the Millennials. It’s the Mass Affluents.

Nielsen defines this group as those households with $250,000 to $1,000,000 in liquid assets, excluding real estate. This is not a huge market segment, as the mass affluent only represent 12 percent of U.S., translating to an estimated 13 million households. Yet, this segment has remarkable buying power and has estimated aggregated income producing assets of just over a whopping $7.5 trillion. This market segment needs your attention now. They present retail bankers with a very attractive sweet spot between the mass-market and affluent market, as they offer a larger, more accessible audience. They have a very distinct lifestyle from the rest of the US in terms of demographics, media consumption, financial attitudes and preferences for financial products and services.

Primarily suburban dwellers, where many of you have a brick and mortar presence, these households are generally comprised of empty-nesters and baby boomers. Well educated, often with graduate degrees, they maintain high-level careers in finance, business and management. They are active in their community, socially acclimated and pay attention to physical fitness. Based on analysis of high-asset households, the Mass Affluent tends to be found fairly far outside the nation’s large metros, locating in smaller markets. Large pockets of Mass Affluences can be found in “second cities” like Hartford, CT, Santa Barbara, CA, San Antonio, TX and Richmond, VA— places noted for both livability and more affordability.

The Mass Affluents are avid consumers of media and consume news via TV, online and print. These are homeowners that also consume media focused on their personal lives and spend a great deal of time watching the Food Network, HGTV and PBS. Remarkably, they are becoming avid Facebook and Pinterest fans. This segment does not favor broadcast TV and they are frequent DVR users. HINT: Don’t plan on using TV ads to reach this segment! Interestingly, they blend digital media consumption with good ole fashion newspapers and magazines. This segment is 25% more likely than average to access the Internet from work and when they go online, it’s business, finance and investments that are top of mind. They stay informed of financial topics and news, while also allowing time to visit their accounts by tracking assets via sites like Bankrate and Bloomberg. They want to see portfolio values augmented with content that enriches their financial well-being. HINT: Sorry, your newsletter is not reaching them. HINT: If all you offer is plain vanilla online banking – it’s a quick glance and they are out of there!

The Mass Affluents are not afraid to enhance their home with grand improvements, like kitchen remodels and home additions. HINT: This market could be home equity heaven. Before I forget, It’s important to note, particularly as you roll out your mobile products, almost 60 percent of higher income consumers, like the Mass Affluent, own a smartphone and 31 percent own a tablet. HINT: If your rollout messaging strategy is solely focused on the millennials, you will fail. If you think your future or brand strategy is solely dependent on the Millenials, you are in for a rude awakening.

Reaching this highly concentrated group can be difficult, especially through traditional direct marketing channels. With the Mass Affluent, a strong online presence is important and digital marketing is an effective way to reach this valuable audience. Note however, they are 8% less likely than average to access a Internet browser using a mobile device. Perhaps this is because they spend more time than average, on the web while at work.

While the Millennials have generated plenty of market buzz, and certainly should be an attractive market segment to financial institutions, I believe the Mass Affluents also offer great opportunity to credit unions and community banks. The next time you turn to HGTV or pick up a copy of Kiplinger’s, take a look at the advertisers. The big banks, card companies and investment firms, may know something you don’t know. - BC

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