Gen Xers Get No Respect!

By Mary Ellen Georgas-Tellefsen

Are you missing an opportunity with the Rodney Dangerfield of generations?

It’s tough being a Gen Xer. Growing up in the shadows of baby boomers, they were the lost or forgotten generation that had no name, just as Generation X implies. They’ve lived through some of the worst economic conditions in recent history—many of them had a tough time findings jobs in the early 1990s after college or graduate school, and many saw a huge decline in their net worth when the dot-com boom imploded, the housing market tanked, and the economy went into the great recession. Some estimates say they lost on average 45% of their net worth—a bigger hit than any other generation has taken in a long, long time.


Despite these terrible economic conditions, Gen Xers are resilient and successful, and deserving of more focus.

Marketers have never been beating down their doors because this generation isn’t as large as the boomers or millennials. And they aren’t known to have the same assets as the boomers. Nor are they known to be as technically savvy as the millennials.

Yet marketers do care about mass affluents. And Gen X now represents the largest component of that segment. 

In fact, Gen X accounts for 37% of all mass affluent households, and represents approximately 25-31% of current consumption in the U.S.—even though this generation makes up only about 20% of the population.

The mass affluent segment, defined as households with at least $100,000 in annual income, is large at approximately 68.5 million consumers. And it is growing as more Gen X and millennial households enter its ranks.

Needless to say, it holds substantial financial assets. While mass affluent consumers have enough money for diversified financial products, they do not have quite enough to warrant the attention of private bankers and wealth managers. That’s why the mass affluent segment—and its Gen X sub-segment—provides a lucrative opportunity for retail banks and community banks.

In addition to being the largest sub-segment of the mass affluent group—meaning they have assets to invest and money to protect—Gen Xers are interesting because they are the first generation to have adopted all sorts of new technologies throughout their lives. They’ll use the ATM, online banking, online trading, and even adapt to mobile payments as they like cost-effective conveniences that make life easier. But they also like to know they have a human backstop for questions and issues that come up along the way.

How do you begin a segmentation strategy and ensure a profitable focus on this lost generation?

You start at the beginning: by asking yourselves what you have to offer, how you will be different, and how you can build your business with these value prospects? Here’s how I would approach it:

  1. Conduct market research and assess your competitive positioning.

Time to evaluate your market—again. Take a look at the hard data to understand the size of the market opportunity and opportunities for revenue growth, product leadership, operational excellence, and superior servicing for your clients. In addition, it’s also time to re-assess your perceived strengths and weaknesses against those of your competitors, and define how your organization can differentiate its mass affluent product offering and create value for the mass affluent segment.

  1. Determine your value proposition and product strategies.

Now that you know there is a good market opportunity—and that you can compete in your market(s) for these highly valuable mass affluent customers—you can begin to create the optimal mix of product offerings to meet the financial needs of these customers. Now’s the time to identify value propositions to create effective differentiation, grow revenue, and maximize segment profitability.

  1. Create a sales strategy and ensure sales team effectiveness.

Great marketing can get the attention of those Gen X mass affluent customers. That said, you need to understand that segment’s buyer behavior by mapping the sales process as a defined series of steps. This will help to efficiently guide prospects from initial contact to purchase all the way through onboarding. And, you need to do this as an omni-channel experience. Now more than ever, Gen-Xers are using multiple channels throughout the sales process to research, begin, and complete the sales and onboarding processes. You must ensure your organization is capable of supporting sales from the customer’s point of view—meaning they can begin and pause and complete the process via any channel at any time.

  1. Guarantee service effectiveness.

Seamless delivery of an excellent and consistent customer experience across all channels is critical for long term success with the Gen X mass affluent segment. You must identify all client touch points—human and digital—and design the right service delivery model that will make your Gen Xers feel valued regardless of their product or service inquiry. Remember, these folks like talking to humans, yet will take advantage of all your technical capabilities, so when they want to talk with a live person you have to be prepared and make it count.

  1. Understand pricing and profitability management.

We know our market. We’ve created a marketing and product set value proposition that gives us a competitive edge. And we know how to support this new segment focus with tailored sales and service processes. Now we need to confirm just how profitable our new strategy will be. This step can certainly happen earlier on in the process and be revised along the way. But at this stage, your organization should have pro formas and a plan to maximize profitability and rationalize product packaging and value-based pricing. You also need a plan for ongoing pricing strategies, reporting, and management.

  1. Address organizational structure and effectiveness.

Last, but certainly not least, you need to identify the most effective organizational design for executing your segment strategy. This can often be the most difficult change to implement in your organization. You need to evaluate and implement alternative roles and/or responsibilities that will ensure delivery of effective solutions and the desired experience to your clients. There are many management structures to be considered, so it’s important to make informed decisions that provide the greatest benefit to your organization.

These are exciting times in financial services.

The rise of new technologies is changing the way we relate to and use money every single day. Using a segmentation focus—whether or not you agree that Gen Xers are a great target market—is one way for your institution to prioritize investments to ensure it is attracting the new customers you want, creating systems to deliver on a differentiated value proposition, and measuring success in terms of customer acquisition, retention, balances, and profitability.

And as for the Rodney Dangerfield of generations, it’s time to give Gen Xers some respect and attention. They are in their prime earning years—and prime years for financial services help and assistance. Why not take a closer look to see if your institution can’t capitalize on a large, profitable, and relatively underserved market? You’ll earn their respect and their wallets.

Mary Ellen Georgas-Tellefsen is managing director at Capital Performance Group, a management consulting firm that provides advisory, planning, analytic, and project management services to the financial services industry. Email: [email protected]