11 Apr 2019

How to weigh up the pros and cons of age segmentation in your reward strategy

So you want to communicate to your workforce about financial wellbeing, first things, first – well done. This is a field that grew in popularity a few years ago as more and more businesses realised that their people were less effective when they had money worries – and then became even more popular when it was realised that everyone has money worries. But even so, the proportion of UK businesses that have anything even approaching a financial wellness strategy for their workforce is tiny, so by taking this on you are already differentiating your organisation from the crowd.

Effective communication
The chances of any communication programme being effective are enhanced by how well the messages are targeted and how relevant they are. You can prove this with a simple experiment. Shout ‘duck’ next time you are in a bustling crowd and you’ll see it doesn’t work. Then shout ‘duck’ at someone on a building site and you’ll see it is far more effective. Of course, this experiment may result in odd looks or possibly an earful of abuse, but it is all in the name of science so it’s a small price to pay.

Targeted approach
But how do you target your message?
Audience segmentation is an effective marketing formula that can have real benefits, provided you manage to segment the audience in a way that works for the messaging. Often age is the key determinant of a segment, and that’s probably because age tends to be a data item that is easy to get hold of and simple to understand. Other than ease and simplicity, there are other positives, in that you can use age as a correlation to other factors:

Older workers are wealthier than younger workers
Older workers have a more settled lifestyle than younger workers
Financial pressures are different for different age groups
Age correlates with propensity to save
As you become older, your interest in retirement savings increases
Age is an indicator of the media you prefer to use.

Yes, but no. Whilst there may be some data to suggest that some or all of these are true, they are stereotypes. And as with all stereotypes, they miss the subtlety that comes with being human. I have met many young people who are conscientious about savings. I have seen research where a 62 year old woman asserted that retirement was ‘well in the future and not something I’m thinking about yet’. My father and mother are of similar age and yet one has embraced social media and the internet whilst the other hasn’t. When I look at the teams I have managed, age does not seem to make you immune to the changes life can throw at you. Humans look for patterns. We see them everywhere. But we also see them where they are not.

So is using age to segment data useless? No.

For product marketing, it can be highly relevant. If the product is useful for an older demographic, it’s the best targeting you can get. But…
Age on its own might be limited, but age in combination with another data item could be very powerful.

Target feelings, not facts
What other factors might be useful? Well, how about something that indicates personality? Could it be that despite all the noise about millennials being snowflakes and baby boomers being hard workers, the real truth is that humans have characteristics which cross the age divide? Yes, the environment changes and that has an impact on how we behave – there’s a lot fewer lute players around now – but human nature is human nature. If you want to see real impact from your communications strategy, try targeting feelings, not facts.

What do I mean by this? It’s your personality that drives your attitude to finances and has a big impact on your financial ’wellness’. You can lose control of your finances no matter how much you earn. You can be in control of your finances even if you are on minimum wage. If you want to target communications that, for instance, encourage people to spot the warning signs of finances getting out of control, you should consider aiming at the types of people whose personalities might let that happen. You might want to stop short of using the data on who completes their online training on time and who leaves it late (it’s the same people each time, isn’t it?) but there may be some behaviour-led data that might prove more useful than the passing of years.

In short:

Segmenting by any data item you have access to is usually more effective than not segmenting at all
If you do segment by age, beware stereotype assumptions about age categories, or risk disengaging the audiences you are targeting
If you can, apply a second data or third element to age to add some depth to the personas you are building
Once you’ve got your segment, don’t make the assumption that everyone in that category necessarily thinks the same way.

The author is David Millar, head of client communications at JLT Employee Benefit.

This article is provided by JLT Employee Benefit.

If you'd like to further develop your knowledge about employee wellbeing, a day at the Employee Wellbeing Congress on 20 June in London, is the essential event for you.