• by Tanya Gazdik , October 4, 2007

The Generation X market is a tough nut to crack--but well worth the effort, according to a new paper from Media Logic, which details how the group has "immense marketing potential," despite its relatively small size compared to Generation Y and Boomers.

The paper, available at mlinc.com/generationx, states that Gen X's need for financial solutions is greater than any other age group because of its members' stage in life: They are purchasing homes, starting families, considering life insurance and preparing for education expenses. They are starting to consider retirement planning and accounting for health care. And they are getting ready to take care of ailing, aging parents who are not financially ready for their own retirements.

With both day-to-day and long-term financial obligations, Gen Xers suffer from more financial strain than other generations, says Christina Smith, vice president/management supervisor of financial service accounts at the Albany, N.Y.-based Media Logic. However, they are hesitant to turn to financial institutions to help temper this financial stress. "There are challenges in acquiring, maintaining and building deeper relationships with this segment," she says.

Gen Xers are cynical about financial services as a result of bad experiences--after having overextended themselves with credit during the '90s, when jobs were hard to find but access to credit was at an all-time high, according to the report.

This generation was not prepared for the growing complexity of financial solutions available today, Smith says. They did not receive a financial education from their parents, and much of the information they have received from the financial institutions themselves has been difficult to understand, she adds.

With more products and services available than ever before, Gen X is not equipped to compare options and make decisions. Instead, this segment is often paralyzed into inaction--waiting too long to make choices, and unsure where to turn for guidance, Smith says.

"Gen Xers need direct, transparent financial guidance," Smith says. Financial marketers should aim to educate and enlighten them while being up-front and maintaining full disclosure. While Gen Xers may use the Internet to comparison-shop and get acquainted with a product set, they also want the perceived security of human interaction at the moment of product selection and purchase.

Financial service providers need to have the means to connect with a person via phone, online or, better yet, face to face. They also want financial institutions, products and services to deliver convenience, due to the increasing demands on their time from all sides, both children and parents.