Less courted by financial services players than Mass Affluent clients, Neo-Mass Affluent clients are also clients in whom it is essential to invest. Not yet meeting the criteria to belong to the circle of well-off customers, they nevertheless have the potential to become so within a few years: it is therefore essential to acquire the means to identify, attract and retain them in a logic of long-term development. How to optimize today’s investments while maximizing the return on the potential of Neo-Mass Affluent?
The Neo-Mass Affluent, a young and demanding target with very high potential
The Neo-Mass Affluent or Emerging well-to-do are customers who do not meet the Mass Affluent criteria but who have a high probability of doing so in the years to come.
No definition is commonly accepted to designate the Neo-Mass Affluent but typical profiles and major characteristics exist to recognize them. Coming from Generation Y, the Neo-Mass Affluent are between 25 and 45 years old. This age category also corresponds to that of Millennials who have in common the fact that they grew up with new technologies. Although they have a strong appetite for digital services, they are less active in financial transactions than their elders and are more focused on real estate investment. Urban people in debt with a mortgage, the Neo-Mass Affluent can be an executive, TNS, work as a liberal, freelance or start-up, however, he has income and assets of less than € 100K per person. Captive customer of their main bank, he is just starting to save and contact financial institutions. Among these Neo-Mass Affluent customers, several profiles can also emerge with regard to their assets, income or lifestyle.
The need to address this target today
For financial institutions, the challenges to address this clientele are numerous and are fully in line with ambitious marketing strategies focused on omnichannel customer relations and an exceptional customer experience. From our point of view, seeking to position itself with Neo-Mass Affluent customers makes it possible to meet three major objectives:
- Retain potential customers existing in the portfolio to prevent them from competing when they meet the criteria of the Mass Affluent clientele.
- Accelerate development customers with the highest potential, ie those with the greatest future flows, to encourage them to become Mass Affluent more quickly.
- Recruit younger clients, in order to renew aging client portfolios for which the potential for future inflows decreases over time.
The period between 45 and 65 is at the crossroads between two phenomena : on the one hand, greater savings capacity, the various loans (real estate, vehicle, children’s studies) generally paid off and the children having left the family home, and on the other a strong period of clients’ multi-financialization .
This is why it is essential to position yourself first on this Neo-Mass Affluent target, and anticipate their entry into the 45-65 year period. We must now become a trusted partner who supports these clients in their phase of personal and professional development and before the acceleration of their savings capacity.
At the same time, the booming FinTech and Insurtech are very serious competitors on this target in particular. More sensitive than her elders to digital, she is seduced by their digital-centric offers: Robo-Advidor, self-care course, etc.
What levers should be activated to address the Neo-Mass Affluent?
Today the Neo-mass tributaries are facing major challenges : real estate prices on the rise, preparation for retirement earlier and earlier, the burden of taxation increasingly heavy …
So many challenges that constitute opportunities for financial institutions in terms of support and preparation of the heritage strategy, even more upstream than for previous generations.
This clientele has specific expectations and needs, four of which are key to be able to address them:
- With the construction of its heritage strategy, the Neo-Mass Affluent wishes to be accompanied at every stage of his life : real estate purchase, loan repayment then, tax exemption and retirement.
- As digital native, he is ultra-connected, multi-equipped, fintech enthusiast and looking for a very extensive omnichannel and digital experience.
- In order to compensate for its weak financial culture, the Neo-Mass Affluent has need a financial coach, that is to say an advisor who accompanies and supports him in his decision-making and the achievement of his objectives.
- Opportunist, he is looking for best offers and services on the market offered by financial players who resemble it (identity, values, CSR, etc.).
Several players are positioned on these levers and in particular Fintech, which represent an abundant source of innovative practices in the digital sector, by developing new management and investment solutions such as PFM tools, Robo-advisors, Crowdfunding, etc.
Adopt the right strategy to ensure virtuous growth
Given the specific needs and expectations of Neo-Mass Affluent, financial institutions must design an innovative and dedicated action plan. It is not enough to duplicate the Mass Affluent programs. It is necessary to adopt an approach that specifically addresses them.
This target requires from today a dedicated value proposition, with a differentiated tone, a rich digital experience, and offers & services perfectly suited to its needs. The themes of taxation and retirement must be particularly in-depth, with products adapted to their values and their projects. These questions should also be incorporated into the center of a long-term wealth strategy.
It will be the ability to project the client onto a long-term vision of building up its heritage, while integrating and anticipating all the variables of income, taxation, retirement, and personal situation over time, who will do the success of the established relational model.
Detect high potential Neo-Mass Affluent customers as soon as possible
Certain players, already established on the Mass Affluent clientele, are already positioned in the Neo-Mass Affluent segment through offers dedicated to this clientele, or shared with the Mass Affluent:
- HSBC launched in 2010 the “ HSBC Advance »Aimed at its young affluent clientele, whose income are between 35k € and 75k €.
- The BNP Paribas Priority program is aimed at customers with a financial heritage between € 20k and € 250k.
Other players take into account other criteria, broader than financial assets, to take into account potential future Mass Affluent customers:
- Société Générale uses an algorithm to detect customers during their rise to the high-end segment based on criteria such as place of residence, type of training, PSC or age.
- La Banque Postale takes into account a set of criteria such as financial surface, monthly flows, equipping financial products, etc.
The Neo-Mass Affluent and the Mass Affluent constitute two types of clienteles, with different expectations and needs, which implies defining differentiated objectives and means for each target.
Investing in the Neo-Mass Affluent target is a necessity for financial institutions to ensure their future growth. However, with regard to the specificities of each actor and the composition of their customer portfolio, preliminary work is necessary to establish the right segmentation, the right strategic diagnosis and an effective action plan.
VERTONE, a strategy and marketing consulting firm, has developed a great deal of expertise on the subject, and can support you both in your segmentation work, but also in understanding customer needs and building a value proposition adapted to each segment. .
An article written by Laura Forner and Martin Blondel