The role of generations in your referral engine
What are the different characteristics of generations and their influence and tendency to refer clients? Is there a specific demographic or profile that is more likely to make referrals and be advocates for your firm?
Professional services firms have long relied on satisfied clients who refer their services to their friends, family, and colleagues. However, in recent years, organisations have noticed that there’s been a dip in the number of referrals coming from their baby boomer client base who are now between 54 and 72. years old. This demographic’s consumer activity continues to drop as they age, making them the least likely to make any future purchases or investments.
The uprising of Generation Y
Firms now must turn their attention towards the Xennials and Generation Y, famously known as Millennials. In Australia, 2017 census data showed that in the past five years, the largest share of the population had shifted from the 40-44-year-old age bracket down to the 30-34-year olds, making Millennials the largest population group.
The growing ranks of Australia’s Generation Y has shifted Australia’s spending habits. A Macquarie strategist says, “More educated, connected, digitally empowered and demanding than their parents, Millennials are the most powerful consumer cohort in history.”
With the oldest millennial today being 38 years old, they’re at the ripe age and making a substantial impact on the business world as today’s decision makers and leaders. At this age, many of them are already in positions that give them control of their organisation’s relationship with accounting firms.
Generation Y, who have often been accused of being ‘digitally addicted’, is a much more challenging demographic to tap into. Millennials, like the generation before them, rely on word-of-mouth referrals but not in the traditional sense. Instead of simply asking family and friends for their opinions on brands or recommendations for service providers, they turn to the web to search for online review platforms, consumer blogs and social media influencers.
And this is where many professional services firms are falling short. Instead of targeting Millennials on the platforms they prefer, they are using their online presence as nothing more than a promotional playground and the place to hang their digital billboards.
However, that’s not what will draw this generation (who grew up desensitised by ads) are looking for. They’re looking for validation from their peers who have tried the product, can photograph it, describe it and publish their judgments where others can view it – online. They seek services who have established relationships with their clients who are willing to share their experiences publicly on social media, online forums and review platforms.
And can you really blame them? After all, they grew up in a time when businesses who don’t have an online presence make them less credible and a lack of social media activity and engagement prove them unrelatable.
To jump-start your engines and enjoy a constant flow of referrals that you can convert into new clients, you need to set your sights on the demographic that has risen to command the most sway in today’s market. Focus your efforts online. Think beyond your website. Create a content strategy that is personalised and targeted. And above all, know your audience.
According to the 2017 Millennial Business Owner-Accounting Firm Survey, nearly half (42%) of millennial business owners want an accountant that can translate complex financial concepts into terminology and reporting they can understand. This doesn’t seem a hard ask and I’d say this same sentiment carries across t other professional services too.
Without doing the research and recognising this pain point, your firm would never have created content that resonates with the generation whose attention you now seek to make your business grow.