Aptus Consultants

It is very easy to fall in to the trap of thinking that the online world is dominated by two groups of people, the young and the geeks. These are not segments which have traditionally been seen as ‘target’ for Life Pension & Investment products, and this is perhaps one of the reasons why the Financial Services industry, both manufacturers and intermediaries, have been so slow to embrace online consumer engagement tools when compared to other retail sectors.

So let’s have a look at some facts, starting with trying to dispel the age misconception:

• Home broadband penetration amongst the 45 to 54 age band is 72%, just above the national average. For 55 to 64 years olds it is 68%, while even amongst the 65 and above group it is over 30%.
• 34% of 45 to 54 year olds regularly upload photos to the web, 16% have written or commented on a blog and 13% have their own website.
• 19% of the UK users of Facebook are aged over 45.
• The proportion of 35 to 54 years olds have bought a product on line in the last 3 months (62%), is higher than the proportion of 16 to 34 years olds.
• 40% of 35 to 54 years olds have performed an online financial services transaction in the last 6 months.

I could go on but hopefully the above is enough to illustrate that the online revolution is affecting all of us, not just the kids. If you want further proof, along with information on how the types of online activity undertaken vary with age, take a look at the Technographics tool from Forrester.

Let’s now turn to the question of whether online consumers are geeks. One traditional measure is to look at the level of digital engagement by social demographic. For example, members of the AB social group are:

• More likely to have home internet access (85% v 76%)
• More likely to have home broadband (83% v 67%)
• More likely to have bought a product online in the last 6 month (62% v 50%)
• 34% more likely to own a Smartphone than average
• 36% more likely to bank online than average

However, a more revealing approach is to use a tool such as the Experian True Touch model. This segments consumers in to 6 groups based on their usage of different communications channels, and each of these can be further clustered in to one of three groups to show whether they are high, medium or low adopters of digital technology. Details of the different groups are shown below, along with a pie chart to show how the UK adult population splits between the 6 segments and 3 digital adoption groups.

As you can see from the pie chart, the UK adult population splits fairly evenly between the three digital adoption groups, with 34% being highly engaged, 31% in the middle group and 35% having relatively low levels of engagement. However, when you apply this same segmentation process to the top 20% of the UK adult population by wealth, a very clear picture emerges:

• About 50% of the wealthiest people in the UK can be categorised as being highly engaged with digital technology and online communications.
• Proportionally few of the wealthiest people fall in to the ‘Digital Culture’ group which comes closest to the definition of ‘geek’. This is not a surprise given that these people do tend to have a slightly younger, and therefore slightly less affluent profile.
• A massive 42% of the top 20% of wealthiest UK adults fall in to the Experienced Netizens group. These are “Established internet users who love the functionality of new technology and embrace new communication tools.”
• Only about 8% of the wealthiest people in to the UK would be categorised as low users of the new communications technologies.

So as we have shown, the web is not the preserve of the young but in fact permeates all of our lives irrespective of age. In addition, it is certainly not the preserve of techno geeks. Indeed, the one group which is a disproportionately highly represented in terms of online usage are high net worth individuals. Call me old fashioned but I always thought the financial services industry was interested in communicating with these people!