Triple Bottom Line: What You Need To Know About Millennials

,
Triple Bottom Line: What You Need To Know About Millennials

“Kids these days…..” It’s a sentiment that is often passed around. Youth of today are often stereotyped as “lazy, entitled, and self-centered”. It is often stereotyped that some don’t have the drive of previous generations. Some think they are too idealistic, that their goals are impossible.

Well, I’m here today to tell you that maybe the problems aren’t with them. Maybe, as a group, millennials are just misunderstood. Millennials aren’t the same as previous generations. They were raised to think very holistically. With that upbringing came the awareness that every decision has an impact on the world in some way. Everything is an experience. Every decision makes an impact. Especially, when it comes to investing and consuming.

What do the members of the millennial generation really care about?

The truth is, they care about a lot of things. They want wealth, just like their parents and grandparents before them. Millennials also want to be stewards of the environment; protecting it, and bringing ecosystems back to full-strength. They want society to be fair and equal. The generation wants balance in what is known as the:

Triple Bottom Line

So, what is the “Triple Bottom Line” anyways? Triple Bottom Line (TBL) refers to an accounting framework that takes into account social, environmental, and economic performances instead of simply focusing on financial performance.

Previous generations were largely unaware of the severe impacts their activities were having on the environment. As a result, the environment was paid very little concern. Decisions were short-sighted and investments often were made in environmentally harmful industries. While investing in these industries is likely to pay off financially, the non-financial impacts of these investments have been extremely harmful. Thanks to environmental awareness, younger generations know that some industries (like oil and gas) have hugely harmful impacts on the world. With this knowledge, some are less likely to invest in something that, while making them a profit, will severely harm the environment.

Millennials also care about the social implications of investments and business decisions. They grew up in a turbulent time, seeing people lose their homes, jobs and savings in the 2008 recession. They saw the social impact that decisions by big bankers had on the average person. Millennials care about the social impact of decisions as well.

The youth of today have learned from their parents and grandparents missteps, with many thinking in a more holistic sense. Do you want to sell a millennial an investment portfolio (or convince them to use your business)? You will have to show them that your environmental and social performance is just as important to your company as your financial performance.

Environmental Performance

To have a chance at really attracting young clients to your advisory practice, you will need to demonstrate that you understand and are able to empathize with them. Many young people today believe sustainability is a core business concern. If you want to attract millennials to your business, you could make sustainability a part of your brand.

Millennials would pay slightly more for eco-friendly products (Pew Research), and that logic should carry over to investments. If you can show millennials that you wish to make a positive difference in the environment, you can align yourself with their interests, wants, and needs. This method of alignment is much easier (and more effective) than simply by promoting pure wealth. “Green” investment packages, with no oil, gas, automotive, or tobacco investments, should be quite attractive to some millennials.

A major issue that has to do with branding your environmental efforts has to do with “greenwashing”. If you claim to offer environmentally friendly products, or investment packages, but simply repurpose another product and claim it to be green, millennials will notice. The group has grown up in a time of unprecedented environmental awareness, and it will damage your brand’s reputation if you are perceived as greenwashing.

One way to use causes to help attract millennials to your business is through content and branding. It may help to share your views on being inclusive, open-minded and environmentally conscious. If you genuinely believe in doing right by your clients, this branding should come easily, positioning their core concerns as a part of your business.

Social Performance

A major critique of millennials is the sentiment that “they are all special snowflakes”. The generation cares about others. They want people to be treated the way they want to be treated and called what they want to be called. They want people to not be discriminated against based on who they are.

Millennials really care about cause-related initiatives. They will respond positively when a company takes interest in a social or environmental cause, with 75% of millennials saying it’s important that a company gives back to society. Millennials have surpassed simply wanting help in supporting causes and are starting to demand that others, especially companies, do their part. If you do your part, you will be rewarded.

Millennials will appreciate your commitment to environmental and social responsibility. After learning that a company is socially or environmentally responsible:

  • 83% are likely to trust the company more
  • 79% are likely to purchase that company’s products
  • 74% are more likely to pay attention to that company’s message because it has deep commitment to a cause

An excellent example of a company using positive social influence to sell their product is Toms (a shoe company). Toms does their part in giving back to society, giving a child in need a free pair of shoes for every shoe sold. This is a core aspect of the company and a contributor to its rapid growth. Millennials want  the world to be a better place. By offering investment opportunities that focus on socially responsible industries, companies and bonds, you may be able to sway a millennial to invest with you. Maybe for every dollar you make in fees (from a certain package) a portion gets donated to a village in need. Maybe you have your own idea to make social responsibility a core part of your investment options. As long as you are genuine about the cause, social responsibility should come easy.

Economic Performance

There is a reason why economic performance is the last (and very much least) of the three categories. Every business tries to have a competitively priced offering with a well developed business case. This will not help differentiate you from your competitors. You still need strong financial arguments, because very few people will willingly take a very bad deal simply because of the quality of environmental and social benefits.

At the end of the day, these millennials want a financially successful future. They want to own homes. Millennials want to be able to take long vacations and travel the world. They will need a strong financial portfolio with fair prices to achieve these goals. In this category, millennials are not much different from previous generations.

So, in order to cater to the youth of today (and tomorrow) you will have to think about aspects of your business that are non-financial. One way to connect with a millennial is through content marketing. Discuss your own passion for a cause on your blog, or create another form of content that speaks to their needs or interests. This may intrigue a young investor, motivating them to start a conversation with you about that topic.  Offer environmentally friendly investment options, and show that you and your business care about making the world a cleaner place. Then, write, speak, dance and sing about those topics, posting the resulting content to your blog.

By making business decisions that have minimal adverse social impacts, and being conscious to social issues, will help open a discussion with youth. Simply offering better prices or rates has been the end-all be-all tactic of attracting new clients. That time is coming to the end. Modern youth don’t simply make decisions based on the 4Ps (price, product, promotion, place). There is a social decision-making model in place that is revolutionizing business.

Attracting Millennials

To attract millennials, you will need to demonstrate a strong commitment to social, environmental and, economic success. Your content strategy should involve creating content about subjects that millennials value, are interested in, and that relate to their financial challenges. For example, you could create content on getting out out student debt, or educate them on financially literacy. 

Speak in the currency they value; learn about their goals and passions, where they are in life and what they want to do with their life. They value experiences over all else, so develop alternative strategies to attract their business. As a financial advisor, your topic is wealth and management. However, you can place it in the context of what Millennials value — experiences, or the experiences that they will miss out on should they fail to manage their money. Instead of writing about retirement planning or to buying a house, you could write about saving for a vacation or starting a non-profit.

Tie experiences back to social and environmental responsibility and you will be in a great position to build trusting relationships with millennials.

—————————-

What do you think about our reasons to consider the triple bottom line in your advisory firm? Do you agree with the sentiment that youth of today are fundamentally different from previous generations? Will the kids in school today be fundamentally different from the millennials? Let us know your thoughts on Twitter @VeridayHQ. Remember, soon the youth will inherit the world’s wealth. It’s time to cater to them.