CRM - November 2008 - (Page 33)

Generation X Creative Destruction? Slacktastic! The concept of creative destruction, as popularized by Austrian economist Joseph Schumpeter in 1942, serves as the backdrop (not to mention the subtitle) for Lisa Chamberlain’s Slackonomics. She describes it as “how capitalism renews itself through seemingly sudden economic convulsions. Stagnant industries are destroyed and people get hurt in the churn (think [the] demise of General Motors), while creative ideas and new industries—driven by entrepreneurs—are able to flourish (think Google).” As the generation that bridged the analog and digital worlds, experienced back-to-back economic bubbles and their eventual bursting, and has contended with income inequality, outsourcing, and so much more, Gen X both uses creative destruction and rides its tides. Burned by overeducation and underpayment, Gen X is a heavily entrepreneurial generation. between a rock and a hard place. Money and time are dedicated to those issues before others in many cases. “Many Gen Xers say paying down debt is a higher priority than saving,” writes Jonathan Craig, vice president of investor services at Charles Schwab, in an October 2007 article on gather.com. “Reducing debt is important but starting to save for your goals now will make achieving them easier. After you’ve made your minimum debt payments, consider splitting additional money evenly between saving and debt reduction.” That doesn’t mean Xers won’t spend, though. “The mass of Gen X emphasizes quality over quantity,” Chamberlain says. “We went in the Dwell magazine direction: quality, comfort, and design. Gen X families are willing to live in a smaller space if it means comfort or convenience. This generation hates spending time and money on commuting. It helped fuel the revitalization of cities; it’s not willing to ‘drive until you qualify’ [for a mortgage].” Perhaps, but Xers are also buying and improving houses—in fact, they’re the main group doing home improvements, according to the Joint Center for Housing Studies of Harvard University. Its research indicates the top ages for remodeling are when homeowners are between 35 and 45—and that’s where Gen X is. Boomers hold the lead in total spending because they’ve been doing it for longer, but Xers spend more per household. “These general spending patterns make sense, as they correspond to different needs in a household’s life span,” www.destinationCRM.com writes Amal Bendimerad, author of “Understanding Generational Differences in Home Remodeling Behavior,” the October 2005 Harvard study. “By middle age, households have been formed, income is more stable or growing, and discretionary income is higher. Overall, these are typically years in which families have been formed and the home is a greater priority. Safety, aesthetics, increased space, and energy efficiency—all major reasons for home-improvement projects—are high priorities for families at this point in the life cycle.” “I don’t want to sell anything, buy anything, or process anything as a career. I don’t want to sell anything bought or processed—or buy anything sold or processed—or process anything sold, bought, or processed—or repair anything sold, bought, or processed. You know, as a career, I don’t want to do that.” —Lloyd Dobler (John Cusack), Say Anything (1989) THE REST OF THE SHOPPING LIST Green products are one place where Xers will be spending more money than the younger generations will, though not as much as Boomers will, according to stats gathered by Alliance Data regarding domestic product purchases. For example, 49 percent of Gen X respondents would probably or definitely buy environmentally friendly paper products, compared to 38 percent of Gen Y and 56 percent of Boomers. Laundry products showed an even wider disparity: 53 percent of Xers would buy green detergents, versus just 37 percent of Gen Y and 62 percent of Boomers. Interestingly, this trend reversed when it came to baby products. While 21 percent of Xers and 18 percent of Boomers said they’d probably or definitely buy environmentally friendly baby products, Yers said so 34 percent of the time. On the one hand, Boomers have largely aged out of the part of life where they’re buying baby diapers and formula, and Xers’ biological clocks are winding down as well. On the other hand, Gen X is experienced in familybuilding by now, while Gen Y is just starting out—ideals might give way to convenience once its members have had a taste of parenthood. So, does this mean Generation X will be content with thriftily improving their homes the green way, while saving for their kids’ college and their own retirement, and helping their parents cope with the twilight years? Not likely. Remember, X is the individualist generation, one teased by dreams of yuppie affluence and raised during a time of accelerating technological innovation. Therein lies the key: Serve Xers something innovative, and they will buy. “The only way you can grow a business with Generation X as a primary customer is to have a brand-new product or service,” Gronbach writes. Among the products embraced first by Gen X over the years are the personal computer, the cell phone, the BlackBerry, portable GPS, snowboards, and now the iPod. “If your product or service has an established infrastructure that was meant to meet the demands of Boomers, who have since aged out of your market and been replaced by Generation X, you have a problem. However, if you have a new product or service that is targeted at the current Generation X age demo, the fact that they are a small generation following a big one doesn’t mean a thing.” Contact Senior Editor Marshall Lager at mlager@destinationCRM.com. 33 CUSTOMER RELATIONSHIP MANAGEMENT | NOVEMBER 2008 Generational Spending http://www.gather.com http://www.destinationCRM.com

Table of Contents Feed for the Digital Edition of CRM - November 2008

CRM - November 2008 Contents Front Office Feedback Reality Check Customer Centricity The Tipping Point Working with the Years CRM on Twitter Virtual Spenders Contact Centers Chatting to Success The Complexity Chasm Required Reading Generational Spending: A Special Report Who, What, Where, When, Y The Slackers’ X-cellent Adventure The Boomer Boom The Matures Endure Boosting Productivity North of the Border Changing the Channel Invicta’s Thrill of Victory Secret of My Success Connect Re:Tooling Pint of View

CRM - November 2008

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