CRM - November 2008 - (Page 36)

Generational Spending The Boomers spending. And with an estimated $1 trillion in annual buying power, these middle-agers are not afraid to open their wallets, says Kenneth Gronbach, author of The Age Curve. “Boomers are extravagant spenders,” he admits. That’s especially true now that most Boomers’ own children have moved out. “There’s a sense of ‘It’s my time again,’” says Sean Seitzinger, senior vice president and general manager for the innovation and consulting practice at Chicago-based Information Resources. “Boomers are struggling with being able to cater to their own needs and having so many alternatives and choices in how to spend time, go on vacations, what they eat, and the type of activities they do. As they have in every other stage of [their lives], they will define the market based on their needs.” A DIVERSE ARMY Marketers may see the Boomers as a single group, but their births were strewn across the 1940s, 1950s, and 1960s—which means they’re now in their 40s, 50s, and 60s. That series of ages spans everything from having school-age children to empty-nest syndrome to grandparenthood. “Most Boomers are in the process of either starting or finishing sending their kids off to college, and have been able to pay for their homes,”Seitzinger says.“However, these people are much different than the last 50-plus age group. They are not homogenous but are rather extremely diverse.” Mincher agrees, using the term “Sandwich Generation” to describe the plight many Boomers face today: “They may be taking care of both elderly parents as well as their own children,” he says. (It’s a circumstance they share with some of the older Gen Xers coming up behind them.) As an example, Mincher recalls a man in his early 60s who held a doctorate and worked in the pharmaceutical field. “He still financially supports three grown children, plus his mother-in-law, all on his Ph.D. pension while his wife still works as a teacher,” he says. “I think the guy would love to travel a bit more. He should be in the twilight of his life, and enjoying life.” Calling it a “double whammy,” Mincher predicts supporting the generation pre36 ceding and following Boomers will not be an uncommon occurrence. Another piece of conventional wisdom he dismisses is the idea of a conventional retirement. “Boomers will end up working longer and waiting to retire,” he says.“They may even [leave their full-time position] but keep a part-time job, because medical care is keeping people alive longer.” For those trying to tap into the needs— and wallets—of Boomers, this means segmentation, segmentation, segmentation. “Marketers must understand the nuances and needs of this consumer group as opposed to all the others,” he says. ‘HEALTHY’ SPENDING PATTERNS While Boomers may exhibit a healthy diversity among their life situations, being healthy may be their one commonality. “The driving motivation for Boomers over the next 40 years is going to be spending time, money, and effort to maintain vitality,” Thornhill says. “‘How do I stay vital until I take my last breath?’ No one wants to have a slow, steady decline into old age and think their best years are behind them and [that] they’re over the hill.” Physical vitality—including health, wellness, and appearance—is a tremendous opportunity, Seitzinger says, and one that marketers are missing out on right now.“Look at discount pharmaceuticals and solutions focused on diabetes, healthy hearts, and pain management,” he says. “These are all very large Boomer market opportunities.” Health and wellness not only means medicine to avoid illness, but also physical vitality to keep looking good. Whether that means walking into a hospital to get a nip here, a tuck there, or some Botox to eradicate crow’s feet—expect Boomers to invest in staying fresh and clean, so they can continue to pursue the finer things of life. “[This generation] is focusing on health and wellness, but it is balanced with an indulgence trend,” Seitzinger says.“You have this health theory, but then they want more unhealthy food to even it out.” Instead of running to the plastic surgeon, many will run, lift, and sweat away the stress of 40-plus years of life. “Boomers are the generation back in the 1970s 8 Common Boomer Myths 1 | They’ll Sit Down, Exhale, Retire 2 | Understand One Transitioning Boomer and You Understand Them All 3 | Boomer Consumers are More Brand-Loyal 4 | 65 Is the Witching Hour When We Turn Old 5 | Boomers Are Rich 6 | Social Security Will Be Enough 7 | Technology Belongs to the Young 8 | Boomers Can Do Only One Thing at a Time Source: DMW Worldwide LLC and early 1980s that started the fitness craze,” Thornhill recalls. “When they got out of college, they said ‘Wait, we want to keep playing’ and Nike came along…. The whole fitness craze happened.” Just as Boomers influenced the mass adoption of fitness centers across the country, Thornhill predicts we’ll see the same when it comes to staying sharp mentally. “It’s kind of a brand-new category,” he says. “They’ll spend money on things keeping the brain supple and exercised.” He may be right: Nintendo’s Brain Age is a popular example of a growing market for educational games not aimed solely at small children. Revenue in 2007 for the brain-fitness software market climbed to $225 million, up from $100 million in 2005, according to SharpBrains, a San Francisco–based research and advisory firm tracking the cognitive fitness market. Of all the ways Boomers try to stay vital, Thornhill notes that Boomers are particularly attuned to their medical health.“If you don’t have your health you don’t have anything,” he says. “Nothing else matters. If you have a [medical issue], everything else takes a back seat to that.” “I expect to continue seeing higher levels of spend on health and wellness,” Seitzinger says.“That’s pretty high on the list…for these consumers.” www.destinationCRM.com CUSTOMER RELATIONSHIP MANAGEMENT | NOVEMBER 2008 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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