CRM - November 2008 - (Page 38)

Generational Spending The Boomers Experts differ on exactly how this shift will occur: Urbanization; relocation to warmer states such as Florida or New Mexico; and 55-and-over retirement communities all get mentioned. But with the ongoing crisis in the lending market, the assumption that Boomers can rely on their arguably biggest asset to help spur spending and retirement may be in question. “The housing market is a significant influence because it’s such a large holder of the percentage of their wealth,” Seitzinger says. “They’re deeply concerned about what’s going on [with this situation].” Essentially, Boomers need buyers for what they want to sell—and that’s not guaranteed, especially today. “Someone has to buy their homes for them to downsize, or to relocate,” Seitzinger says. “People being able to have financing…is a little bit in question right now.” Mincher, who is also a licensed real estate and mortgage broker, agrees. “Big houses are going to be a challenge,” he says. “Boomers may have to take less for their homes, which will force them to buy a much smaller or less desirable [place]. This can have trickle-down ripple effects.” No one can know for sure what will happen to the housing market in the next several years, as more Boomers reach the age of 65, but marketers should keep a close eye on the situation. “Inevitably, Boomer spend will be influenced based on where we land, long term, in the real estate [space],” Seitzinger says.“Every single one of those dollars that comes off the [bargaining] table will be one less dollar for [this group] to spend.” SOCIAL INSECURITY? Boomers’ current spending also turns on their future retirement planning—or the lack thereof. “It’s the hope that Boomers will save more, but getting them to actually do a retirement plan and think about this is difficult,” Thornhill says. For each of the last seven months, more than 75 percent of Boomers have said they are uncertain or disagree with the statement “I am saving enough to meet my future needs,” according to his research. Among Boomers in households with incomes above $75,000, 66 percent admit they’re not saving enough for their future. “Financial services are still faced with [this generation], which is in denial,” he adds. What Thornhill sees as denial may just be a streak of self-aware stubbornness: The MarketTools study found that Boomers were the most likely group to have saved “significantly less” in the last year on retirement. Despite the fact that experts say Boomers do not take on the same characteristics as preceding generations, they largely refer back to their childhood memories of spending. “When Boomers came of age, compared to their parents, they weren’t exposed to any kind of difficult or tough economic times,” Thornhill says.“Everybody was making money, purchasing products, and the banking industry invented credit cards. The impressionable young children saw demand consumption was good, credit was good—so why bother with savings?” Mincher also alludes to the fact that many members of the Mature generation worked, earned a pension, and coupled that with Social Security payments to make a comfortable life after retiring. The same may not be true for Boomers.“They look at people who retired 10 years ago, worked at, for example, General Motors for 30 years, have a pension, and live fine,” he says. “Boomers are complacent, but they actually need to plan for retirement.” For marketers, particularly in financial services, this can be a huge opportunity. Thornhill cites the Amsterdam-based ING Group, which offers banking, insurance, and asset management worldwide. In its “What’s your number?” campaign, answering a few quick questions at www.INGyournumber.com can approximate how much money you need before you can walk away from your full-time job. After finding out “your number,” you are then prompted to opt-in and access a financial planner. “The financial services category seems to have woken up,” Thornhill says. ING’s campaign, he adds, “is a pretty effective approach in reaching out to Boomers.” GLASS HALF FULL Despite the current doom-and-gloom about the state of the housing market, retirement, and savings, experts believe Boomers will be able to stay the course and at the same time change the way marketers target consumers. “[This generation] will continue to shape and influence the marketplace directly or indirectly,” Seitzinger says. “Boomers are sophisticated enough to rightsize their lifestyle based on their needs.” From bell bottoms to the boardroom, this generation always dictated the way it wanted to be dealt with—and that won’t change now. “The sun will always come up tomorrow, and things will be better,” is how Thornhill describes most Boomers’ worldview. “They’re very optimistic as a generation,” he says, though, again, he also suggests they may be in denial. Love them or hate them, this generation is special and will stay that way forever. As Thornhill puts it, “Boomers will be Boomers until the day they die.” Contact Editorial Assistant Christopher Musico at cmusico@destinationCRM.com. www.destinationCRM.com 10 Marketer Commandments When it comes to Boomers today, Matt Thornhill, co-author of Boomer Consumer, says there are 10 rules marketers must adhere to if they want to strike gold. “We haven’t found ourselves needing to change or modify any of these rules,” he says. “They’re not time-sensitive.” 1 | Treat everyone differently. 2 | Use emotionally meaningful concepts, words, and images. 3 | Be positive. 4 | Realize more information is better. 5 | Tell a story. 6 | Understand my changing values. 7 | Make it relevant to me. 8 | Play in the gray. 9 | Use life stage, not age. 10 | Learn, baby, learn. Source: Boomer Consumer 38 CUSTOMER RELATIONSHIP MANAGEMENT | NOVEMBER 2008 http://www.INGyournumber.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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