CRM - November 2008 - (Page 42)

Generational Spending The Matures people’—that is not good marketing,” says George Moschis, marketing professor at Georgia State University, director of the Center for Mature Consumer Studies, and author of Baby Boomers and Their Parents. “If you buy the product, every time you use it, it’ll remind you that the reason you use it is because you’re old,” he adds. And no one wants a constant reminder of that. But you can target Matures without resorting to negative connotations. An older consumer sees a middle-aged person selling arthritis medication and thinks about using the product not because she’s old— but simply because she has arthritis. Marketers need this kind of mind-set, Moschis says—but there are potential pitfalls. THE FEW, THE PROUD—THE MATURES The Mature generation is a relatively small demographic within today’s United States population—fewer than 50 million—and contains those born in or before 1945. That’s anyone over the age of 63, a lifespan that covers the first manned space flight, the Cuban Missile Crisis, and an economic boom that put a TV set in every household and a car (or three) in every driveway. But these Matures also witnessed a significant change in what’s considered old, not least because of an extension of human life expectancy. Although 65 remains (for now) the typical age for Social Security and retirement, the notion of “old” seems to be in perpetual flux: After watching a 67-year-old equestrian in the 2008 Olympics, it’s easy to conclude that age is, after all, just a number. “One day we’ll look around and say, ‘Where’d all the really old people go?’”says Ken Gronbach, a generational marketing expert and author of The Age Curve. Within the next few years, he says, the elderly population will essentially dissipate, partly due to the rise of the aging Baby Boomers, who will resist being shunted to the Mature category. Still, there are enough of today’s Matures—and they’ll be sticking around long enough—to make it worth your while to understand how they spend. LISTEN TO YOUR ELDERS You’ve got Lesson #1: The Matures don’t want to be depicted as helpless. So how do 42 Matures, if marketed to correctly, can provide a great deal of value, including brand loyalty and the desire for security. you connect with older customers and target their spending habits? Does an increased emphasis on independence, mobility, and vitality mean less pennypinching, or more? Moschis points out that these Matures can vaguely recall stockpiling canned goods from Depression- and WWII-era childhoods, so they’re accustomed to making do and getting by. That’s enabled many of them to accumulate significant savings, but they’re not hoarding as they once did. For one thing, seniors no longer save as much to pass along to children and heirs. Instead, they’re spending their money while they’re still with us. One big chunk of the budget still goes to gift-giving—but in the present day rather than as some future bequeathment, and intended for a different generation: A recent report from Grandparents.com and Focalyst shows that billions of dollars are spent on grandchildren each year—in fact, close to $1,700 per every new grandchild. But with longer, healthier lives comes robust post-retirement activity: Until recently, at least, Matures were spending more on leisure and travel than the elderly ever had before. They’ve also shown they’ll use savings to maintain their preferred way of life. Whether that means spending on health and wellness, renovating the home to suit a more sedentary lifestyle, or moving into a more-upscale retirement community, the Mature generation is certainly one that, if marketed to correctly, can provide a great deal of value. If they remain old-fashioned in one respect, it’s one that can play in your favor: Key spending characteristics of the Matures include brand loyalty and the desire for security. Security could also be read as selfsufficiency, Moschis says—and that’s perhaps the only reason Matures tend to apply the brakes. “One thing that keeps people from spending as much as they would like to is the fear of being dependent on others,” he says. Matures dread having to rely on their children. They worry about failing health or other unforeseen events that they have not accounted for financially. Another critical difference lies in the Matures’ perspective on homeownership, Moschis says.“A home is the younger person’s sign of success, the older person’s sign of independence,” he writes in his book. Moschis also notes that older shoppers tend to be more loyal in general—less willing to take risks with new products or brands. Partly due to a comparative lack of mobility, an older shopper is also less likely to go to great lengths to bargain-shop. CUTTING DOWN AND CUTTING OUT However, C. Britt Beemer, chief executive officer of America’s Research Group and author of The Customer Rules, says that the older the shoppers are, the more likely they are to use coupons. Print coupons, that is. Surveys show their most-frequent form of entertainment remains the newspaper, and that they read newspapers and print materials more than do consumers whose lives have always known electronic alternatives. As a result, print advertising remains an important way to reach the Mature generation—and to some degree achieve a default segmentation. “The percentage of older people who read the daily papers is double that of their children,” Moschis writes. Newspapers are a physical medium—Matures are able to go back and revisit the paper copy, taking as much time as needed to suss out the meaning of the written material. With television, on the other hand, messages are often missed (unless a TiVo or other digital video recorder is connected). Only clear, easy-to-read advertisements convince Matures to buy, Beemer says: Whereas Generation Y wants to see spectacular marketing featuring young people they resemble, www.destinationCRM.com CUSTOMER RELATIONSHIP MANAGEMENT | NOVEMBER 2008 http://www.Grandparents.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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