CRM - November 2008 - (Page 43)

The Matures Matures want a fuss-free, gimmick-free layout that doesn’t harp on age. Moschis says that Matures, out of other generations, are more likely to seek opinions of others before a spending decision. They want to know they’re going to get what they pay for, rather than be swindled or misled by ambiguous advertisements. Older shoppers are prone to convenience shopping; Boomers are after the deals. “WHEN I WAS YOUR AGE ” Remember when gas used to be a penny a gallon and a jug of milk cost a nickel? No generation has seen prices inflate over the course of its life as much as today’s Matures have. The rise in the cost of living may help explain why this particular generation is ill-prepared for the current economic hiccup. One survey, from online market research firm MarketTools, shows Matures leading— by far—as the group whose spending hasn’t been affected by changes in the U.S. economy over the last 12 months. (In fact, they’re almost twice as likely as everyone else to have somewhat increased their spending.) Online, At Last “Older Americans are the most affluent segment of the U.S. population,” writes analyst Paul Verna in an eMarketer report, “Baby Boomers and Silver Surfers: Two Generations Online.” “Internet usage among Baby Boomers and those over 60 has increased in the past several years, and it is expected to continue to grow.” According to the report, more than 10 percent (about 20 million) of U.S.-based Internet surfers are aged 62 and above. (This number, according to eMarketer, will grow to 25 million users by 2011.) Verna also suggests that older consumers over 60 are an all-too-often overlooked segment of e-commerce. “Their spending power and growing presence online should serve as a wake-up call to marketers who might have their sights set elsewhere.” An unrelated AARP study shows that those aged 65 and older are less likely than those between the ages of 45 and 65 to have taken steps to cope with a slowing economy or increasing prices. “This does not indicate that the older population is better off financially,” the AARP authors write. “Rather, the data suggests that the 65-and-over group had, even prior to the economic downturn, been forced to adjust [its] spending habits because of [its] work status, fixed income, and rising costs.” And the much-vaunted Golden Years may not seem to glisten as much at the moment: The AARP survey suggests that the majority of older people are spending less on dining and entertainment, and about half have postponed plans to travel or to make a major purchase. Moschis, in his marketing research for the Center for Mature Consumer Studies, suggests that Matures living off a fixed income are accustomed to budgeting and being more careful when it comes to spending. These Matures are not as vulnerable to a downturn because a lot of them don’t work, Moschis says—though unemployment is affecting their children. “The major impact I think it will have is if younger people cannot make ends meet and then the older generations help them out—including buying the first home.” FIXING ON FIXED INCOME Some suggest that this demographic is more adept at reining in spending as a result of its experience with so many economic downturns over the years. But Matures say their biggest financial concern is the unknown. Living off a fixed budget, they often have fixed financial plans. Fears of what could happen lead them to set aside some emergency cash, but Moschis notes that today’s Matures aren’t saving money as their predecessors did. “There’s a change in attitude toward life in general, and [toward] travel and leisure,” he says. “They feel more compelled to go out and spend money than previous generations.” There may also be a gender bias: A MoneyMood Survey from Legal & General shows that Mature women are the most likely to slow spending when financial times get tough. WHY ARE YOU SO QUIET? Ken Gronbach calls this generation of Matures The Silents, adding that, once they quietly exit the stage, the notion of “elderly”Americans will essentially disappear. Because Boomers will refuse to be tagged as senior citizens, and will reject all stereotypes defining the lives their parents led, people will soon look around and wonder about the sudden absence of what they always thought of as “old folks.” Gronbach notes, however, that consumption of the same types of goods will be the same—particularly with healthcare, pharmaceuticals, and elder-care facilities. What will happen as the Boomers enter this age group, he says, is that they will send the prices for goods and services typically consumed by senior citizens through the roof. “[The Silents] are passing through our system,” Gronbach says. “They have created their own footprint and it’s tiny— this is the generation that was barely 50 million people.” Yet generational spending experts seem to agree that marketing toward Matures is still profitable. And yet it’s a smaller target, with a smaller wallet. “In general, the median family income of the 65-plus population is less than half that of those aged 50 to 64, reflecting the loss of wage income after retirement,” says one recent AARP report, noting that Mature consumers typically depend on Social Security to cover half of their budgetary expenses. “The numbers reinforce the importance of Social Security and its role as the mainstay of retirees’ income,” the authors write. In the end, that might prove to be the spending touchstone of this generation, the last full cohort to subsist on Social Security before that program’s funding is tapped out. As Matures head into the sunset of their sunset years, the advancing Boomers will wipe the slate clean and rewrite the rulebook. So no more Life Alert ads for the Mature market—unlike yesterday’s Matures, today’s and tomorrow’s will be able to pick themselves back up again. Contact Editorial Assistant Lauren McKay at lmckay@destinationCRM.com. 43 www.destinationCRM.com CUSTOMER RELATIONSHIP MANAGEMENT | NOVEMBER 2008 Generational Spending 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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