Frequently asked Questions (FAQ) regarding Successfully Marketing & Selling to Baby Boomer & Senior Customers

• Why do the pundits say that marketing is in crisis?

• Why are baby boomers & seniors so important to marketers?

• Why is the youth dominated markets still coveted by advertisers?

• Why could almost everything you think you know about marketing to baby boomers & seniors be wrong?

• What is the key to more effective marketing to baby boomers and seniors?

• Should I be marketing product or experience?

• Has the Internet Changed the Rules of Engagement for Companies & Customer?

• What changes do I make in my approach to be more effective in baby boomer & senior markets?
  

Why do the pundits say that marketing is in crisis?
Saying that marketing is in crisis is not news. The news is what is causing that crisis. Most know that these are harsh and unforgiving times in marketing. The ad business side of marketing had its worse year in history in 2002, and according to projections being made further business decline will give advertising its first -to-back negative growth years since the Great Depression. Everyone seems down on marketing. People are tuning out marketers' messages as never before. Consider some other random symptoms of marketing's problems:

• The rate of new product failures has risen to 80 percent or more, according to Bill Gorman' s New Product News.
• Customer loyalty is withering by many accounts, making one company' s customers easy pickings for another company.
• Consumer trust has gone south, according to Roper Starch.
• Customer satisfaction has never been lower, according to the University of Michigan's American Consumer Satisfaction Index.

What is the source of the grim picture in marketing? Why does the rash of symptoms plaguing their art baffle so many people whose livelihoods depend on marketing? Why can't companies with large budgets and talent solve their marketing problems? Why is it that with more information on customers than ever before in marketing history, companies are finding them tougher challenges to sell to?

There is a cornucopia of reasons given for marketing's problems, and certainly no shortage of ideas offered for their cure. Interestingly, explanations offered for marketing's travails generally exculpate marketers from any responsibility. Instead, marketing's problems are said to be the result of external conditions, like a well informed, more educated consumer population (presumably marketers are among the better educated, so why should there be a gap?). Other popular whipping boys include the astonishing range of choices that consumers have, ad clutter which disorients the mind, and of course the Internet.

However, one condition that arguably is playing the greatest role in marketing's horrendous derailment is rarely mentioned: the aging of society that is driving historic changes in the leading views, values and behaviors in the marketplace. In the process, this is radically changing the rules of marketplace engagement.

Until marketers come to grips with this historic event, customers will continue tuning out their messages on a massive scale and client companies will continue being skeptical of their marketing agencies. Madison Avenue is suffering from a generation gap between itself and the older, more seasoned and autonomous consumer universe that has emerged. Perhaps nothing else has done as much throw marketing off course.

Why are baby boomers and seniors so important to marketers?
America's 78 million baby boomers are aging. The first of them turned 50 on Jan. 1, 1996 and 60 on Januray 1, 2006. Fifteen years into the third millennium they will become the largest generation of retirees in American history. Moreover, the younger markets are shrinking and older markets are increasing. The Aging Profile in U.S. reflects:

• The 50 to 54 year age group experienced the largest percentage growth (55%) between 1990-2000
• The 45 to 49 age group experienced the second fastest percentage growth (45%) between 1990-2000
• The baby boom generation entered these 2 age groups between 1990-2000
• A baby boomer will turn 55 years old every seven seconds for the next 20 years
• This is changing the fundamental age distribution in our population. In 1900, only 13 percent of the population was age 50 or over. In 2000, it was over 27 percent. And, by 2020, it will be over 35 percent
• AARP's research shows that:
• 8 in 10 baby boomers plan to work at least part-time
• 5% anticipate working full-time at a new job or career
• Only 16% say they will not work at all
• 35% will work mainly for interest and enjoyment
• 23% will work mainly for the income
• 17% envision starting their own business

The 50+ age group:

• Is the fastest growing population segment
• Is the most affluent consumer group that exists
• Account for over 40% of total consumer demand
• Average $24,000 in annual disposable income
• Control over 48% of all discretionary purchases that occur
• Own over 80% of all money in savings accounts
• Own 79% of America's financial assets
• Spend almost $2 Trillion on goods & services each year
• Approximately 35,000 people turn 65 every month in U.S. This trend will reverse as the baby boomers (born 1946-1964) reach 65 starting in 2011 (first of boomers turned age 50 in 1996)
• Over the next thirty years, as baby boomers reach retirement, America's elderly population is expected to double—from 35 million to nearly 75 million.
• The U.S. Census Bureau projects a 75% increase in the population aged 65 and older by 2030, bringing the number of Americans in this age group to 69 million: more than 20% of the population. By 2030, there will be an average of 1 person aged 65 and older for every 3 persons aged 18-64
• The age group above 85 years old still showed a very high percentage increase (38%) between 1990-2000

Adults 50 and older are avid readers of newspapers and magazines-many read two or more newspapers a day and 84 percent read at least one newspaper a day, compared with 78 percent of the general population, according to Roper. In addition, 70 percent of adults 50 and over read magazines.

The increasing median age is driven by the aging of the population born during the Baby Boom after World War II (1946 to 1964). About 30 percent of the population in 1995 was born during the Baby Boom. As this population ages, the median age will rise. People born during the Baby Boom will be between the ages of 35 and 54 in 2000. In 2011, the first members of the Baby Boom will reach age 65, and the Baby-Boom population will have decreased to 25 percent of the total population (in the middle series). The last of the Baby-Boom population will reach 65 in the year 2029. By that time, the Baby-Boom population is projected to be only 16 percent of the total population."

Why is the youth dominated markets still coveted by advertisers?
Marketing's crisis owes much to the fact that too few people in marketing realize that New Customer Majority minds don't work the same as minds in the Old Youth Majority. Often marketing communications are tuned into the younger mind.

"Know your customer" is the first commandment of customer relationship management. CRM depends on databases and data mining to help companies "know their customers" . To "know your customer" includes understanding her in terms of her season of life. A 45-year-old is not just a 20-year older version of her 25-year-old self. The 45-year-old is typically less concerned about playing to the external world in her buying behavior.

Midlife developmental changes in behavior that members of the Customer Majority are experiencing challenges the view of marketing as a game of persuasion. The object of marketing has been to "capture" customers and overwhelm their wills. Power marketing is OUT. That's why so much marketing is not working. Adaptive marketing is IN. This oneness turns customers into co-creators of marketing success.

Why could almost everything you think you know about marketing to baby boomers & seniors be wrong?
Almost everything you think you know about marketing may be wrong because customers now control most markets. Companies held more sway over markets and customers when they controlled information about themselves and their products. Boastful advertising cannot compete with tales of real life experiences told online by customers. Customers once had limited recourse when a company displeased them. Knowledge is power.

Regrettably, markets past don't offer much help for succeeding in today's markets. Lessons on marketing meted out in business schools and learned on the job in the marketplace reflect decades of experience in markets dominated by the views, values and behavior of people under the age of 40. That makes almost everything you thought you knew about marketing wrong. In 1989, the year that adults 40 and older became the New Customer Majority , the validity of many ideas about marketing, that were shaped by experiences in youth dominated markets, began to fade. But not necessarily their influence on marketing.

Ultimately, the biggest challenge in marketing today is overcoming the momentum of old ideas made obsolete by the Internet and the New Customer Majority. Consider the old idea that youth is the ideal human state. In service of this bad penny, marketing experts repeatedly remind us that aging boomers hate the idea of aging, so base your marketing to them on the values of youth. Many studies indicate that people generally adjust well to aging

Marketing suffers from a pandemic of chronic youth syndrome (CYS). The truth is, many people in marketing seem more afraid of aging than most aging boomers are – or at least older boomers who have had enough time to work through their earlier midlife qualms about it.

In yesteryear's markets, marketers learned through trial and error that selling the rational marketing triad of product features, functional benefits and monetary value worked. In yesteryear's markets, marketers learned through trial and error that marketing was also a game of persuasion. However, product centered marketing is dead; say Joe Pine and Jim Gilmore in The Experience Economy. Like many others, Pine and Gilmore say marketing is now more about the customer experience than the product.

What is the key to more effective marketing to baby boomers and seniors?
More than thirty years ago Maslow said in Toward a Psychology of Being that highly matured people reflect "polarities and oppositions" in their behavior; strive to simplify their lives; experience changes in values; become more autonomous, and avoid extremes. Identity is the biggest single factor in customer behavior. These observations are customer centric taglines. Nothing has had more influence on how marketing is done than those values. Because these values play well in the New Customer Majority, there is a growing generation gap between marketers and the marketplace majority.

Perhaps no company has reflected better understanding of the midlife soul in its marketing than the New Balance. It became the fastest growing shoe company in America by connecting with the more temperate behavior of the New Customer Majority with its tagline, "Achieve new balance" . It is ironic then, that New Balance's popularity in the New Customer Majority has spread into younger age groups, according to Maria Stefan, Vice President of the Sporting Goods Manufacturers Association.

The rational marketing triad works better among the young because the young want proof. Ambiguity unsettles the young mind. The older mind often reflects aversion to the kind of unbridled explicitness that turns young minds on. "Shades of gray" perceptions of reality dispose the older mind to tune out bold, absolutist claims about products and companies. Members of the New Customer Majority are more relationship minded than the Old Customer Majority that was more categorical minded. This predisposes members of the New Customer Majority to respond quite favorably to companies that see them as whole people, not merely as prospects for a product or service.

Personalizing the customer experience is something that top people in sales have always done. It was only recently that marketers began thinking personalization as a marketing strategy. But despite all the experts on personalizing the customer experience that have cropped up, the real impetus behind the various "sects' of relationship marketing is an aging population. The quality of the buyer-seller relationship is more decisive among members of the New Customer Majority than it was under the Old Youth Majority. New Customer Majority buyers want companies they place their loyalties with to feel what they feel.

Until recently, the long-standing bias against marketing to older people was reflected by media trackers like Arbitron and Nielson. They reported only the media habits of people 49 and younger. When people turned 50, they no longer existed on Madison Avenue. It is actually easier to turn people in the New Customer Majority into loyal customers than it is young people. Training ad agency creatives in how New Customer Majority minds work will not only pay off in more effective marketing in 40-plus markets, but in younger markets as well.

Should I be marketing product or experiences?
Reaching midlife changes not only what people buy it also changes their purchase frequency patterns. The automotive and housing industries will also experience falling demand due to population contraction in key age groups. We can expect some growth from households headed by people aged 45 and older, but even total spending growth there reflects slower economic expansion than seen in the past.

Still, as the New Balance story, demonstrates, the New Customer Majority could be the salvation for many companies. It offers persuasive anecdotal evidence that the market reach of a product that is usually marketed primarily to youth and young adults can be dramatically expanded through segment busting strategies that give it an appeal to virtually all age groups. The customer experience is the key to success in securing a competitive advantage in today's New Customer Majority. Young people buy products. Middle age and older people buy experiences. New Balance identifies with the values of midlife in ways that give aging boomers the pleasurable experience of dealing with a company that understands them.

Has the Internet Changed the Rules of Engagement between Company & Customer?
The most revolutionary change the Internet brought to marketing is giving shoppers the means to learn from each about a product or company. Customer reviews of books, CDs, cameras, computers and other products pose serious challenges to advertising because customer-to-customer testimonies ultimately have greater power to influence shoppers and buyers than traditional advertising.

Some people simplistically preach that the most basic rule of all in marketing is "Know your customer" . However, how do you get to know your customer? Customers often are not the best experts about themselves. Ford fell into such a trap by following the guidance of customers who thought the minivan idea not a good idea.

What changes do I make in my approach to be more effective in baby boomer & senior markets?
Creating customer experiences that give a company a strong competitive edge is neither expensive, nor complicated. Meeting the expectations of New Customer Majority shoppers is not very difficult. The New Customer Majority loathes artifice. Some ad agencies are killing the ad business by continuing to ignore the New Customer Majority by pumping out advertising that was more suitable in the pre-1990s marketplace.

"My way or the highway" describes how the New Customer Majority feels about companies and brands. Success in today's buyers' markets demands enterprise-wide changes in mind set, from the executive suite to the mailroom. The shift from a product centric mind set to a customer centric mind set dramatically changes how both marketing and customers are viewed:

• Customers are no longer targets; they are humans to be served
• Marketing is no longer a game of persuasion; it is a service
• Customers are no longer data sets; they are human beings
• The focus is no longer on products; it is on the customer experience

Go with the grain of the brain. All purchases are driven by the buyer's emotions. David B. Wolfe, noted author, lecturer and expert in marketing to older consumers has developed an approach to marketing he calls "Developmental Relationship Marketing" . His approach to communications has as its foundation writings of behaviorists Abraham Maslow, Eric Erikson and current noted authors.

Eight Progressive Changes in How Aging Minds Process Information

1. Less reliance on reason to determine what is of interest, and more on intuition (which is cued by emotional responses).
2. First impressions (which are always emotionally based) are more durable and more difficult to reverse than for younger adults.
3. After a matter qualifies for interest and further attention, older consumers tend to want more information than do younger consumers.
4. Decreasing speed in rational processing of objective information.
5. More resistant to absolute propositions. Older minds resist hyperbole.
6. More sensitive to metaphorical meanings, nuances and subtleties.
7. More receptive to narrative-styled presentations of information, less responsive to information presented in expository style. Implications: Make greater use of story-telling techniques to get information across.
8. Perceptions are more holistic. Project an interest in the "whole" person, not just the facet that might need a particular company product.

The above characteristics should be seriously considered when developing communication and sales approaches for these populations.  The following will also be helpful:

Tap in on Nostalgia

• Strong Boomer hook
• Yearning for calm
• Love their Rock & Roll
• Janis Joplin – Mercedes-Benz
• Disco hits – Burger Kink
• Rolling Stones – Microsoft
• Beatles – GTE, Nike
• Sell to Boomers pining to recapture old thrills

Family Focus

• Boomers want to spend more time with children
• Desire traditional standards of:
• Good manners
• Family life
• Parental responsibility
• Want to do this in innovative ways
• Boomers look for enriching experiences:
• Shared by family
• In any setting
• Especially outside the home
• Want time to be a celebration not merely an accommodation
• Restaurants - special, formal, calmer & quieter
• Homes - family friendly kitchen serving as headquarters for family & guests  

Reduce Their Stress  

• Boomers the most stressed generation in history:
• Want to control only the most important things
• Willing to delegate one less:
• Problem
• Concern
• Headache
• Think of Honda "Simplicity" ads
• Boom in personal services continues
• Money management & Food shopping
• Household chores & Child care
• Security, etc.
• What not to do
• Be careful about technology that makes customers make even more decisions
• Too many choices online could be a problem

Reinforce the Strong Boomer Sense of Self-Reliance

• Boomers don't want to delegate being in control
• Growing need for simplification
• Continuing need to control e.g.,
• No-haggle pricing for automobiles
• One-rate for long distance services
• HMO's
• Provide simplicity & control simultaneously
• Boomers are demanding & want the truth
• Aggressive scrutiny helps them keep control
• Most likely to want data before they buy
• Most likely to seek advice
• Already owns product
• Consumer information services/reports
• Marketing strategies should reinforce the strong Boomer sense of self-reliance & individual superiority but don't require a lot of effort & participation on their part
• Mass customization a way to balance simplicity with control
• Custom Foot – a shoe store

Be Careful about Using the Word Senior

• Boomers think 79 is old
• Will avoid company products pitched to older consumers
• More subtle approach is required
• Dockers & GAP
• Continue to be attracted to romance & adventure

Help Them Find New Ways to Win

• Typically responsive to brands effectively positioned as choices for winners
• High energy foods
• Powerful, sleeker, sportier cars

Areas where Boomers don't want to win anymore  

• Concerned more with comfort than style
• Novelty for its own sake is out
• Brand names no longer badges of success

Help Them Find New Ways to Win

• Functionality is what Boomers now want
• Pizzazz will fizzle & function will flourish
• Let them know they are getting a good deal
• Boomers want to think they are winning shoppers
• Give them reinforcement

Retirement Not in Boomer Dictionary

• Retirement Not in Boomer Dictionary. Retread not Retire
• Don't view leisurely retirement as a reward
• Likely to start new careers
• Retirement approached as a work style not lifestyle
• Boomers cite work as primary way to express creativity
• Boomers may not have financial wherewithal to retire
• Boomers are work centered & will continue to focus on this
• Still looking for meaning & fulfillment
• Ned to reduce debt & plan for eventual retirement

Ads and sales approaches should be should be easy to read and be experiential in nature.  They should reflect empathy for the values of this demo in terms of your company products/services being a gateway to desired experiences of the targets.

Understanding how consumer's brains and mind processes information is a key to effective communications and increased sales. If a company ad or sales presentation fails to connect with a baby boomer's idealized image of self, it is more likely to be ignored. Finally, remember; don't focus upon selling the product. Instead focus upon selling your knowledge of the customer's needs and how your product is a gateway to helping them to reach their goals and desired experiences.

Making such changes in company think requires the power of executive leadership. A CEO must also be the CTO - Chief Transformation Officer, for no change can take place in company mind set to support a customer centric business model without the unequivocal commitment of executive leadership. Putting it as Bill Clinton's campaign manager James Carville would put it, "It's the Customer, stupid!"

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For more information on how we can help you to achieve great results with your baby boomer or senior marketing campaigns, contact us at info@comingofage.com, or call us at 630-462-7100.

Marketing, Advertising, PR/Media, Sales &
Service Training To Capture & Keep Baby
Boomer & Senior Customers

430 West Roosevelt Road
Wheaton, IL 60187
Phone: 630-462-7100
Fax: 630-462-8056
info@comingofage.com