For almost a quarter of a century we’ve advocated the wisdom of David B. Wolfe author of Serving the Ageless Market, Ageless Marketing, Firms of Endearment and Brave New Worldview. We practice his teachings (known as Developmental Relationship Marketing or Ageless Marketing) to help clients secure and keep customers more than 50 years of age (Baby Boomer and older customers). The foundation of much of our success, and the success of our clients, clearly is a result of David’s lessons and is worth sharing.
– Jim Gilmartin
The Foundations of a New Marketing Paradigm
By David B. Wolfe –
By many accounts, marketing is facing its greatest crisis ever. Many attribute this to the Internet. Certainly the Internet has played a major role in marketing’s current travails. However, like a beautiful lake whose waters have receded to reveal an ugly bottom filled with detritus of a thousand types, the Internet has revealed a host of problems that have long existed below the placid surface.
No category of business expense contains as much waste as consumer research and marketing. The amounts are astonishing. Raj Sisodia, my coauthor of Firms of Endearment figured that companies spend about $11,000 each year trying to get sales from his family of five. In all, marketing related activities cost companies about $500 billion annually. Just on intuition, I’d speculate that figure is double what it should be. That claim is not as outlandish as it might seem. Starbucks became an international brand without advertising expenditures, the single biggest expense in many companies’ marketing budgets.
Marketing is economically inefficient because it operates more as a game of chance than as a scientifically well-grounded discipline. Few would submit to a surgeon’s knife, cross a bridge or get on an airplane if medical, engineering and flying professionals who approached their roles as though playing games of chance. Think of the children’s game, Pin the Tail on the Donkey, and you have a good idea how blindly the profession of marketing is acted out.
The biggest, and to me the most obvious, flaw in marketing is the pervasive impoverishment of knowledge of the fundamentals of human behavior. As I’ve said before, an MBA candidate can get an MBA in marketing without taking a single course in human behavior. The currency of marketing is expressed in numbers, not tenets of behavior. That flabbergasts friends who are not in marketing. They cannot imagine marketing being anything other than the applied application of behavior science in a business context.
To the degree that students delve into behavioral science in business schools, their efforts are directed more to social psychology than to other, potentially more fruitful branches of mind science. Social psychology, as presented to business school students, deals primarily with the interactive influences of people on each other. Other things get stirred into the broth, but academics look at consumer behavior through the lens of social interaction.
On its face, social psychology seems like it is a worthy platform offering in depth understanding of consumers’ behavior. However, two factors seriously limit its value in marketing. First, social psychology heavily relies on self-reports by research subjects. The dubiousness of this is reflected in high failure rates among marketing campaigns that rely on consumers’ self-reports. New product failure rates reach 90 percent according to some studies. The cost of failed product introductions is staggering. One study revealed that each year, retail grocery stores spend an average $956,800 per store to introduce new products that will fail.
Recent brain research supports what cognitive scientists have been telling us all along: people don’t know their own minds very well. Brain scans indicate that as much as 95 percent of the mental activity underlying our perceptions, thoughts and decisions takes place outside the cognitive reach of our conscious minds. But because we tend to get uncomfortable if we don’t have a picture in our conscious mind that makes sense and seems real, we often construct images in our minds of a faux reality just to feel better.
The Most Influential Force on Consumer Behavior
People vary enormously in how much congruence they achieve between images of apparent reality in the conscious mind and images of true reality in the deeper reaches of the brain. The degree of congruence depends on many factors bringing us to the second shortcoming of social psychology as applied to consumer research and marketing activities.
Social psychology as applied in consumer research and marketing is contextually deficient. Its primary context is social – hence its name. However, human behavior at its core is not social. It’s personal – primitively personal. All behavior begins with conatus – the natural tendency of a body to seek persistence of its life and to develop itself to its maximum potential expression of self.
I’ve described conatus as the “most influential force in consumer behavior.” If that is true, then it should be the most influential tenet of behavior in consumer research and marketing. Conatus is the driving force of self-preservation behavior. It is not an expression of social forces, but like the sex drive, is an expression of our genes activated by proteins formation on behalf of individual and species survival. Lest that sound too reductionist, I should quickly add that social forces do influence how we respond to the self-preservation imperatives that lie at the roots of all our behavior. So, indeed, the romance is real and the love that others have for us does influence how we express the imperatives of conatus in our lives.
Marketers tend to be distracted by undue focus on social influences on consumer behavior. By tradition, marketing excludes attention to the primitive and more powerful forces of conatus. However, it is not possible to fully understand even the nature of social influences on consumer behavior without grasping the basics of conatus.
The Coming of the Age of Aquarius II
Who would not jump at the chance to know the mind of the market for an age cohort, or even more broadly, the market at-large, twenty years into the future?
Pushing aside concern about sounding immodest, I framed the mind of today’s Baby Boomer markets nearly 20 years ago. I did so in my book “Serving the Ageless Market” (McGraw-Hill 1990). Subsequent to that, I predicted that the behavior of consumers in virtually every age group would be influenced in major ways by the worldviews, values and behaviors that are characteristic of aging Boomers today.
My predictions in 1989 about how Baby Boomers would handle their own aging sharply conflicted with what was then conventional thinking. With some editing for brevity and clarity, here is a sampling of what I wrote then:
“Many observers are predicting that in later life Boomers will be frozen in a kind of adolescent stage of self-absorption. Widely quoted gerontologist, Ken Dychtwald, said in an Advertising Age interview, “There is every indication that most generations grow up and out of the ‘me generation.’ Boomers don’t.”
Like a reformed scarlet lady, Boomers are finding it hard to live down their “me first” reputation. No allowance is made for personal growth into higher levels of maturity. “Many “experts” predict a dark and selfish old age for Boomers. No generation in history will be as filled with angst about aging as Boomers will be.
The idea that Boomers in the early years of midlife don’t like the idea of “old age” is not unique. It happens that way in every generation. But people generally get beyond their midlife anxieties about age as the years pass.
Most Boomers are not destined to experience relentless regret over spent youth in their later years. Predictions to the contrary fly in the face of a large body of research into adult psychological development, and deny the work of such luminaries in adult development as Carl Jung, Erik Erikson and Abraham Maslow.
As Boomers troop into the Fall and Winter of their years, many are revisiting the idealized views life they had in their late adolescence and early adulthood. They have begun asking themselves perennial midlife questions such as, “Is this all there is,” and “what is the meaning of my life” and “how will I be remembered (legacy)?”
The same generation that generated great upheaval in traditions in the 1960s and 70s has led us into a neo-traditional movement. Boomers are taking us back to “basics” after they led society away from them in the Age of Aquarius I. We are now in the beginning stages of its sequel: The Age of Aquarius II, which turns much of what was once put down as “New Age” nonsense into mainstream convention.
The New Age movement is not a fad that Boomers will grow out of. It is an approach to life that many will get into deeper as they age. Optimal marketing success in aging Boomer markets depends on understanding this.
New Age thinking revolves around the idea that all things are of a piece, that no one thing is separate from all other things. This imposes on us an obligation to regard our place and time on earth as an office to be filled with a sense of responsibility to all life and the planet we live on.
I asked Nancy Peppard, about what Boomers are going to be like in the future as members of the maturity market. “I think New Age thinking is something marketers interested in older markets need to take a long look at” she said. I don’t mean the Shirley MacLaine kind of thing. The so-called New Age movement of today began 20 years ago . . . and has become part of our culture and it has grown with time. In both subtle and overt ways it now affects many facets of our daily lives.”
From Peppard’s point of view, Boomers are projecting unique behavior. In some regards, I agree with her, but in a larger sense, Boomers are not unique. They are traveling the same path toward maturation that people in midlife have done for millennia. In comparisons with previous generations, Boomers are unique mainly in the opportunities they have for developing themselves toward the Maslovian goal in later life of “being all you can be.”
So What is Ageless Marketing?
I am asked from time-to-time about what I mean by “ageless marketing” and how is ageless marketing different from boomer marketing, senior marketing, or as the Japanese often refer to marketing to older people, “Silver marketing.”
In the early years of television, Nielson just provided household ratings without reference to age. Then, encouraged by ABC, a struggling young network at that time that had a smaller but younger audience than its two established competitors, Nielson added the Adult 18-49 demographic to its regular reports.
So, there we have it. Age-based advertising, which is often counterproductive in today’s marketplace, was created to give an also ran network in the early 1960s that had the youngest audience a perceived advantage over its competitors. ABC’s main pitch was “Get them young and before some other brand gets them.”
The only problem with that pitch is that age correlates poorly with customer loyalty. In fact, the young are notorious for their fickleness. Nevertheless, ABC’s pitch worked and Madison Avenue invented age-based marketing.
The emergence of what I call the New Customer Majority has left Madison Avenue up marketing’s creek without a paddle to steer back into today’s mainstream consumer population. That presented marketers a big challenge. Everything they had learned about consumer behavior was learned when the young ruled the marketplace. Their behavior is much different from that of older consumers who now are the adult majority.
The problem with age-based marketing is its exclusivity. Older people don’t want a brand that reflects immaturity (Pepsi) and young people don’t want a brand that reflects maturity (Buick – although Buick has made some gains recently in bringing down the average age of its customer base).
The alternative to age-based is ageless marketing – marketing based not on age but on values and universal desires that appeal to people across generational divides. Age-based marketing reduces the reach of brands because of its exclusionary nature. In contrast ageless marketing extends the reach of brands because of its inclusionary focus.
To avoid any misunderstanding, I need to say that targeting specific age groups remains a valid marketing gambit. One of the nation’s most successful ageless marketers, New Balance, does not ignore age. While the core values it reflects in its general marketing are ageless, it targets specific age groups through media selection, content in selected messaging, and in how it manages its channel relationships.
Companies with a portfolio of products that are suitable across a wide age spectrum and that are stuck in the age-based marketing mindset of the 1960s need to broaden their reach by transitioning to ageless marketing. Why? Because the country will continue getting older for the next 15 years or so. The New Customer Majority is where both the demographics and the affluence is.
Many companies should evaluate a compromise between age-based marketing and ageless marketing: life stage marketing.
Generically, life stage marketing is not a new idea. But when marketers talk about life stage they virtually always mean social stage, examples of which include school graduation, starting a career, setting up a household, marriage, children, last child moving out and retirement. Life stage in the context I use it refers to psychological developmental stage.
Developmental stage marketing combines the inclusionary objectives of ageless marketing with the exclusionary boundaries of age-based marketing.
For example, invoking a company’s genuine concern for the environment is a value that speaks to people of all ages – including children who bring home what they have learned about the environment at school. They can be very influential on Mom’s buying decisions in certain categories. When that same company presents its message with strong, dramatic graphics – a message that shouts at you – it will be targeting adolescents and twentysomethings. A message that reflects on future generations will likely be targeting middle age and older people.
Developmental marketing looks at the marketplace in terms of four seasons of life. Each season has its own set of needs that may be somewhat unique to that season. Empty nesters in Fall usually aren’t looking forward to the next PTA meeting. Young parents enjoy getting involved in their children’s lives. Retirees aren’t usually into job retraining.
Each season of life has its own developmental objectives. Time spent in the childhood and adolescents years (Spring) is focused on preparation for adulthood. Fantasy and play are the narrative themes of Spring and have a large role in defining the needs and desires of children and adolescents.
The young adulthood years (Summer) are concerned with social and vocational development. Most approach these years with a heady appetite for adventure and project a strong sense of the romantic and heroic. Again, the life stage characteristics of this season predispose the nature of a person’s needs.
Midlife (Fall) is about refining and developing the inner self with a major question being, “What is the purpose of my life). People begin looking less to material accoutrements for life’s pleasure and more to experiential pursuits. They also begin thinking in terms of “giving back.”
Finally, the lions and lionesses of Winter look to continue the simplification of life that they began in Fall and coming to terms with what faces them in the last quarter of life. They also expand the spectrum of experiences to which they look for enhancement of life satisfaction. At the end of the day, the marketing approach needs to be guided by the nature of the brand and the market. Not news, by any means, but so often ignored. Some brands are best developed in the market’s mind within the context of universal values. Hallmark does a great job at this. It sells love, certainly a universal value.