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The Matures Endure
They're sticking around longer—that means their spending money has to last as long as they do.
For the rest of the November 2008 issue of CRM magazine please click here
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Walter (Haley Joel Osment): Why not see what he’s sellin’?

Hub (Robert Duvall): What the hell for?

Walter: Well, what’s the good of having all that money if you’re never gonna spend it?

                                                                                                —Secondhand Lions (2003)

See the clip here (about 4 minutes, 45 seconds in): http://snurl.com/1108MaturesVideo

Age: 63 and older (born in or before 1945)
Biggest financial concern: Cost of healthcare
Biggest political concern: Healthcare policy
Preferred communication channel: Newspapers and television

Remember the old TV commercial, “I’ve fallen and I can’t get up”? The catchphrase was at the core of a campaign for Life Alert, a device that signals paramedics of a person’s injury or compromising position. The commercials feature gray-haired actors portraying accident victims who thank the device-makers for saving their lives. The general attitude is one of helplessness, not self-sufficiency. Although the commercials can still be caught on TV from time to time—especially late at night and during reruns of Murder, She Wrote—it’s no longer a prime example of how to market to the oldest consumers, or “the Matures,” as they’re known.

As times have changed, so have the techniques employed to reach out to the Matures. The elderly do not want to see themselves represented as feeble, vulnerable grandparent types. As the first Baby Boomers approach retirement, the Matures are becoming more difficult to stereotype and less tolerant of condescension. Marketers seem to have taken notice. One commercial for over-the-counter arthritis medicine, for instance—a product tailor-made for the Matures—features a healthy retirement-age woman. She talks about needing medicine so she can maintain her active, physical, mobile lifestyle. And a full-page article in The New York Times recently featured products that make life easier for the aging consumer, such as the iRobot (which saves the user the trouble of repeatedly climbing a ladder) and the Jitterbug cell phone (which is basically a fuss-free handheld with an enlarged dial pad and screen font). In short, the elderly simply won’t stand for being thought of as old.

“If you say, ‘This product is for an older person and is used primarily by older 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 you connect with older customers and target their spending habits? Does an increased emphasis on independence, mobility, and vitality mean less penny-pinching, 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 old folks 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 self-sufficiency, 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, 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.)

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.

Online, At Last

SIDEBAR: 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.”

Contact Editorial Assistant Lauren McKay at lmckay@destinationCRM.com.

Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationcrm.com/subscribe/.

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To contact the editors, please email editor@destinationCRM.com
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationCRM.com/subscribe/.
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