• November 1, 2006
  • By Colin Beasty, (former) Associate Editor, CRM Magazine

Wild & Crazy

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The retirement-community division of Pulte Homes, Del Webb, was concerned that it might be misreading its customers. The division suspected that many of its "retirees" weren't sitting around at the pool all day or playing shuffleboard. Good hunch on Del Webb's part, because when it dispatched 100 employees to retirement communities throughout the country to interview more than 100 residents about their lives and tastes, the community's administrators got a surprise: Residents are active, energetic, and choose recreation like dance and fitness classes as well as more sophisticated ventures like taking on new careers. "We've become masters of adopting to the wants and needs of this generation," says Caryn Klebba, a spokeswoman for Del Webb. The division took this lesson and turned it into a competitive advantage. Today, Del Webb no longer depicts retirement living as a reward for a lifetime of hard work. Instead, the company presents it as a new beginning, and for good reason: Baby Boomers hate being pigeonholed. More than any other generation before them, Boomers are redefining life for the 50-plus crowd. Traditionally, age 50 has been the point at which marketers lose their interest in consumers, branding them as shoppers whose purchasing habits have been hardened and whose loyalties with certain brands entrenched. But the massive Boomer generation (said to have been born between 1946 and 1964) bucks the norm at every turn, and that matters now more than ever. More than half of the almost 76 million Boomers are 50 years old or older, while the rest crest the hill at the rate of 10,000 a week, according to Matt Thornhill, president of the Boomer Project, a marketing consulting firm based in Virginia. At this rate, Thornhill says, marketers have little time to respond to these changing attitudes. "Companies need to retool their attitudes if they're to meet this group's expectations about marketing and service." These attitudes are changing for good reason. The average American's life expectancy has topped out an all-time high of 78 years. For Boomers this means more time for fun, as most consider the 50-plus years as a new lease on life. "This isn't a group that wants to hear about retirement, growing old, and moving to Florida," says P.J. Wade, a futurist and founder of business-improvement consultancy The Catalyst Group. "To them, it's a fresh start." Money, Money, Money The Boomers have the cash to make that fresh start real. Experts place this generation's spending power at more than $1 trillion a year, nearly double the spending power of the prior generation. As American life expectancy continues to increase, so have Boomer expectations about how long they want to work. A recent AARP survey found that more than two-thirds of workers between the ages of 45 and 74 plan to continue working in some capacity past retirement. Even the AARP now refers to this life stage as "so-called retirement." Britt Beemer, president and chairman of America's Research Group, says, "This is a generation that is working longer than any previous generation before them." Boomers are also reaching their peak earning years as expenses begin to bottom out. For most of them, the kids have moved out of the house, mortgages and other loans are ending, and they are inheriting money from their savings-minded parents (which, Yankelovich's Smith says, is a trait Boomers don't have). "Baby Boomers love to spend money on themselves. An economist once said that Boomers will be the first generation in American history to leave less money for the next generation than they received from the prior one." Marketing to Boomers well past their 50th birthday also has the advantage of enabling companies to make up for the financial shortcomings of Generation X. Generation Y, a group of almost 73 million teens and 20-year-olds, still has a long way to go before reaching financial prowess, but Gen X, which falls between Gen Y and Boomers, should be the next logical target for marketers. The problem, according to experts, is that Gen X is only about 49-million strong. As a result, many economists and marketers have realized this group's spending power will never reach that of Gen Y and the Boomers. But don't expect Boomers to blow through their money. Despite this generation's financial security, Boomers' tastes and values have been refined over the years, resulting in a smart group of buyers who are better educated and more experienced than Xers and Yers. It's important when selling and marketing to this group that companies convey the value of the product or service they're selling. "They want to know the benefits, they want information," Smith says. "Salespeople better be prepped and know what they're talking about when it comes to Boomers. They're dealing with some smart cookies." We're Too Sexy For Our Age
Christie Brinkley was 22 when she signed with Cover Girl to become its spokeswoman, and the company renewed that contract for the next 20 years, the longest modeling contract ever. Just a few years after Cover Girl ended it, the company resigned Brinkley as a model (in 2005) for ads for mature-market skin care products. Today, Brinkley powers the ad efforts of Cover Girl's first makeup line aimed at older women (Advanced Radiance Age-Defying Makeup). But Cover Girl's contract with Brinkley signifies a larger trend among certain industries that have recognized how important health, beauty, and living a more active life is to Boomers. "Boomers, especially women, want to look and feel younger," says Dianne Durkin, president of Loyalty Factor. "Boomers are very health conscious. Any company that markets its products and services as solutions that recognize these trends is going to find a lot of success." Nowhere is this more evident than in the health and beauty industry. Companies have traditionally used very young models--we're talking teenagers--with dewy skin to pitch products to middle-age women. But recently a number of companies have overhauled their marketing campaigns and brand image to redirect the message to Boomer babes. In 2004 soap maker Dove learned this lesson after conducting a massive, globe-spanning market research project. The company found that many campaigns were unrealistic about older women. "It's about making all women feel beautiful every day," says Silvia Lagnado, global brand director for Dove. Dove now uses ordinary-looking women of all ages. The payoff? In the one year since launching the campaign for its new Unilever product line, Dove has experienced an increase in sales of 3.4 percent. That might not seem a lot, but in the highly competitive beauty industry, it's huge. "That's a strategy that worked because it connected with Boomers," Durkin says. "Boomers accept the fact they're getting older. It's important companies realize they're not fighting it, they just want to make the 50-something-year-old person look good." "This is a generation that was raised during a time when youth was being celebrated," Smith says. "They're going to look for products and services that give them an edge and an energetic feel." This drive to stay healthy is one reason why many Boomers have a strong connection with younger generations, such as the Yers. "Marketing to Boomers through their kids and grandkids is a great way to get the message across," she says. "They're going to pay attention to these trends in their quest to stay young and energetic." Not As Loyal As You Think Most marketers believe that by the age of 50 a consumer's brand preferences are firmly fixed--once a Colgate buyer, always a Colgate buyer. But while many experts agree this hypothesis is true for older generations, Boomers are just as likely to switch brands as younger generations. According to a recent Yankelovich study, 33 percent of consumers older than 50 agree it's "risky" to buy an unfamiliar brand. That's less than the 36 percent of those surveyed between the ages of 16 and 34 and only slightly greater than the 30 percent of people aged 35 to 49. This flexibility stems from the time during which Boomers grew up. The 1960s were a time of experimentation and unlimited possibility. When trying to lure customers from the competition, it's important marketers give a higher value proposition than the opposition, a staple of selling to this group. "Boomers are very [smart] consumers, they're not going to waste money," Smith says. "If another brand can come along and offer a more compelling product that speaks directly to their needs, they'll make the switch, just as much as any 20-year-old will." Boomers have high expectations of the marketing and sales pitches companies use to acquire them with, but these lofty expectations also apply to companies looking to keep them loyal via superior customer service. For Boomers, says Alton Adams, a managing director and customer insight specialist with Accenture's CRM practice, "there needs to be a postpurchase level of service that is commensurate with the product purchased and commensurate with the level of service promised." Boomers want customer service that not only resolves the issue, but also lets them feel "empowered," Adams says. "They want to feel more knowledgeable about the product and the company." Many Boomers have been disappointed with the IVR and Web self-service solutions companies now use, Adams says, as these solutions tend to be "summary solutions" that fail to leave them feeling informed about and trusting of the company they're doing business with. Also, Boomers have used evolving technologies for decades, and subsequently aren't as quick to shift to newer self-service solutions that younger generations have come to expect. Channel Cool One mistake companies often make about this cohort is to assume that it is less techwise than younger generations. Having grown up during the tech revolution, most Boomers are well versed in many of the channels that marketers use today to communicate. "They expect you're going to approach them through the channel they're going to buy through," Adams says. "They expect the company to know who they are and how best to approach them." Boomers are one of the most diverse groups in American history when it comes to tech adoption. Companies can look at simple customer data, namely, career history and educational background, for channel reach. This group's knowledge and adoption of technology comes primarily from their work environment, according to Catalyst's Wade. Boomers contact companies using "the channels they're most comfortable with, because that's the channel they've been using for years," Adams says. "If a Boomer is contacting via email, take him off your call list, direct marketing list, whichever, and skew your communications via the media he contacted you with. It's a simple concept, but one companies fail to pick up on." Companies are also altering channels for older generations to improve the experience. TicketsNow.com is an online reseller for premium events like concerts and sports. Realizing that its core demographic was people in their late 30s and early 40s, it revamped its Web site in 2005 to help ensure that customers were receiving customized, luxurious shopping. The site allows customers to check weather forecasts, get directions, hire a limousine, or make a reservation at a restaurant near the venue. "We were looking to create a virtual concierge experience that's unrivaled in the industry," says Mark Hodes, senior vice president of customer marketing. "Our customers are people who have made it in life, and want to show the world." TicketsNow.com is just one example of how many companies are reworking their customer touch points to provide those "vibrant and vivacious Boomers" a better customer experience, Adams says. "They've accepted who they are and are living life to the fullest." Contact Assistant Editor Colin Beasty at cbeasty@destinationCRM.com. BOOMTOWN {Facts}
  • Understand that Boomers are comfortable with their age and want to look and be healthy. Also understand they don't want to be 20 years old again.
  • Boomers are as open to new brands as are younger generations, and have plenty of expendable income to boot. Don't make assumptions about brand loyalty.
  • Baby Boomers are techwise. Use the customer data you have on your Boomer customers and segment them based on education and career history to learn which channels they're most responsive to.
  • Baby Boomers are smart consumers. Don't use vague, mass-marketing advertising with generic messages. Communicate the clear-cut benefits and values of the product and/or service you're selling. --C.B.
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