Marketers Need to Prepare Now For The Aging of The Baby Boom—Or Risk Losing Out on a Huge Opportunity
By Alicia Orr Suman
Between 1946 and 1964 in the post-WWII population bubble called the baby boom, 76 million Americans were born.
In 2006, the baby boom will turn 60, and the leading edge of the baby boom generation will approach retirement and "senior" status.
According to a new AARP study, Boomers at Midlife: The AARP Life Stage Study, boomers are drawn together by their collective experiences. As members of one of the largest generations in American history, they've experienced Vietnam and Watergate, the civil rights and women's movements, and moon landings. "It's a generation that redefined music, religion, leisure and many American norms and values," the study says.
But beyond its collective experiences, the baby boom is remarkably diverse. Within its boundaries are 50-something grandmothers and grandfathers, 40-ish moms and dads of young kids, childless professional couples and single, working individuals in their late 30s.
Given this generation's importance and diversity, how can direct marketers tap this maturing market segment? Target Marketing recently caught up with Jock Bickert, chairman of the board of Cohorts/Looking Glass Inc., and one of the pioneers in the field of life-stage marketing. Bickert developed the Cohorts method of segmentation to help marketers understand their customers at the household level. Cohorts are household segments defined by shared demographic, lifestyle and consumer behavior characteristics.
Here, Bickert shares his insights into what direct marketers can do to effectively communicate with the important Boomer market.
Target Marketing: What do marketers need to understand about the baby boom generation to seize this marketing opportunity?
Bickert: The baby boom truly is difficult to define. It's not one market. It extends from Harry S. Truman to Lyndon Johnson.
There are so many diverse groups represented within this generation.
For an illustration, look at Cohorts where we have seven groups in which more than 80 percent would be in the boomer generation. These [individuals] are similar in median age (in their mid-40s), but widely diverse in income and interests and attitudes. For example, they may earn anywhere from $18,000 to $140,000 a year [median incomes]. Then there are factors such as whether or not they have children, their education levels, and so forth. (For two examples of Cohorts segments, see the illustration below.)
TM: As baby boomers grow older, what kind of mature market will they create? Will baby boom seniors differ from today's seniors?
Bickert: We've started to see a difference already in younger seniors: They're more health-conscious, more active and much less sedentary. They travel more.
If you look at the way old age is portrayed on TV ads today—those images are going to be out of date in five years. These seniors are not going to be grandmas and grandpas in rocking chairs on the front porch. They have much they still want to do. Many will continue working in their 60s and even 70s.
TM: What are boomers' media and shopping channel preferences?
Bickert: Remember, this is the TV generation we're talking about, so this group is very much inclined to respond to TV. Because of this, they are somewhat less responsive to newspapers.
The younger boomers are much more 'Net savvy, so we're likely to see more retirees shopping online, planning vacations online and handling their personal finances online.
The fastest growing portion of Internet users are older Americans. This means the Internet could very well be the next big medium—but that's only if the spam issue is addressed. The spam issue is certainly inhibiting the medium. If that problem is removed, e-mail could become a very important marketing medium for all sorts of products and services—travel, financial services, health, etc.
TM: Should marketers gear their messaging and offers specifically to boomers?
Bickert: Direct marketing is a wonderful medium for reaching boomers, because it can speak to each segment within the diverse boomer population using versioned messages.
I suggest everyone test e-mail marketing for versioned messages. This medium allows you to version copy and offers—easily and cost-effectively.
Using e-mail, the costs are minimal so the potential ROI is even greater [than with other media]. But it all relates back to the issue of relevance. To succeed, you need to know what your prospect's attitudes and preferences are.
TM: What's the key to ensuring marketing messages are relevant to baby boomers?
Bickert: To successfully sell to boomers requires more than a superficial understanding of who they are. You need to invest the time and effort to really know their purchasing habits, their channel preferences, their attitudes.
And it's important to realize that with such a huge audience we're talking about many different attitudes and preferences. Some are more likely to be brand loyal, some are going to be more price sensitive—even if they're interested in the same product.
TM: Can you give an example of how widely boomers' buying habits differ?
Bickert: Let's take a health/cosmetic company selling a vitamin or skin-care product for [mature consumers].
Ronnie and Debbie [a Cohort segment identified by Bickert and Cohorts/Looking Glass] are a working class couple whose median income is $39,000 and median age is 47. They are not at all brand loyal. Their major motivation is price.
Compare them to Barry and Kathleen [who represent another Cohort segment], who, at a median age of 46 and income of $134,000, go for fashion and frequently shop online. They're responsive to sophisticated media such as Bon Appetit and Food & Wine magazines, and are not at all price-sensitive.
But both of these couples may have similarities in the products they want and need. The key is [for the marketer] to find the one or two motivating factors so that they can draft the right copy approach and offer to get both of those couples to buy [the same vitamin or skin-care product].
TM: What's the biggest hurdle to effectively selling to baby boomers?
Bickert: Direct marketers have been derelict in understanding their customers.
They've become enamored of sophisticated modeling techniques, but [these tools don't] give you any insight into the message you need to send to communicate effectively with these individuals: You also need some mechanism for providing understanding.
Database segmentation tools such as Cohorts certainly help, but marketers also need to do original research. The problem with modeling is you analyze the respondents to the last mailing you did, and then come up with a series of scores—with the high scores telling you those people have a high propensity to buy. But it tells you nothing about their buying behaviors.