Andy's Articles
MARKETING TO THE OVER 50,s
THE MARKET DEFINED
They used to be called Senior Citizens. Then the 'Wrinklies'. That changed to the 'Crinklies', soon after. For a long time, they were known as the 'Grey Market'. The Insurance market calls them Grey Eagles.
Contemporary marketing speak now calls them Third-Agers.
We're talking about the over 50's market place - without question, the most attractive and potentially lucrative target market of them all………..but also, potentially, the most dangerous….
FOUR STAGES OF HUMANKIND - GRAPHIC
Since the turn of the century, the 50 + population has seen dramatic growth in the U.K. And, that growth is set to continue, at a far greater rate than the overall adult population.
Back in 1901, the over 50's represented 22% of the total adult population. That grew to 36% in 1951 and continued growing, standing at close to 40% in 1991.
The run up to the Millennium saw a further 2% growth and now, very dramatic changes are occuring…
In the 30 years following the Millennium, the sector will see astonishing growth of 50%, with almost half the population in the year 2030 being over 50, including 26% of the UK population over pension age.
Currently, the over 50's sector is the most affluent of any group, with 36% of over 50's having a gross income in excess of £20.000. The Henley Centre recently estimated that 80% of the country's wealth is held by people aged 50 or over. So, if your products or services are relevant to this group…I'd review your plans… and fast!
THE MARKET OPPORTUNITY
For years, marketing to the over 50's was highly comical to those outside that age bracket. Support tights, colostomy bags, retirement homes and chair lifts were the order of the day. In the last few years, a significant change has taken place.
Companies of all shapes and sizes, from all market sectors, have identified the lucrative potential of the target market. And, what's more, they have diverted serious chunks of marketing budget into this area.
But, in general terms, the vast majority of those companies have completely failed to understand the market place and its complexities.
To start with, it's not a single marketplace.
It is in fact, a target market, sub-segmented into close on 40 different types, which demand to be spoken to individually. These types are determined by the mental persuasion of the individuals within them, overlayed with other discriminators such as age and wealth, lifestyle and sex.
For example, we all know individuals, say, between 50 and 60 years of age. There is a dramatic difference between some of them. The way they walk, talk and dress. And, more importantly, the way they think.
Some 50 year old these days are 51 going on 35. They are computer literate, style conscious, knowledgeable about contemporary music and, probably more 'groovy' than grey. Remember, both Mick Jagger and Paul McCartney to name but two, are now the wrong side of 50. They consider themselves to be in the 35 year old marketplace. However, there are others in that same segment that are old before their time and it shows in everything they do.
For marketers, of course, this is a great problem.
Talk to those two different type examples in the same way and you'll probably alienate both of them. The former type wants to be recognised and addressed as a youthful over 50. The latter is mentally older, is happier in that shell and wants to receive messages with an older 'feel' and relevance.
This of course represents another nail in the coffin of image advertising and a further attraction of direct marketing.
Because, lets face it, only direct marketing can profitably address the very many different and complex targeting issues within this enormously attractive target sector.
According to a recent TGI survey, the Third-Agers can be divided into five lifestyle groups:
'Thrifty Traditionals', accounting for 17% of the age group. They are not well off and budget for every penny, are heavy TV viewers and read down market tabloids.
'Outgoing Fun Lovers' contribute another 20%. They are magazine oriented, enjoy travelling, eating out, entertaining and are above average viewers of TV.
'Astute Cosmopolitans' account for 18% of the age group. These are the ones with most money, read broadsheet newspapers, specialist and lifestyle magazines. They enjoy foreign holidays and are light TV viewers.
'Apathetic Spenders' for a further 22% of the group. They take on debt through credit cards and do not like foreign holidays. Favoured newspapers are the tabloid press.
'Temperate Xenophobes' make up the remainder. They love the Radio Times, most definitely do not like foreign food or travelling abroad and are heavy TV users.
THE ATTITUDE OF THE MARKET
In the last decade, we have witnessed the arrival of the sceptical and cynical consumer. No one believes anything anymore.
We have over four decades of television advertising to thank for that.
The over 50's are far more receptive to modern methods of communication than their counterparts of 10 years ago and understand its ways, its methods and its tricks.
Some were teenagers in the magical times of the late fifties and sixties and are well- versed, well travelled and very street wise.
DISLIKE OF ADVERTISING INCREASES WITH AGE
The over 50's are traditionally regarded as heavy users of financial service, health and leisure products, with a high emphasis on travel both UK and overseas. They are also heavy consumers of toiletries and cosmetics, drinks and gardening products. Some recent consultancy research identified that the Third-Agers in certain markets, showed a propensity to be a marketers dream.
For example:
Financial Services
27% More likely than average, to have stocks and shares
61% More likely than average, to have unit trusts
Travel
10% More likely than average, to take 3 or more holidays
per year
42% More likely than average, to have been on a sea cruise
within the last year
Drink
52% More likely than average to drink Scotch Whisky
10% More likely on average, to drink Gin
Most recently retired people ARE better off than their counterparts were 20 years ago.
Most recently retired people have paid off the mortgage and have the opportunity to sell their property and move to somewhere smaller or nicer in the country. A lot have shares in the major utilities which they have seen rise in value, timeshare properties they purchased during their years of highest earnings and possibly, even some collections they have built up.
PRISONERS OF OUR YOUTH
But how many want to sell to start a new life somewhere else? Many marketers seem to forget that the older we get, the more steadfast we become. Accordingly, we show a distinct reluctance and resistance to change and we become more attached to traditional values that were established by our parents and which we will have passed on to our own children.
Change is not enacted simply because we get older. Change is a gradual process that evolves through generations.
I am indebted to my old friend and well known direct marketing 'ligger' Ian Ramsden for a relevant story which both supports and emphasises the point made. Ian recently told me:
"When I was a child we took our family holidays in Filey, a small family oriented resort in North Yorkshire. We went there every year for 12 years through the 50's and 60's until my parents were able to afford their first holiday abroad. We didn't visit again until my parents had retired and I suggested a day trip.
Going over the level crossing into Filey brought memories flooding back and we all cheered at the sight of the sea - just as we had done all those years ago. Nothing much had changed. The coach parties were still piling into the Corner Cafe, the Punch and Judy man was still on the seafront and I realised how much I had enjoyed my time spent there. It was the place I would bring my kids to - not so much for their sake but mine also. It was a chance to relive those memories.
But it was also a time for my parents to relive their time too. What was happening was that the generations were being bridged by events that had taken place over 30 years before.
For them it was a time of happy memories that were joyful to relive in their old age - and I suspect that I would be doing the same in another 30 years.
My parents grew up during the recession. It was bloody hard and a time they never forgot. Their parents imprinted on them the importance of being frugal, of 'make do and mend' because they never knew when something new might come along. Something new did come along. It was the war. And so the circle of 'care' carried on.
Those born in the 40's/50's are the first generation to have the true experience of something new and are more willing to change because they have been brought up with change. Our parents, currently the grey market, are not.
But, how many advertisers have marketed to those people in a manner that, whilst not focusing on depravation, reminds them that they understand how they think, what they have been through to bring up children on low wages and salaries, how careful they are with money. How many acknowledge their 'state of life'?"
THE OLD OLD AND THE NEW OLD
Most direct marketing to the over 50's is undertaken by people who were not even born in the 50's. How many companies undertake true research to discover not what the sector wants but how it wants to be marketed to?
ADVERTISING LIKES AND DISLIKES
Some companies are already heavily investing in campaigns to the Third-Agers. Travel operator and magazine publisher Saga has been targeting retired people for close on 40 years, with great success.
Significantly, in recent times, it has lowered its age parameters from 60 to 50, to take full advantage of the trend of retiring early.
Car Insurance companies have also produced specific policies for the 50+ marketplace, as they represent the safety and security conscious individuals that are very attractive.
But, by and large, companies are either ignoring the sector or marketing to it, very badly. The differentiation that's required to connect to the specific target segments within this group is being totally ignored.
Reg Starkey, Managing Director of W1 agency Cohort, who specialise in the Third Age market agrees "We feel many older people are alienated and excluded from advertising that ought to include them. If you talk to research people, you realise that most advertising briefs cut off at 45, as if the earth is flat and anyone past that age, has fallen off the edge."
Jeremy Bullmore, in a recent article in Marketing sums it up perfectly "When I come across holiday advertisements featuring late middle aged gentlemen with wispy white hair, in cardigans and garden chairs. I am often in a cardigan and garden chair myself. I know exactly what I am supposed to do: I am supposed to identify. In fact, what I do is distance."
"I can't be the only person who doesn't want to go on holiday to meet people like myself. Predicaments and problems, ambitions and emotions, that's what people identify with."
AGES AND STAGES WITHIN THE THIRD AGE - GRAPHICS
As with most marketing innovations, especially those with a direct marketing flavour, the Americans are still ahead of the game. What they do on a Monday, we tend to do here on a Tuesday.
Marketing to the over 50's is no exception.
Age Wave, based in Emeryville, California are a leading authority on marketing and sales to mature adults, Michael Rybarski is Senior Vice President.
He believes the age wave isn't coming - it's already here.
"Today there are more mature people than at any time in history, and they control more of a country's discretionary income than any other segment of the population. These broad demographic trends are well-known now by companies and by their competitors. Interestingly, however, marketers' perceptions of mature adults often have not kept pace with the realities that underlie their swelling numbers."
Age wave have spent years learning about mature consumers.
Along the way, they've had the opportunity to uncover some long held misconceptions on who the ageing consumers are and, more importantly, what they want - misconceptions that, as marketers, we can all see being applied in contemporary campaigns right now.
These misconceptions are a major reason why a lot of companies are struggling to produce a return on marketing investment in campaign activity to the Third Agers.
Their findings are illuminatory to all of us:
"Today's mature adults are like our grandparents."
Perhaps the single most important barrier to marketing and selling successfully to today's mature adults is the ingrained image many of us have that today's adults are like our own grandparents. The audience you're addressing is the first in history to benefit from new medicines, new nutrition, and new beliefs about exercise. They're active and vital individuals who in the main, look and act a lot younger than they really are.
Our work in the financial services area has taught us that there is no "they". The mature audience is not homogenous. Instead of becoming more alike as we age, we, in fact, tend to become more individualised.
As a result, to reach the appropriate segments within this market, you must tailor your marketing, product and sales messages to meet their distinct lifestages. Are they about to retire? Recently widowed?
Newly concerned about their health? It's important to find the triggers that touch your portion of the mature audience.
"Older folks buy for price."
One misconception that paralyses many marketing efforts to mature adults, is the idea that price is all they want. True, they are savvy buyers, and if price is all that's offered, price is what they'll buy. But these folks have also bought their share of lemons and have come to believe "you get what you pay for." In either instance, they will determine, based on their experience, when a higher price is worth it. Ultimately, they are after peace of mind, and a sense of real value.
As an example, the experienced investor who enjoys working with finances may choose a discount broker. His wife, on the other hand who will inherit his money, may be totally unfamiliar with investing and feel safer investing with a full service firm.
"Older Folks are brand-loyal."
In work with the insurance industry, we saw that between 20% and 30% of a company's customers bought new policies from competing companies every year. A key to the older market is understanding that their needs are not static, nor are they apt to place personalities before their own best interests. Older adults respond to offers that meet their specific lifestage needs, just as younger adults do. But they are far more open to new messages and products that increase their sense of control and security. They will switch brands and securities firms when they feel it serves them.
"Mature adults have consistent and predictable behaviours."
Mature adults often experience a personal Renaissance of sorts in their mid-to later-lifestages. They develop new interests, meet new friends, remarry, take classes, start new careers. At no other time in their lives have they been less restrained.
It is imperative, therefore, to consider their evolving needs and interests as they move through their lives. What was attractive to a senior executive with three kids in college may not even be noticed by a retired divorcee with a new sailboat and an empty house. There is a tremendous opportunity for securities firms to target the multiple and changing needs of their customers and to expand services to meet their needs and wants.
"Older adults won't try new things."
Numerous bits of research confirm that mature buyers are more likely to try new things than any other age group. They try based on information, however, rather than impulse. Interestingly, the group that is least likely to try new things are 18-25 year olds.
"The financial services sales model that has worked in the past will work now and in the future."
Mature adults have been over-marketed and over-sold. As a result, they've become increasingly "immune" to standard sales tactics. They want, above all, a sense that they can trust their financial advisor - and nothing destroys that sense of trust faster than their perception that they are being "sold."
This does not mean that soft relationship-building replaces real sales building techniques.
It does mean, however, that new sales approaches must be sensitively tailored to meet the needs of these very sophisticated buyers.
Andy Owen is Managing Director of Andy Owen & Associates, a Strategic Marketing Consultancy, with offices in Birmingham, Dubai, Paris, New York & Los Angeles. He personally visits Dubai every four weeks to work with clients in the area. He can be contacted on 0044 121 778 6640, or by email at andyowen@aol.com en.co.uk