Don’t count on it
Editor’s note: Heather Stern is director of marketing and client development at Focalyst, a New York marketing firm.
We’ve all heard the Boomer/50+ statistics before: they number 78 million and they’re in control of much of the nation’s wealth, spending approximately $2 trillion a year. In case we happened to forget, recent covers of BusinessWeek and Newsweek were there to remind us: “The Boomers are coming, the Boomers are coming!”
Despite these statistics, many Fortune 500 companies aren’t tailoring marketing, advertising and product development efforts for this dynamic, lucrative group of consumers. What are the underlying reasons for this industry-wide trend and how can research help facilitate a shift in perception and commitment to this ever-important segment?
Late in 2005, AARP Services and The Kantar Group formed Focalyst, a joint venture dedicated to helping companies create products, services and marketing strategies based on the multi-dimensional needs of Boomers and 50+ consumers rather than simply on age.
Focalyst’s inaugural research initiative was to uncover the underlying beliefs held by marketers about the “aging population” and conduct a study that would help turn those perceptions upside down. The first issue was addressed through an executive survey conducted among senior brand and marketing executives at Fortune 500 firms in the retail, automotive, apparel, consumer packaged goods, food/beverage and pharmaceutical industries. The second was accomplished through in-depth analysis of AARP brand loyalty research which was carried out by telephone from October 28 to November 6, 2005, among a nationally representative sample of consumers across age groups, from 18-80+.
Never say never
In the executive survey, Focalyst found that targeting the Boomer and 50+ segment didn’t rank among the 10 top priorities in almost half of the companies surveyed. In fact, while interviewees were aware of the sheer size and opportunity this market represented, over 65 percent had no specific plans to address this audience, generally based on the belief that this population is reluctant to switch or experiment with new brands.
As one marketer of a leading apparel company said, “When someone turns 50, he will never switch brands.” Another marketer, from a major food manufacturer admitted, “When we do media targeting, we explicitly exclude the 50+ because we feel like we will get them anyway.”
Get them anyway? “In today’s consumer marketplace of media fragmentation and product proliferation, assuming that any consumer, regardless of age, is a ‘done deal’ is a dangerous thing,” says Evan Neufeld, senior analyst at Focalyst. “Those brands that don’t move forward and evolve will find themselves being left behind.”
Brand loyalty: not what it used to be
Contrary to popular perceptions, Boomers and 50+ consumers are no more brand-loyal than those in the 18-41 cohort. Focalyst analysis of recent AARP data from 1,547 adults ages 18 and older (of which 512 of the respondents were 18-41 years of age, 518 the respondents were 42-59 years of age and 517 adults were age 60 or older) found three out of five consumers displayed a high degree of brand volatility across cohorts, with no marked decrease among consumers over 42 years of age, the youngest official Boomers.
For example, 57 percent of respondents ages 42-59 were likely to experiment with different brands, with more than nine in 10 agreeing that value is more important than brand in their purchases. Additionally, 72 percent of consumers in the same bracket say they always look for a new or improved product that might be better than what they currently use, the same percentage of consumers within the 18-41 bracket. And as for the 60+ consumer, who many believe are most set in their preferences, the survey revealed they are even more likely than younger adults (62 percent for 18-41 vs. 65 percent for 60+) to agree that “in today’s marketplace, it doesn’t pay to be loyal to one brand.”
“The conventional wisdom that drives marketing lethargy is grounded in outdated perceptions of aging,” says Mike Irwin, president of Focalyst. “Marketers who continue to assume that consumers’ loyalty and affinity to products and services remains fixed with age will lose market share to those who seek out and directly speak to them.”
The pursuit of value
Focalyst research showed that, in general, consumer attitudes about brand loyalty are remarkably consistent across age groups. Ninety percent of consumers overall spoke of the primacy of “value in a product as being more important than brand.” When evaluating product loyalty by brand, research once again showed little variation based on age. Of the 10 product groups reviewed, seven had nearly identical levels of single-product loyalty across age groups (the exceptions being cars, music and video players, and airlines). Higher-cost and -consideration products and services, while having marginally higher “positive” brand rankings compared to more consumable categories, have low “brand negatives.” In higher-cost and -consideration categories, the percentage of consumers who think that being brand loyal makes little difference is very low. These negatives show slight variation by age and exhibit similar ranges within each category. One of every four consumers in all major product categories will be challenging to reach.
Advertise with care
Thus far, the brand loyalty research showed very similar results among age groups. That is to say, contrary to popular mythology in the marketing world, mid-life and older adults are no more brand loyal to most product categories than are younger adults. However, they responded very differently to advertising than the younger population. To get their business, it is critical to address them on their own terms. In fact, the Boomer and 50+ populations found advertising more insulting or condescending compared to younger cohorts (51 percent vs. 37 percent) with nearly half saying advertising is not sensitive to their age group. Additionally, 58 percent of the 42-59 age group (and 74 percent of 60+) agreed that today’s advertising was too “out there” to resonate with them (vs. 39 percent of 18-41 market). While only about half of consumers (across age groups) view “liking ads” as a key factor in driving them toward purchase, the blowback of negative ad execution is deadly, with 80 percent of Boomers and 75 percent of those older than Boomers saying they are less likely to consider a product if they find the ads offensive.
“Our study shows that 51 percent of Boomers/50+ consumers find advertising insulting or condescending,” says Neufeld. “The price of entry for brands courting the Boomer/50+ market is to avoid the uninformed perceptions and images that will ultimately turn them off.”
Advertisers who have Boomers and 50+ users and want to keep them, or those who don’t and covet them, must consider a more synergistic advertising execution and placement strategy. First, they should immediately abandon the notion that they have to keep a wide distance between the 18-41 and the 42+ age groups. Such ideas doom marketers to labor in realms where marketing is dictated by many of the old, untrue and ultimately ineffective assumptions we have outlined. Marketers must better align creative executions to appeal to both groups whenever possible, operating more in parallel and focusing on the use of tactics that are well-received by all cohorts (such as humor and conveying energy/excitement in ads) and avoiding those that have more mixed results (edgy creative, for example). This in turn should allow for the development of ads that keep both groups engaged while offending neither.
While some advertisers believe that targeting the Boomer generation may alienate their core market, Focalyst research shows that ads and other brand experiences that are specific to Boomers and 50+ consumers need not turn off other core demographics.
For those exclusively targeting the Boomers, Focalyst suggests a few rules of the road:
- The power of recommendations - 82 percent of consumers 42-59 said they would try an unfamiliar brand if it were recommended by someone they trust (73 percent of 60+ would do so as well).
- Radio is less effective - only 17 percent of consumers 42+ are influenced in their purchasing decisions by ads on the radio. The strongest media for influencing a purchase are newspapers, television and the Internet, especially for product research.
Market to values and lifestyles
So is there a general “Boomer attitude” towards brands? “The truth is, there is no such thing as one Baby Boomer sentiment, attitude or behavior,” Irwin says. “This is a group of consumers who in many ways defy definition. They are highly varied and therefore far from monolithic. The answer is not to market to age, but to market to values and lifestyles. Companies that have a deep understanding of the needs triggered by values and lifestyles and highlight them in their marketing and advertising will show a significant bump in sales from older consumers without alienating the younger buyer.”