Speakers sometimes tell business audiences how a frog thrown into a hot tub of water will quickly jump out while one plunged into a cool tub that is gradually heated will bask in his spa until overcome by heat.
      According to Fast Company magazine, the lesson is hogwash dreamed up by someone wanting to dramatize the point that people often respond to gradual change too slowly for their own good.
      Such faux wisdoms permeate business, especially marketing. For example, people in advertising defend their preoccupation with younger markets by saying that if you don’t get people into a brand while they are young you are likely to lose them for life.

      But like the fiction of frogs’ behavior in gradually heated water, the notion that getting younger people into a brand is easier than getting older people to switch brands has no scientific support. In fact, recent research by RoperASW shows that in a number older people are the most likely to switch brands.



      The myth about older people’s reluctance to switch brands is one of many misconceptions dealt with throughout this site and in greater depth in David Wolfe and Robert Snyder’s Ageless Marketing: Strategies for Reaching the Hearts and Minds of the New Customer Majority.
      The emergence of the New Customer Majority – people 40 and older who in 2002 outnumbered adults 18-39 by 124 million to 85 million – has changed the calculus of supply and demand. Many companies’ survival depends on building business in Mew Customer Majority markets because of population shrinkage in key younger markets.
      In Management Challenges for the 21st Century, Peter Drucker places population shrinkage in younger age groups and the explosive growth of older age groups at the top of his list of the five biggest challenges companies now face.
      Consider, for example, what is happening among 25-44-year-olds – traditionally the most important age group in the consumer economy because it spends the most per capita on motor vehicles and housing related items. This age cohort is projected to shrink by 4.3 million during this decade with its spending falling by $104 billion. Never before have companies not had rising population in this age group to lift sales.

A new/old way of marketing
      Some companies are beginning to realize, “Madison Avenue, we have a problem. We can’t get enough business from a shrinking 25-45-year-old population to fuel sales growth in during this decade. Our best bet is to hitch sales goals to the upward lift of the New Customer Majority, among 45-64-year-olds who are growing by 16 million people in this decade. Their spending will increase by $329 billion.
      “The trouble is, Madison Avenue, with your lead we’ve been so preoccupied with the younger crowd we don’t really have a handle on marketing to the New Customer Majority. We’d like to cash in on that market without losing our position in younger markets but you’ve always said that marketing to older people turns younger people away from it. Help!”
      The answer to that dilemma is ageless marketing. Marketing was not always so heavily age-based as it is now. Age-based marketing got started in the 1950s when the idea of market segmentation was born.
      The power of ageless marketing lies in its ability to dramatically extend a brand’s reach by catering to values shared across generational divides.
      New Balance is one of the nation’s most successful practitioners of ageless marketing. It became the fastest growing athletic shoe company after adopting an ageless marketing strategy in the early 1990s. Its sales growth has averaged 25% annually over the past five years despite overall sales for the category being flat. Even mighty Nike has not seen growth in U.S. shoe sales during since 1997.
      Harley-Davidson, another ageless marketer, has nullified stereotypical views of older people’s price sensitivity by getting much wider margins per unit sold than General Motors ($1,800 vs. $225 in 2001)., earning it a market capitalization of $16 billion in 2001 (with $3.8 billion in sales) in comparison with GM’s market cap of $20 billion and $177 billion in revenues.

Ageless marketing challenges tradition
      Ageless marketing challenges much of conventional marketing wisdom – especially with respect to aging boomers. For instance, the tired claim, “boomers will go into old age kicking, screaming, and fighting it all the way” is not supported by valid research. Supposedly, boomers’ alleged animosity towards aging defines much of their marketplace behavior.
      But that notion, like the myth of older people’s aversion to switching brands, is a baseless generality that can lead a company down a path toward marketing failure. The fact is, most boomers are not developmentally retarded. As they age, most will experience dramatic ebbing influence of the narcissistic materialistic values that shape much of the behavior of the young.
      This midlife event in human development presents marketers who cut their teeth on the youth oriented markets of the past with unfamiliar challenges – challenges that often can be best met through values-based ageless marketing – the central strategic focus of brand positioning in ageless marketing.
      While it facilitates marketing to multiple age groups simultaneously, ageless marketing is not age-blind. The trick is to know when and when not to invoke age related images and values. This is true not only in marketing communications but also in channel management. New Balance CEO Jim Davis attributes much of his company’s success to how it plays the age card in channel management strategies.

The majority rules!
      As in politics, the majority rules in the marketplace. The New Customer Majority is influencing buying and lifestyle behavior in nearly all age groups including teens. Companies who think they need not pay attention to people over 40 need to rethink that idea.
      The Yankelovich Monitor’s, which like most marketers and advertisers focuses mostly if not exclusively on the under-50 population, has been recently reported that the leading values, views and behaviors in the marketplace bear great resemblance to Abraham Maslow’s description decades ago of people’s behavior in the second half of life. The Monitor said today’s consumers are acting more paradoxical, want less “stuff”, are reprioritizing their lives, acting more self-reliant, and seeking balance in their lives. Maslow and other psychologists have long associated those behavior traits with people in the second half of life. Yet, even members of Generation Y – older teens and young adults – now reflect these behaviors according to Monitor.
      Aside from the New Customer Majority influence on younger consumers, many companies in any event could benefit by recognizing that older people account for a surprising percentage of product purchases usually thought of as being made mostly by younger people. For instance, the fastest growing market for music CDs is people 45 and older. In anther category, grandparents make 40 percent of upscale juvenile clothing purchases. They might account for a larger percentage if marketers of juvenile clothing gave them more attention.

A different kind of consumer
      Today’s marketplace is unlike any ever before faced. Most adults are in the years when the influences of self-actualization needs begin showing up in behavior. Until the New Customer Majority emerged, these forces had little noticeable influence on the marketplace at-large. Now however, such attributes of self-actualization oriented behavior as the following are widely evidenced in the marketplace:

• Perceptions – more conditional, less absolutist (shades of gray vs. black and white)

• Relationships– more autonomous, less dependent on external sources (such as advertising) in making decisions

• Social behavior – more individuated, less subject to “herd behavior,” less easy to pigeon hole into segments

• Decision making – more emotional (as in “gut feelings” or intuition), less “rational” in decision processes.

      Dealing successfully with these and other behavioral attributes typical of members of the New Customer Majority calls for major rethinking of traditional ideas about consumers and marketplace dynamics. The question is, how many companies will continue acting as frogs allegedly do in slowly heating-up water.

All Households

Total HH

Share
of HH

Avg. HH
Spending

Total Spending

Share of Spending

Total

105,189,833

100%

$36,995

$3,891,497,871,835

100%

Under 25 years

5,240,542

5.0%

$21,704

$113,740,723,568

2.9%

35 to 44 years

23,418,612

22.3%

$42,792

$1,002,129,244,704

25.8%

45 to 54 years

22,089,398

21.0%

$46,511

$1,027,399,990,378

26.4%

55 to 64 years

15,160,747

14.4%

$39,394

$597,242,467,318

15.3%

65 to 74 years

11,505,496

10.9%

$29,864

$343,600,132,544

8.8%

75 years +

11,087,461

10.5%

$22,884

$253,725,457,524

6.5%

All Households

Total HH

Share of HH

Avg. HH
Spending

Total Spending

Share of
Spending

% Change
2002-2010

Total

114,199,622

100%

$36,995

$3,891,497,871,835

100%

8.6%

Age of HOH:

Under 25 years

5,813,910

5.1%

$21,704

$126,185,102,640

3.0%

10.9%

25-34 years

17,324,803

15.2%

$36,158

$626,430,226,874

14.8%

3.8%

35 to 44 years

20,450,337

17.9%

$42,792

$875,110,820,904

20.7%

-12.7%

45 to 54 years

24,615,261

21.6%

$46,511

$1,144,880,404,371

27.1%

11.4%

55 to 64 years

20,519,070

18.0%

$39,394

$808,328,243,580

19.1%

35.3%

65 to 74 years

13,508,085

11.8%

$29,864

$403,405,450,440

9.5%

17.4%

75 years and over

11,968,156

10.5%

$22,884

$273,879,281,904

6.5%

7.9&

   For information on developmental relationship marketing training and educational programs Call 703-758-0759.