Female, Boomer Markets Dominate And Their Power Continues to GrowMost marketers have heard of the awesome size and spending power of the baby boomer and women markets.
The 40-plus market, also called the new customer majority, has reached 128 million, versus 85 million 18- to 39-year-olds. By 2010, boomers will outspend the younger markets by a whopping $1 trillion.
Women are truly the largest market in the world. They account for more than 80 percent of all consumer buying. They dominate spending in new cars, computers, home improvements, travel, healthcare and financial services.
Martha Barletta, author of "Marketing to Women," writes, "Where will you find the most lucrative women audiences to target? Baby-boomer women. This is the 'sweetest' of the sweet spots for marketers."
In Tom Peters' new book, "Re-Imagine - Business Excellence in a Disruptive Age," he declares that "for reasons I am unable to explain [these markets] go virtually unnoticed. Problem [Big]: to truly embrace either of these trends [markets] and tap a substantial share of this potential demands Total Enterprise Realignment. This is a 'vision' and 'brand promise' discussion, not a 'marketing tactics' discussion."
Few marketers dispute that customer acquisition and loyalty are in a crisis:
· A 1999 study revealed that every dollar spent in television advertising generated only 32 cents of revenue.
· According to BAI Global, response rates for credit card marketers have declined steadily from 2.8 percent in 1992 to an all-time low of 0.3 percent in 2004.
· The Gartner Group recently reported that nearly 60 percent of CRM initiatives fail to achieve their objectives.
"We are still too dependent on marketing tactics that are not in touch with today's consumer," Jim Stengel, chief marketing officer at Procter & Gamble, said at the 2003 American Association of Advertising Agencies Conference.
What caused this crisis? Marketing is stuck in the past.
The traditional language and communications style of Madison Avenue - learned and honed in an era of marketplace dominance by youth and white males - won't connect any company or brand with either of these two largest spending segments in marketing history. The new customer majority, dominated by 78 million aging boomers, and the multitude of women, the Earth's largest economy, have cast aside their traditional silence to demand that they be spoken to directly, honestly and responsively - and in their language.
New Rule No. 1: What your customers can't say. Conventional marketing research depends on the assumption that people can report their values, needs and motivations accurately. But many scientists no longer believe this.
"We have reason to doubt that full awareness of our motives, drives and other mental activities may be possible," neurologist Richard Restak said.
In his book, "Marketing Revolution," Kevin Clancy states the problem this way: "Because consumers don't choose rationally, any research that forces rational answers has to be flawed."
Research models must be based more faithfully on how consumers' decisions are really made. These models will reflect developmental changes in needs, motivations and behavior that happen across the life span and differences in gender purchasing behavior - thus decreasing researchers' dependence on consumers' self-reports.
New Rule No. 2: Customers cannot be reduced to mere numbers. David Wolfe, author of "Ageless Marketing - Strategies for Reaching the Hearts and Minds of the New Customer Majority," writes, "No old rule has been more deeply compromised than the longstanding practice of basing marketing primarily on statistical analysis of customers' needs, motivations and behaviors. This is evident in the declining accuracy of consumer research and dismal response to advertising."
This is ironic because we have an unprecedented amount of customer information and the capability to analyze it at blinding speed.
The values, needs and behavior of the women and boomer markets cannot be reduced to mere numbers.
Behavioral science also must play a big part in how you connect to your customers' emotions and reason.
New Rule No. 3: Understand what each market values from your brand. "Value" means different things to different consumers. To younger audiences it means price, fast service, free, bigger, instant gratification and ego building. Boomers and women place more value in quality, relationships, learning, personal service and making one's life richer and more meaningful. Boomers and women will pay higher prices for this kind of value. Younger audiences don't have as much money to spend and will buy low-priced, inferior products.
Younger people focus on acquiring "things" to keep up or show off. Women and boomers are more interested in the "things" that result in a richer experience for themselves and for others. Value concepts that can connect your marketing with these audiences include legacy, learning, doing for others, multitasking, empathy and growing relationships.
Most advertising today repels boomers and women. Much of it is designed by younger ad creatives for a younger audience, whether they realize this or not. Who can dispute that most ads seem targeted to ego-driven young males who need their toys?
New Rule No. 4: The customer experience is the marketing! As Joe Pine wrote in his book, "The Experience Economy," "The experience is the marketing!"
This rule reveals that the customer experience has replaced product features and benefits as the most important factor in differentiating a brand. Marketers must realize that consumers are not connecting with their brand because most companies focus on features while all customers focus on feelings. Ask your customers what they feel about your brand.
Direct marketers need to embrace the new markets that rule with the new rules. DMers have the chance to capture the lion's share of the women and boomer markets by integrating these new rules into their marketing. Direct response is ideal for connecting you with the markets because, unlike general advertising, each valuable audience can be targeted in many inviting ways such as through personal letters, values-centered DRTV or even 100-page catalogs. Also, you can analyze results quickly and revise your marketing economically.