Outlook 2005: Generational Marketing, Census Offer DM Insight

I love mail. As a result of this passion, I read everything that’s put into my mailbox. I love freestanding inserts, too. Over my years in the marketing business, I have produced literally billions of individual pages that have found their way into the home.

A while back, I received a mail piece that stopped me dead in my tracks. It was a 5-by-8-inch postcard printed in one color. The sender was our local post office. The riveting message was simple. It was taking applications for mail carriers. You might say, “Yeah, so what?” But this was the first time I had ever seen an ad to recruit mail carriers.

Why is this significant? It’s significant because, throughout the past 30 years, there has been a waiting list for anyone wanting to become a postal carrier. That mail piece told me that mail carriers have now joined the ranks of other trades such as firemen, police, nurses, mechanics, carpenters, electricians, plumbers, truck drivers and everyone else we used to call “blue collar.”

Welcome to the club Mr./Ms. Postmaster. Prepare to start begging for help. And guess what? It’s only going to get worse.

What’s going on? The job hasn’t changed. It pays well. It is secure.

There is a simple answer. The vast majority of our labor force of 140 million people is between 20 and 60 years old. In round numbers, those between 20 and 40, called Generation X, represent 45 percent of the total work force. Those between 40 and 60, called baby boomers, make up 55 percent of the work force. This differential doesn’t seem all that great, but if you look a little deeper you will see that boomers outnumber Xers by 9 million people. That is a significant 10 percent difference.

Seventy-five percent of our blue-collar labor force is age 40 to 60. They went to college at the rate of 25 percent. This differential worked well for years, but now boomers are retiring en masse and there is no one to replace them.

Generation X has twice as many college-educated members as the boomers. They have more options and were far less inclined to consider the trades as their choice of work … and there are 9 million fewer of them. They have their pick of jobs.

So, what does all this mean to direct marketers? Gulp. The cost of producing our product is going to go up, way up. First, printing prices will escalate. There are no pressman apprentices. That’s what I said, none. Printers will have to pay more for printing talent. Shipping prices also will skyrocket because the United States is currently 200,000 truck drivers short of our current needs. As the economy improves, we will see this shortage get worse.

Let’s think about trucking for a minute. It is far-and-away the largest profession in the United States as millions of trucks are on the road 24 hours a day. Think about the number of truck accidents you hear about in your area and then consider how hard this dwindling labor pool is being pushed to get goods delivered. Clearly, there are people on the road who should not be on the road. The government is only going to allow this condition to exist for so long before we have a major crackdown and enforcement of trucking regulations. All of this spells higher costs.

Postage has to go up because the U.S. Postal Service is going to have to pay more to attract workers – and they are very reliant on the trucking industry. What’s this all going to cost us? Do the math. We could be looking at double our present costs. That’s the bad news.

Is there good news? Yes. Commercial mass media (radio, television and print) are losing audience and currently shooting themselves in the foot by raising prices and running more spots. There is no TiVo for direct mail. By the way, don’t you just love Tivo? Where else but in the United States could a company thrive by selling a device and technology that enables consumers to cripple a 60-year-old commercial model and essentially steal entertainment and information from its originators?

In this country, we have a time-honored tradition of paying for radio and television with our time and attention as we endure commercials. I hope the TiVo folks realize that once they wipe out our current form of commercial television, they are out of business, too.

And even the most devoted Internet followers check their “snail mail.” As long as the nation has mailboxes, we have a future. We could be the last and most effective means of reaching audiences of this century.

Finally, consider Generation Y, now under 20 years old. This generation will be the largest and most actively consuming generation in history. Generation Y is already the same size as the boomers and growing. Before this generation is done in 2010, it will be 100 million strong – with an appetite for consumption five times stronger than boomers had at comparable ages in adjusted dollars.

Direct marketers and their companies will be the clear winners in the decades to come – no matter what happens to costs, labor and the generational shifts that lie ahead. Direct marketing will reach Generation Y like no other medium can.

Kenneth W. Gronbach is president/CEO of KGC Direct, a Haddam, CT, marketing consultancy. He also is author of “Common Census: The Counter-Intuitive Guide to Generational Marketing.” E-mail him at [email protected]

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