Don’t Ignore Baby Boomers

Quick quiz: Which generation is huge in size, interested in experiences, loves to travel, owns digital devices and is active in social media? Millennials? No, it’s actually Baby Boomers. Surprised? The Baby Boomer generation tends to be overlooked, but they are an important consumer segment.

Baby BoomersQuick quiz: Which generation is huge in size, interested in experiences, loves to travel, owns digital devices and is active in social media?

Millennials?

No, it’s actually Baby Boomers. Surprised? The Baby Boomer generation tends to be overlooked, but they are an important consumer segment.

This population — born between 1946 and 1964 — are 74 million strong and have more disposable income than any other generation. They are more likely to be in the upper-income group. According to Pew Research, 27 percent of boomers are in the upper income group, which is the highest figure of all generations. Principal economist at Kantar Retail, Doug Hermanson, notes:

“Upper-income Boomers can sustain their pre-recession spending and be a strong driver of the consumer economy over the next five to 10 years. They have the money to spend. It’s a different mindset of saving before and now saying, ‘I’ve got to spend it while I’m here.’”

Let’s dig into these mass affluent Baby Boomers. These are defined as those who have $100,000-$250,000 in household income and over $250,000 in savings. They are an optimistic bunch, with 77 percent saying their goal is to have an interesting life.

Over 80 percent say they live a healthy lifestyle, and they are much more likely to give to charities. Pew Research reports that Boomers are living longer, with an average life expectancy of 80 years old, up from 68 in 1950. Many are now entering their retirement years. While about half of all adults say they feel younger than their actual age, 61 percent of Boomers are feeling more spry than their age would imply.

So what drives spending for this important segment? Quality is important to the mass affluent Boomer, with nine out of 10 saying they are more likely to value quality over brand name. They also like to shop within brands they feel an emotional connection with. And over 70 percent of Boomers across all income levels say the fact that they “like” a retailer is a driver of retail selection.

So, now that we have seen how they like to spend money, let’s take a look at what this generation plans to spend money on. About a quarter of Baby Boomers in the mass affluent category say they will spend more money in general in the coming year. Baby Boomers at the higher income level are more likely to prefer experiences over things: 73 percent of them say they prefer to spend money on experiences, vs. 69 percent of Millennials. Their spend categories emphasize travel, home improvement and charities.

Additionally, Synchrony Financial consumer surveys reveal the following:

  • The highest category of future spend will be travel. About 40 percent of mass affluent Boomers plan to spend more on travel next year. AARP estimates Baby Boomers spend more than $120 billion annually on leisure travel.
  • The second highest spend category is home improvement, with 32 percent of Boomers spending more on home improvement in the coming year, and 22 percent spending more on home furnishings.
  • Boomers are much more likely to say that they give to charitable causes, with 79 percent saying they plan in increase their charitable giving.

The Digital Divide: Boomers and Technology

Let’s take a look at the most talked-about difference between Baby Boomers and younger generations — digital technology. The reality is that the Baby Boomer population is on-par with younger generations when it comes to smartphone ownership, online shopping and social media access. Three out of four Baby Boomers own a smartphone, up 19 percent from a year ago. The generational divide exists in the usage of digital devices. Synchrony Financial’s research studies show that Boomers are much less likely than Millennials to use their smartphone for a multitude of tasks — from shopping to texting to social media postings.

But contrary to what some may think, Boomers have a great deal of access and interaction with social media. Ninety-two percent of Boomers say they have access to a social media channel — mainly Facebook (82 percent of Boomers have access to Facebook, up from 76 percent only a year ago). But they not influenced by social media for purchases. Only one third say they purchased a product after seeing it on social media, which is a significantly lower figure than that of younger generations: For Millennials, that number tops 70 percent.

How well does your business cater to this large and important segment of the population? Generalizations are difficult for any population of this size, but in general, Boomers are optimistic, secure and not done spending. Brands who provide a great shopping experience, high quality and seamless digital technology will go far in attracting this important segment.

Sources: All data is sourced from the following three studies, unless otherwise noted: Synchrony Financial 2016 Loyalty Study, Synchrony Financial 2016 Affluent Survey and Synchrony Financial 2016 Digital Study. All references to consumers and population refer to the survey respondents.

Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial.

Millennial Microaggression: Aren’t All Seniors Digital Dimwits?

In both my consulting business and my teaching I frequently hear Millennials talk about seniors not being tech savvy. While the term “seniors” has different age boundaries, some as low as 50-plus and others as high as 70-plus, the message comes through that most Baby Boomers and those older than them don’t have the digital chops to receive messages online and through their smartphones.

gen yIn both my consulting business and my teaching I frequently hear Millennials talk about seniors not being tech savvy. While the term “seniors” has different age boundaries, some as low as 50-plus and others as high as 70-plus, the message comes through that most Baby Boomers and those older than them don’t have the digital chops to receive messages online and through their smartphones.

So when an agency’s digital media specialist says, “We’ll need to do some offline stuff for the senior market” or a student working on a marketing project says, “You can’t reach the older demographic on social media,” I have to say, “You know, you’re talking about people my age.”

It makes them pause because they may be friends with me on Facebook, or they may be one of my 1,000-plus LinkedIn connections. They may have collaborated with me on digital campaigns for their clients or been coached by me in the Collegiate ECHO Challenge. Some have even been lucky enough to take an Uber with me to a lunch that I booked on OpenTable (I usually have to buy). So they know my capabilities, but don’t seem to connect the dots that there are others my age and older who know their way around the digital space.

Some of the older digital natives have a vague recollection of accessing AOL on dial-up, and some may remember texting using the telephone keypad of a flip-phone (press the number two three times for the letter C). But that’s about as far back as their technology journey goes. They’re amazed when they hear stories of a workplace before email or even fax machines and primitive home electronics. “How did you get anything done?”and “OMG, black and white TV?”

Pew Internet data does show that fewer people aged 65-plus have smartphones and broadband access than younger age groups. But my personal experience has been that, more than age, the factor driving the digital divide is workplace experience. If someone in their 60s worked in an environment where they used a personal computer most of the day, they are more likely to be tech-savvy than someone half their age who works as a skilled tradesman and uses a different set of tools.

So while the recent focus on microaggression is centered mostly on racism and sexism, let me add ageism to that mix. Recently over dinner with a student, I was discussing a marketing project aimed at Boomers and he said, “So you have to figure out what all these old people want.” Really!?!

Direct Mail for All Generations

Many times, marketers feel that direct mail works best for older generations. While it is true that older generations respond to direct mail, all the other generations do too. By limiting expectations, we are leaving a large chuck of the population out of direct mail marketing.

Screen Shot 2016-06-14 at 12.52.28 PMMany times, marketers feel that direct mail works best for only older generations. While it is true that older generations respond to direct mail, all the other generations do too. By limiting expectations, we are leaving a large chuck of the population out of direct mail marketing. This means you are leaving money on the table. Instead, let’s look at how we can leverage direct mail across all generations while increasing response.

There are four main generations to target currently with direct mail:

Traditionalists: Born 1945 and Before

This group is retired and enjoys getting direct mail. It’s a channel they trust and use when giving donations to nonprofit organizations.

Key Points: community minded, strong on personal morality, civic duty minded, loyal, team players, save money, pay with cash, avid readers, disciplined and self-sacrificing

Baby Boomers: Born 1946 to 1964

Some people in this group are retired, while others are still out in the work force. They, like the traditionalists, enjoy and trust direct mail.

Key Points: self-righteous, self-centered, buy now on credit, women were the first to work consistently outside the home, divorce generation, optimistic, driven, one of the largest generations in history, like hierarchy and tradition

Generation X: Born 1965 to 1976

This group is all out in the work force. They trust direct mail, but have less time to view it.

Key Points: first latch-key kids, individualistic, government and big business mean little, feel misunderstood, cynical, want to learn, want to make a contribution, late to marry and quick to divorce, into labels/brand names, deeply in credit card debt and cautious

Millennials: Born 1977 to 2000

This group is spread between working force and students. Many still live at home with their parents. They enjoy getting mail since they do not get a lot of it. They trust direct mail more than any other marketing channel.

Key Points: very large group, optimistic, focused, omnipresent parents, respect authority, they live with the reality that they could be shot at school, like to work in teams, want everything fast and immediately, they feel special and expect to be treated that way, assertive and prefer a relaxed work environment

After looking at each of these groups, how can we best target our direct mail? Keep in mind that identifying and solving pain points with direct mail gets the best response. By creating personas for groups of people based on buying history, interest, demographics, firmographics, psychographics, as well as generational information, you create a very strong persona to target. By understanding who your recipients are, you are better able to send them the right offers. This translates into greater responses.

Let the power of direct mail be driven by your database — not by guessing. In 2016 you need to personalize your direct mail which will require you to use multiple offers within a campaign. Your recipients expect to get direct mail that is useful to them, otherwise it’s considered junk mail and thrown away. Don’t end up in the trash bin — give them an exciting offer they cannot refuse!