by Sylvia Long-Tolbert, PhD
The current 50+ population is purportedly the most financially secure cohort in American history. As such, this market segment is low hanging fruit for offerings such as personal care, healthcare, transportation, housing, and food. However, these consumers also represent untapped potential for such products/services as leisure and travel, gifts and donations, and indulgences befitting the lifestyle of aging adults in the 21st century.
Unfortunately, Millennial graduate students neither widely nor enthusiastically embrace my rosy interpretation of the 50+ market segment. In fact, from recent years teaching marketing courses to Millennials or advising them through numerous case competitions, I have observed an overt bias.
Some students consciously reject “old“ people as a viable market segment, some perceive the 50+ segment as high risk and unattractive, while others are barely aware of the 50+ market. This myopic view of the 50+ consumer is understandable, but problematic. Pragmatically, this segment is not to be ignored. According to research published by Hubspot—“The Ignored Generation: 25 Stats Brands Should Know About Marketing to Baby Boomers—the 50+ cohort has purchasing power that far exceeds that of Millennials, with spending levels and consumption habits likely to increase significantly in the near future.
To deepen students’ awareness and appreciation for aging customers, I adjusted a few learning objectives and tweaked class discussions to reinforce segmentation principles and mechanics. The following practices have helped to firmly establish the foundational importance and role of each to direct marketing planning.
- Specify priority of proposed market segments into primary, secondary, and tertiary targets. It is impossible to build sustainable value from a single customer segment, single campaign, or single transaction. Marketing to customers over the lifespan is an underdeveloped strategy, but one that could be highly effective when marketing to the 50+ target segment. Sports Illustrated (SI) executed this concept with precision for its 2017 Swimsuit cover that included Christie Brinkley and her daughters. Christie, who first appeared on the SI Swimsuit cover more than 35 years ago, triggers a nostalgic moment for baby boomers and an “ah-ha” moment for Millennials, while administering a dose of realism about aging women.
- Impose a multi-attribute description for every proposed target segment. Age (and other demographics) are merely a starting point for identifying meaningful and distinct customer segments. Lifestyle, psychographic, spiritual, and value influences are not merely textbook fodder. They offer depth and texture needed to develop persuasive content. For example, I rely on my multidimensional conceptualization of hip old people (HOPs) to illustrate how their consumption habits, lifestyle preferences, intellectual interests, and cultural values help to establish them as a distinct segment with untapped potential for atypical products/services.
- Underscore the significance of establishing stable and profitable market segments, albeit small in size relative to primary market segments. The 50+ target market can help direct marketers achieve important strategic objectives rather than specific conversion goals. For example, the 50+ market comprises only 10-12% of Uber’s total revenues. Yet, it creates a relatively stable revenue source and builds brand awareness among a group of consumers who will eventually forgo car ownership and driving privileges.
- Evaluate the 50+ target segment’s attitudes regarding direct marketing. Most 50+ consumers were socialized using direct marketing innovations, including door-to-door, catalogs, TV shopping networks, and 800 numbers. Vestiges of those shopping preferences still linger on (e.g., QVC). Thus, familiarity, comfort, and acceptance of direct marketing as a concept cannot be minimized when introducing new shopping platforms (e.g., mobile marketing) to those who previously valued the advantages of direct marketing.
I am especially grateful to DMAW/EF for its ongoing sponsorship of the MAXI Case Competition. The cases entrusted to DMAW/EF convey the complexity of market segmentation for a diverse group of clients and the interesting nature of direct marketing as a profession. Additionally, the case competition reveals problems likely to occur during direct marketing implementation, especially when a project is based on a poorly conceived segmentation strategy. Most important, the level of student engagement with the client and the quality of feedback from these industry experts bolsters the value of the experiential and applied aspects of graduate education.
Sylvia Long-Tolbert, PhD, is a marketing professor with the Carey Business School at Johns Hopkins University and founder of Know More Marketing, LLC. Her contact information is firstname.lastname@example.org.