By Bruce Britt
An author and internationally respected demography expert, Kenneth W. Gronbach has spent years crunching numbers to determine how marketers can reach across generational divides to appeal to the broadest audience possible. But statistical calculations aside, Gronbach says, he finds the clearest proof of what works in a much more familiar place: his family’s mailbox.
“[A local retail store] sends coupons to my teenage girls,” says Gronbach, founder and CEO of Connecticut-based KGC Direct. “And they always direct [the girls] to their Web site for more information and additional deals. That’s the way it should be done.” In mixing its marketing media, he says, that local store has found that even Web-savvy young consumers like his daughters enjoy the idea of getting something in the mail addressed to them and are more than happy to respond, especially digitally. It also has discovered the power of what Gronbach insists will be a key to marketing success in coming years: demographics.
The recent author of The Age Curve: How to Profit from the Coming Demographic Storm, Gronbach reminds us that, with Baby Boomers moving into retirement and their parents well into old age, direct marketers are going to need a deeper demographic understanding of younger customers if they hope to remain relevant.
With 100 million young American consumers in its ranks, Generation Y — aka the “Millennials” — has replaced the nation’s 78 million Baby Boomers as the largest consumer group. As a result, Gronbach says, many marketing tactics and strategies designed to appeal to the once dominant Boomer generation must now evolve for the younger crowd. (Likewise, marketers who still covet older generations like the Boomers will also have to keep pace with demographic shifts to adjust their messages and media mixes as their targets’ life cycles spin toward the winter years.)
Demographics allow marketers to better segment all of these groups, says Gronbach, and to avoid erroneous assumptions about how to reach them. He cites many brands’ ham-handed efforts at digital marketing to Millennials as a prime example of why demographics are key. “We know absolutely that the Internet is going to play a part in the future of marketing, but we also know there are some built-in land mines,” Gronbach says. “There’s a resistance to advertising on the part of the users of social media sites. If you start jamming things down their throats with pop-ups, or introductions that can’t be shut off, that’s a slippery slope. You’re almost in danger of making enemies.”
On the flip side, Gronbach says, his research shows that traditional forms of direct marketing, most notably direct mail and outdoor advertising, continue to appeal to younger buyers. “With direct marketing and billboards, the habits of the viewer haven’t changed,” insists Gronbach. “No one has taken their mailboxes down, and the outdoor is still right there on the road facing you. Yet for some reason [advertisers and marketers] are missing two of the biggest opportunities.” Everyone checks the mailbox, Gronbach notes in his book, “even the most devoted Internet followers.” His book adds, “Direct marketers and their client companies will be the clear winners in the decades to come, no matter what happens to costs, labor and the generational shifts that lay ahead.”
Youth movement
In anticipation of these changes, Gronbach has spent considerable time sketching profiles of six distinct generations of consumers: the GI Generation (born 1905 to 1924), which includes those who fought in WWII; the Silent Generation (born 1925 to 1944), the children of the Great Depression, including those too young to serve in WWII; the Baby Boomers (born 1945 to 1964); Gen X (born between 1965 and 1984); and Gen Y (born between 1985 and 2004). And finally Generation Z, born 2005 to present.
Gronbach says that the older generations are waning considerably in influence, and the Boomers, though still an economic force, are rapidly retiring. Meanwhile, Gen X, with about 70 million American consumers, is still smaller than the Baby Boomers and lacks the same punch at the cash register.
But Millennials, he says, more than make up for shortcomings in the preceding generations. “Generation Y is going to make themselves felt like no other generation in the history of our nation,” forecasts Gronbach. “They are bright, educated, and they can multitask. They have a social conscience. They don’t see [race].” Barring unexpected economic disaster, Gronbach says, these Millennials will fuel explosions in a wide range of industries, from apparel to car sales.
Problem is, even though Millennials represent the most massive marketing opportunity since the Boomers, members of Gen Y can be tough for brands to reach, Gronbach says. While Gen X is thought to respond to both traditional and new media, members of tech-savvy Gen Y are more fickle. “With the exception of the Internet, Generation Y is not being reached with any kind of media,” Gronbach complains.
Gronbach refers back to his daughters to drive home his point. “Neither of them has ever read a newspaper in their life,” he says. “Neither of my daughters listens to radio. Magazines? They will go online and pick their stuff.”
He adds that television doesn’t fare much better with younger consumers. The classic TV business model, where networks offer “free” entertainment in exchange for viewers watching heaps of 30-second ads, is sputtering.
“It was a good deal, but we’ve gone from five to 10 commercials an hour to as many as they can wedge in,” Gronbach says. “They’ve breached the deal. When people are on Facebook and they can’t get rid of a pop-up, they resist. Internet users don’t transfer the same attitude over from their TV viewing.”
Find what works
Gronbach believes some traditional marketing outlets do have greater potential than others to reach younger consumers. He contends that mail, with its tactile power and potential for personalization and precise targeting, is among those channels that offer cross-generational appeal: “If you mail something to somebody, they get it.”
He adds that direct mail can sometimes act as the Trojan horse that allows marketers to pique Millennials’ interest before making good on the vaunted potential of digital media. “If you have a really good digital presence, a lot of times it’s like an amusement park on a desert island,” Gronbach says. “Either people don’t know you’re there, or they don’t know how to get there. If you want to have some kind of co-promotion between online and direct mail, there’s absolutely nothing better.”
Outdoor media possess the same inescapability as direct mail, he says, and he sees plenty of room for improvement. “Billboards where the images change are a real step in the right direction,” Gronbach says. “I think billboards can speak to the cars. You could actually put a radio signal in the boards, where if someone was interested in the board they could hear a message. There are lots of things you can do.”
He says that marketers must be careful to consider the environmental impact of their vehicles, too, as Millennials tend to be more eco-conscious than older generations of consumers. “Print everything you have on recycled paper, and make sure the recipient knows it,” he says. “Come up with some angle that makes you the friend, not the enemy. It’s not that hard.”
Respect elders
Of course, he urges marketers to do the same when reaching out to older generations, who, despite their diminishing influence and comparatively small numbers, shouldn’t be forgotten. He points out that Boomers, for instance, still wield about $2 trillion in annual buying power and that Gen X still includes nearly 70 million American customers.
In reaching Boomers, he says, marketers should know that they are receptive to multimedia messaging, but respond best to many traditional forms of direct marketing because they are more familiar with them. Retiring at a clip of one every eight seconds, Boomers are more age-conscious and respond well to marketing messages that recognize this. “If you want to sell something to the Boomers, offer up something that will keep them young, because they are going to be playing air guitar in rest homes,” he says.
In some ways, Generation X — composed of those born between 1965 and 1984 — mirrors the Boomers. Gen X was already around by the time the technology revolution of the 1980s and 1990s kicked off, so while its members certainly aren’t tech-averse, they continue to make good targets for multimedia marketing campaigns that blend new media with old.
“Gen X is bilingual,” explains Gronbach. “They speak cyber as a second language — but do not respond to Internet marketing efforts. They are as at home in the cyber world as they are with television and, in some cases, radio. They do not read newspapers at all.”
However, they do read what shows up in their mailboxes, provided they consider the offers genuine and compelling, says Gronbach. “They are very savvy and see through marketing gimmicks,” he warns. “This is an esoteric group with eclectic tastes and an entitled attitude.
They have vexed Madison Avenue for 20 years,” he says, although Gen X “can’t consume at the level of the Boomers who preceded them because they don’t have the critical mass.”
At this point, the same can be said of the GI Generation (86- plus years old) and the tiny Silent Generation (now 66 to 85 years old), says Gronbach. “Their consumption levels have dropped like a stone,” he notes. He says the Silent Generation will pose particular challenges to certain industries because of its small size compared to the GI Generation. “They’re going to disappoint the assisted living facilities, the funeral parlors and the cremation companies,”
Gronbach predicts.
Still, these older consumers shouldn’t be completely forgotten, says Gronbach. And marketers who do seek them out will generally find that they respond best to time-tested marketing methods. “They are devoted newspaper readers, especially the obits,” he points out. “They inhale talk radio and overnight television. They are also direct mail junkies and religiously use coupons and anything else that saves them money, like senior discounts.”
He says they also offer a viable audience for products aimed at kids. “The one real bright spot in their consumption,” says Gronbach, “is called the ‘Bubby Factor:’ They will spend money on their grandkids with a vengeance.”
By the numbers
Of course, Gronbach cautions against making too many assumptions even about older consumers. The hard data, he says, allow for much more educated guesses. And in an age where marketers are more pressed than ever to guess right about consumers’ desires and to demonstrate verifiable results from their campaigns, hard data should be embraced as a CMO’s best friend.
”The behavior of the consumer is very predictable,” says Gronbach. “The Bureau of Labor Statistics has been writing about [demographics] for maybe longer than 30 or 40 years. We know at what ages people buy automobiles, their first houses or the most clothes. We know when consumption peaks. Demographics don’t lie.
Dissecting a Millennial
These kids today They’re confident (at times to the point of arrogance) about their ability to contribute and make a difference in the world.
Attitude Adjustments Huge in both number and potential impact, they’re a sharp departure from Gen X trends and the opposite of Boomer youth behavior.
A bunch of know-it-alls Technology-enabled in every aspect of their lives from where they shop to what they buy, read, cook, eat and watch.
Six Generations of Consumers
GI GENERATION— (born before 1925) Made up of those who lived through and fought in WWII. Also known as “The Greatest Generation” because of its contributions to the second World War. Buying power considered negligible.
SILENT GENERATION — (born 1925 to 1944) Those generally thought to be too young to fight in WWII and those born during the war. The smallest generation of the 20th century as a consequence of low Depression-era birth rates. Buying power considered negligible.
BOOMERS — (born 1945 to 1964) Children of the GI and Silent Generations. The second largest generation (78.2 million Americans) and one of the most coveted, with about $2 trillion in annual buying power.
GEN X — (born 1965 to 1984) Largely children of the Silent Generation, numbering around 69.5 million Americans. Regarded as technologically “bilingual,” but do not respond to Internet marketing efforts.
GEN Y — (born 1985 to 2004) Also known as “Millennials,” “Echo Boomers” and “The Net Generation.” They are the children of the Baby Boomers and the largest generation at 100 million Americans. The most coveted buying group, consuming at a rate of more than five times the Baby Boomers (in adjusted dollars).
GEN Z — (born 2005 to present) With 4,317,000 babies born, 2007 was the largest birth year in U.S. history. Latinos make up about 14 percent of our total population but accounted for more than 25 percent of total babies born in 2007. This new generation is already more than 20 million strong and is sure to be an exciting and challenging market.