Business Boom

Born between 1946 and 1964, this generation of Americans turns 44 to 62 this year and figures more than 75 million members. Florida faces more competition from other warm-weather retirement destinations than in previous generations, but a significant number of baby boomers still are expected to make their way here as they reach retirement age.

But don’t expect them to act or think like their predecessors. They don’t want to be called "senior citizens," "aging" or "retirees," says Chuck Underwood, founder of The Generational Imperative, a Cincinnati-based consulting firm. And don’t even think about calling this their "golden years," or their future as "prime time."

"To the boomer generation, every second of their lives has been prime time," he says.

If this group is a potential customer base for you (and, as Underwood says, it should be), a marketing strategy that focuses not only on their age, but also on their desires and interests is crucial.

Gulfshore Business asked Underwood for his insight into the baby boomer market, and spoke to three local businesses trying to attract that group.

Why tap into the boomer market?
A: In the [U.S.] census of 2000, baby boomers supervised 42 percent of America’s households, but they controlled 50 percent of American wealth. In the eight years since that full census, their purchasing power has only increased, for several reasons. They are now ascending to the apex of their careers and their earning years, and they are also receiving the largest transfer of wealth in human history as their parents pass away—the first generation of parents in widespread numbers to be able to leave an estate to their children. That’s thanks to the entitlement and retirement-security programs that were launched in the 1930s and ’40s. Now the G.I. generation, which this year is age 82 and older, is the first generation whose estates are benefiting from those pieces of legislation, now nearly 70 to 80 years old. [Businesses should] pursue the boomers because they have all that money, and they’re willing to spend it.

What are some characteristics of the baby boomers?
A: They are an instant-gratification generation. They are living life younger than any prior generation to occupy their current age bracket. They are eternal students, and they will pay to learn. Not only that, they are the workaholic generation, the career generation. This generation defines itself by its work and its contribution, so boomers will never fully retire. Many of them will transition to second or third careers. Many will volunteer. Many will go back to college to learn a new discipline in order to launch their next career. All this will only strengthen their purchasing power.

Do you know the amount of that purchasing power?
A: Many have tried to estimate it, but none has expressed any confidence in the figure they have come up with. I’ve heard everywhere from $400 billion to more than a trillion [dollars]. It is probably a staggering figure. The G.I. generation, which was born between 1901 and 1926, [was] a massive generation [that is] dying off. They’re bequeathing their money to another massive generation, their children. Just by the simple arithmetic of warm bodies and savings accounts, you can get a sense of the staggering purchasing power of the baby boomer generation.

What are the payoffs of focusing on the baby boomers?
A: The payoff is bottom-line net profit to the company or the organization that pursues that boomer money and does it effectively. Boomers are very demanding consumers, and if marketers don’t thoroughly understand this generation’s core values and consumer attitudes, [they’ll] be eaten alive by the boomers. Anybody who views boomer money as easy money is in for a crash.

What boomer values do businesses need to recognize?
A: This generation has a very strong core value of "forever young." Boomers think young; they live young. If you market to baby boomers in the same way that you marketed to the older silent generation and G.I. generation, you will be preparing for the last war. The boomers require different products, different services, and especially different marketing and advertising messages than the older generations when they occupied the boomers’ current age bracket.

What industries should look at boomers as clients/consumers?
A: The list is quite long. Probably the shorter list would be which industries should not pursue the boomers; about the only one I can think of is pimple cream. Career-
oriented industries, financial services industries, any of the various money industries and investment houses [should target boomers]. Real estate is huge.

How can businesses develop a strategy for targeting the boomer market?
A: Companies and organizations need to be trained in generational dynamics, because in just the last eight to 10 years, we’ve learned that generational values and beliefs exert remarkable influence on Americans’ consumer decisions. Demographic, psychographic and age research are no longer enough. A company needs to understand the boomers’ unique values that came out of that generation’s unique formative years—’50s, ’60, ’70s, ’80s. Once they understand generational values, they can craft products and services in the direction of those values. That’s how generational marketing works.

What pitfalls should businesses watch out for?
A: The pitfalls include the following: Companies do age research instead of generational research and they get bad findings. [Companies use] marketing and advertising that is such transparent pandering that boomers recognize and recoil from it. Other marketers assume that the boomers, with all that money, will be an easy mark. They’ll lunge at the boomers without a well thought-out marketing plan.

Do ads, such as those for new communities that show two baby boomer friends smiling and doing an acitivity together, work?
A: It’s the heavy-handed approach to real estate advertising. They know boomers are more physically active and vigorous than older generations. They know to show [them playing] tennis or surfing. They simply have ratcheted up the leisure activities in their ad and assume that’s enough for the boomers. That’s a pretty uncomplicated way to do it, and it’s probably not effective. They need to understand the boomers much more deeply than many of those ads suggest they do.

What should people in the real estate sector know about boomers?
A: The first wave of boomers—currently aged about 55 up to 62—is an anti-snob, anti-materialistic segment of the baby boomer generation. Many upscale retirement communities have done well with basic snob appeal, with the eliteness of the community, trumpeting their wealth. That’s not going to work with first-wave boomers, who in the 1960s protested against that type of snobbery. It was a snobbery they had seen in the 1950s, when they were very young and America was a materialist nation. Those first-wave boomers oftentimes will recoil from what appears to be a snob-driven, gated community that is presented as being for the beautiful people.

Can you market to boomers without losing older and younger customers?
A: It is possible to do generation-specific marketing to multiple generations—one ad for baby boomers, one ad for the silent generation, one ad for Generation X. You can do one without alienating the other, because the ads are often going to be placed differently. There’s a good chance one generation will not see ads meant for other generations.

What do boomers want in products and services?
A: Boomers pay for convenience. They have little tolerance for products that go bad, and they will pay extra for quality. Boomers demand common courtesy, professionalism and time efficiency from the people who are serving them. They don’t like to waste time. They want those people serving them to know their product, to know their service. They want common courtesy they’re not getting from some of the younger generations. They have incredible core values of empowerment and engagement and social activism. They want to do business with companies and organizations that embrace those same values. Boomers came of age with a fair number of bosses whose ethics clashed with the boomers’ ethics. They want to buy from companies and organizations who are good corporate citizens.