Preparing for Future Consumers: Insights From the Research and Marketing Worlds
Most Americans are aware that the nation and the field of aging services will face serious challenges when 20% of the U.S. population finds itself over the age of 65 in 2030. Yet, the coming age wave has received so much media attention in recent years that many Americans have simply stop listening to the litany of predictions about how aging baby boomers will want to live, how much money they will have and what stresses they are likely to place on the nation’s social safety net.
Despite this information overload, aging services organizations must continue to study and prepare for the dramatic impact that aging baby boomers will soon have on their business models and marketing strategies, according to 2 experts who addressed the LeadingAge House of Delegates in April 2011. Paul Taylor, executive vice president of the Pew Research Center in Washington, DC, used findings from his organization’s recent studies to offer a glimpse at the demographics, financial status and attitudes of these future consumers. Christina Nicols, vice president and director of research at Ketchum, a global communications and marketing firm, recommended a variety of ways in which aging services organizations could use research from Pew and other sources to hone their services and enhance their communication with a changing target audience.
What’s on Their Minds: Issues That Matter to Consumers
“Getting old isn't nearly as bad as people think it will be. Nor is it quite as good.”
Thus begins a 2009 Pew report entitled Growing Old in America: Expectations vs. Reality, which suggests that consumers are not always very good at envisioning their aging experience. For one thing, younger people think that getting old will be much worse than it is likely to be. Almost two-thirds (57%) of 18-to-64 year olds surveyed by Pew thought they would suffer memory loss in old age, while a quarter (25%) of survey respondents over age 65 said this had been their experience. Similarly, while 45% of younger survey respondents expected to have a serious illness after age 65, only 21% of older respondents reported that this had been the case for them.
Younger survey respondents showed themselves to be almost as unrealistic about the benefits of aging as they were about its challenges. Most (87%) of the respondents aged 18-64 said they expected that old age would afford them more time for hobbies and interests, but only 65% of older people said that this was the case. About 80% of younger survey respondents said they expected to do volunteer work and travel more in later life, but only 52% of older respondents said they actually volunteered or traveled more.
“This data certainly provides us with an interesting window into human nature,” Taylor told the House of Delegates. “Getting old is something that every single one of us will experience, but it remains a great unknown for most of us. Perhaps as we face that great unknown, we have a tendency to overstate how different it will be from the present.”
Watching Current Trends to Chart an Unknown Future
It’s not surprising that respondents to the 2009 Pew survey on aging had trouble prognosticating about their own future. Experts intent on determining exactly what future consumers will want from their aging experience also face challenges making accurate predictions. The best we can do, according to Taylor and Nicols, is look closely at current trends and attitudes and make assumptions about how these trends and attitudes are likely to play out over the coming decades. The most significant trends to watch include:
A majority of non-whites. U.S. Census data suggests that sometime around the year 2040, a majority of Americans will be non-white. The Silent Generation, which represents the current population of people 65 and older, is now 80% white, but that percentage is gradually decreasing for younger age groups. For example, 61% of Americans aged 18-29, and only 52% of Americans under the age of 17, are white. Most Americans born in early 2011 are non-white.
“Clearly, the country is changing very quickly,” says Taylor. “Attitudinal data shows that this ethnic change is widely accepted by younger Americans, who view it as a natural phenomenon and, indeed, the only America they have ever known. For older Americans, however, this change is somewhat disconcerting because it could create a future society in which a predominantly white older generation is supported by a minority working-age population. How we manage the politics of these demographics will be one of the more interesting challenges we face in the decades to come.”
Financially stressed baby boomers. Pew research since 2009 suggests that the current economic recession has hurt virtually every American in one way or another. For a variety of reasons, however, adults age 65 and older have been more sheltered from the recession’s effects than other age groups. Foreclosure didn’t threaten many older homeowners because they had already paid off their mortgages or were close to doing so. In addition, many retirees may have found it easier to ride out the economic downturn because they had already downsized their lifestyles to some degree.
Unlike their parents, however, 50-to-64 year olds were hard hit by a recession that arrived at what Taylor characterizes as “a very awkward time” for them. Workers in their mid-to-late 50s who lost jobs during the economic downturn have faced enormous challenges as they sought new jobs, and some remain unemployed. In addition, the recession caused a significant subset of the baby boom cohort to lose confidence in its ability to afford retirement. This loss of confidence is especially true for baby boomers who had their expectations for retirement dashed when their 401(k)s lost significant value in the stock market.
Working longer for money and pleasure. The recession has affected the nation’s social structure in several ways. For one thing, the number of intergenerational households has increased from 12% in the post-war years of the 20th century to 16% today, as individual families sought to create a private safety net for financially strapped younger and older relatives. In addition, recession-related financial challenges caused some mid-life and older workers to set aside their plans for retirement and to plan instead for more years of work. As nearly a quarter of people 65 and older keep working, and as younger people have difficulty finding jobs, the U.S. labor force has aged considerably.
Significantly, economics is only part of the reason why aging workers choose work over retirement. A 2009 Pew survey found that only 17% of people over age 65 are still working because they need the money, compared with half of people aged 16-64. Significantly, more than a quarter (27%) of older adults said they continue to work because they want to work. More than half (54%) said they worked for both reasons.
“When asked why they want to work, these older Americans responded, ‘I want to stay active,’ ‘I want to be with other people,’ and ‘I want to feel like I’m doing something productive,’” reported Taylor.
Valuing independence, community, family and health. Several decades of focus groups and surveys conducted by Ketchum show that older people place high value on their independence, communities and families. In addition, the older generation’s fierce loyalty to America translates into a strong belief in the value of volunteerism at the local level. When Ketchum researchers ask older people what they want from their retirement, respondents universally emphasize the importance of aging in place, being in good physical and mental health, staying in control of their lives and not becoming a burden on their families. Many are concerned about outliving their retirement income, even though they find themselves shouldering fewer financial burdens than they did in middle age.
An older population that feels young. The 2009 Pew survey on aging suggests that the older we get, the younger we feel, at least in relation to our actual age. While survey respondents in their 20s said they felt their age, the majority of respondents aged 65-74 said they felt younger than their age – and not just a little younger. A third said they felt between 10 and 19 years younger than their chronological age while an additional 16% said they felt 20 years younger than their actual age.
Dissatisfied baby boomers. Despite their collective reputation as exuberant, carefree trend setters, members of the baby boom generation appear to be approaching old age in a gloomy mood. Eighty percent of baby boomers responding to a 2011 Pew survey said they were dissatisfied, compared with 69% of those aged 30-45 and 60% of those aged 18-29. Boomers aged 46-64 also stood out as the most pessimistic of any age group when 86% of them said it is getting harder for middle-class people to maintain their standard of living. Adding to the gloom, boomers were more likely than other age groups to say that their lives turned out worse than they had expected. On a decidedly positive note, people aged 75 and older were more likely than any other age group to say that life turned out better than they had expected.
“This seems to indicate that we become more optimistic and satisfied as we age,” said Taylor. “This offers us a very happy window into the human psyche by indicating that as you advance deeper into old age, there appears to be a tendency to count your blessings and make your peace with whatever has gone before. For my money, this is about the best thing we can look forward to as we get old.”
Translating Research Into Marketing and Programs
If used properly, many of the statistics and predictions about current and future consumers can provide aging services organizations with essential insights into issues that are important to older consumers and how those issues are likely to influence consumer preferences for services and supports. Translating demographic and attitudinal findings into appealing and effective marketing materials can be challenging, however.
First, aging services providers must be careful not to view national data in a vacuum, according to Nicols. Instead, an effective marketing campaign must begin with the recognition that national trends do not always accurately describe local populations and that local organizations need to become better acquainted with older adults in the local market.
Some local insights can be easily gleaned from secondary sources. For example, county reports from the U.S. Census Bureau can provide data on the number of local multi-generational households, which in turn can give organizations important information about older adults’ access to family supports and their need for outside services. Local demographic data about the number of households for which English is a second language can help paint an accurate picture of the region’s cultural makeup and provide insight into whether programs, services and marketing materials need to be designed with a particular ethnic group in mind.
Secondary research data must be complemented by original research, which can provide an organization with important insights into the target audience’s specific attitudes, expectations and values. Much of this information can be collected inexpensively through focus groups with prospective customers and periodic satisfaction surveys among current customers. Most organizations will find that market trends begin to emerge after as few as four focus group sessions. The organization may then choose to conduct an inexpensive survey of older adults in the community to clarify any issues on which focus group participants did not reach consensus.
Usually the most effective focus groups will begin with a general exploration of consumer attitudes, expectations, challenges and concerns, and then move to an exploration of attitudes about the organization’s specific programs, services and marketing materials, says Nicols. Begin by asking focus group participants to describe how they see themselves living when they are 65, 70 or older, and to identify the activities that would make up a typical day. Explore the level of retirement planning that focus group members have already completed. Paint a picture of what retirement could be like in your community or for people who use your services. Ask focus group members to identify the services, programs or amenities that appeal to them and the extent to which they value each service. Finally, use pointed questions to ascertain how much consumers are willing pay for the services they value.
Responding to Consumer Preferences
Being responsive to focus group feedback could involve tweaking marketing materials so they emphasize how current programs and services address consumer preferences and expectations. This may involve making sure that marketing materials feature people with whom the target audience can relate because they look like “real” people rather than models who were hired to pose for an advertisement. It is also important to include images that speak to the value that audience members place on family, health, independence and control. The most important feature of marketing materials will be their subtlety.
“Generally, audience members are bombarded with many messages every single day and they are tired of it,” says Nicols, who suggests that hard-hitting sales pitches have limited impact. “Consumers appreciate the fact that you are there to help them if they need help, but if they perceive that you are trying to sell them something, they will be turned off immediately.”
Being responsive to consumer preferences involves more than editing marketing materials, however. In some cases, an organization may need to change its programs and services in order to meet consumer expectations.
“Ultimately, the whole point of research is not just to learn how to communicate better,” says Nicols. “The goal of research is also to examine what you are offering people and to be open to changing your business model to meet the needs that you discover during that research.”
Ketchum’s research suggests that aging services organizations may be more successful in attracting older consumers if they:
Emphasize wellness. Many consumers are aware of and interested in the growing trend toward health, fitness and wellness. Marketing materials that capitalize on this interest are likely to have wide appeal in the older market. Be sure to mention if your organization offers opportunities to eat local produce, live in a walkable community and stay physically active. Health-related events, such as fairs that offer free flu shots, bone density scans and blood pressure screenings, can engage prospective customers while positioning your organization as an entity that is concerned about public health.
Promote an active lifestyle. Organizations will need to design future programs and services for an audience that, as Pew data suggests, feels 10-20 years younger than its chronological age. Marketing materials should acknowledge that consumers are vital and active, and programs should provide a sense of excitement and adventure without putting older residents and clients at risk of injury.
Support families. Older people will appreciate an organization’s efforts to include families in the programs and services they offer. A campus-based organization might build a playground that grandchildren can enjoy when they come to visit. Other organizations might offer health screenings for youngsters or arrange special outings for the entire family.
Build strong ties to the community. Residents and clients who value their independence will want to know that your organization can help them stay connected with the community they call home. Given the older population’s fierce loyalty to America, members of this generation welcome volunteer opportunities that help them continue to make a difference. Organizations can facilitate volunteerism by establishing and promoting partnerships with prominent and respected community organizations. In addition, work with local cultural partners to provide benefits that include discounted symphony tickets, family days at local amusement parks or group tickets to sporting events.
Offer affordable options. Due to the current recession, many Americans will come to their later years with less money than they expected. Consider creating programs and services that appeal to financially cautious baby boomers.
Provide easy access to the workplace. Older people who delay retirement will appreciate programs that are designed to deliver needed services in a flexible manner to consumers who are still working. Organizations might consider equipping campuses or other community sites with a technology infrastructure that facilitates telecommuting for residents and community-dwelling older adults. New residential communities might find a welcome home near businesses and government offices, where they can become a convenient living option for older adults who want to live near work.
Preparing for the Baby Boomers: A Final Word
Information can translate into market strength for aging services organizations striving to provide programs and services that consumers want and need. Yet, according to Taylor and Nicols, even valuable information has its limitations. While data about future consumers can point an organization in the right direction, it still only provides a glimpse into a future that is basically unpredictable. In addition, looking too far ahead could be risky since later-life preferences voiced by mid-life consumers could change dramatically as these adults age.
In light of these limitations, organizations will find that the most effective investigation into consumer preferences will be conducted among a demographic group that Nicols calls “the coming-of-agers.” These individuals, aged 55-64, are probably in the best position to share realistic expectations about aging and retirement.
“Because this age group is fairly close to retirement age, responding to its preferences doesn’t require that you look too far into the future,” says Nicols. “But these individuals are also far enough from retirement age to give you time to listen to their insights, tweak your business model and develop new services if necessary.”