What ‘senior’ means in marketing
Originally, the word ‘senior’ referred to the most experienced soldiers in the Roman legions. Over time, the term evolved differently in different countries. It became simply ‘Mr’ in Spanish and Italian, but ‘seigneur’ (lord) in French. As for English, it undoubtedly remained the most faithful to the original Latin, maintaining the idea of ‘maturity’ and ‘expertise’. And in the fashionable professions these days, the word ‘senior’ is one of the essential buzzwords: Senior Account Executive, Senior Brand Manager … Senior Vice President! What wonderful connotations… Today, the word “senior” is mainly used to refer to the over-50s. Why so young? It would be so reassuring to tie it in with the notion of retirement. Or better still, to old people’s homes (often renamed seigneuries in French). But we could also ask ‘Why so old?’ After all, great sportsmen often retire at 30.
There are a number of objective reasons for this:
First of all, for marketing people, 50 marks the death of the consumer. When we’re talking about the general public, don’t we always refer to the ‘under-50 housewife’? A horrible male chauvinist expression, to which our Anglo-Saxon neighbours prefer the highly technical label ‘principal person responsible for purchasing, aged 18 to 49’.
Then, for the various population experts, there is a succession of important events that occur around the age of 50 and which plainly change people’s lives. At 49, on average, women become grandmothers for the first time. Three years later, in general, they’re in the throes of the menopause and are telling their husbands it’s high time to stop smoking and to watch their diet. At fifty, the main mortgage is paid off, and at 52 their youngest children leave the nest. A few years later, their own parents will die. This sad news will often result in a sizeable inheritance (at 57, on average). Over and above the strange terms used in marketing, then, everything clearly leads us to see 50 as a turning point – one that it is convenient to take as a starting point for a so-called ‘seniors marketing’ strategy.
What a ‘senior’ is not Senioragency (www.senioragency.com ) has had the opportunity to run hundreds of in-company seminars. Never have we presented seniors as a single group. On the contrary, we have systematically stressed the need to establish coherent segmentation criteria in relation to the company’s characteristics.
There are various options: first of all, we need to understand that the ‘senior’ population as such does not exist. Over-50s form too large and varied a group to be summed up in a stereotype. Without going as far as marketing’s distant ideal, the ‘one-to-one’, there must at least be segmentation.
One of the options is the generational approach, which has the advantage of being dynamic and taking the sociocultural context into account. We could thus refer nowadays to the May 68 generation (born between 1945 and 1955); the Algeria generation (born between 1935 and 1945); the Liberation (referring to the Liberation of France in 1945) generation (born between 1925 and 1935); the Wall Street Crash generation (born between 1915 and 1925); the Roaring Twenties generation (born between 1905 and 1915) and the Verdun generation (born between 1895 and 1905).
In fact, this is a view of things that we in our agency are tending more and more to share, particularly as a way of accounting for differences in behavior between ‘new seniors’ and their elders. But there are many other ways of segmenting this group, each of which has its merits: age, health, occupation, time available, social class, etc. None of these is perfect, of course, but each can be used to enrich the others. For our part, we generally opt for age as the basis for segmentation.
Despite being an artificial approach to things, it has numerous advantages:
– Simplicity. Everyone understands the principle and the content, which is quite something when it comes to a subject as little-known as seniors. Many a more accurate and original segmentation method has not met with the success it deserved because it was poorly understood.
– Applicability.
Age is a concept that can be found at the heart of nearly all market research and all planning tools. It is therefore compatible with media tools, for example – something that is fundamental.
– Universality.
Age as a variable has a similar, comparatively objective impact whatever the sector or country concerned. It is a determining factor for life cycles and even for generations. It is an approximative segmentation method, but one that is more comprehensive and often more objective than most of the alternatives.
– Durability. The concept of generation is an appealing and dynamic one. But since the generations are constantly in motion, they are obviously impossible to handle consistently over time. A 50-year old nowadays is quite different from the generational viewpoint from a person of the same age 20 years ago.
– Effectiveness. Segmentation by age has long been applied in many marketing programs. We’ve seen other methods come and go, and be challenged, but age has continued to dominate almost everywhere.
Do we really need to reinvent the wheel? For Senioragency (www.senioragency.com ) we have established and given a name to four age segments. These have been put to good use over the last five years and are likely to remain unchanged for a good few years to come. The four segments are:
– the ‘Happy Boomers’ group (50 to 59-year olds)
– the ‘Liberation’ group (60 to 74-year olds)
– the ‘Peaceful’ group (75 to 84-year olds)
– the ‘Very Elderly’ group (85-year olds and over) One thing is sure: seniors as they are depicted in most advertising do not exist! Yes, there are over-50s who are systematically disregarded in the vast majority of companies’ marketing policies. Yes, there is an experienced population out there that is more demanding, better-off overall, and often has more free time. But there is no single large group of ‘old people’ that nod off in a recliner, sipping seltzer water
Even today, products targeted at seniors are called ‘niche products’. It’s a funny kind of niche that contains no less than a third of the population of all the big industrialized nations. Everyone knows that there are more over-50s than under-20s. Our society is undergoing enormous changes, and the number of older people is going to increase in the years ahead. By 2040, seniors will make up half of the population of
Europe. We will really live up to the ‘old continent’ epithet then.
|
1962 |
2000 |
2010 |
2020 |
-20 yrs old |
32% |
25.6% |
23.8% |
22.5% |
+60 yrs old |
17% |
20.6% |
23.1% |
27.3% |
(source: National Institute for Demographic Studies (INED), based on INSEE data), with a fertility rate of 1.8) Three well-known phenomena account for this change: the increase in life expectancy, fall of the birth rate, and large number of baby-boomers reaching the age of 50. The combination of these three factors has led to a spectacular rise in the number of seniors. We could even call it a real tidal wave, unprecedented in the history of mankind. It really is unprecedented, since, in the past, life expectancy didn’t even reach 50 (45 on average in 1900). This is probably one of the main reasons for unfamiliarity with the target group: we don’t have any experience of it. In fact, we don’t even know exactly what ageing is. Seniors themselves are the first to be surprised when they each 60 in good shape. Even the medical profession isn’t ready! And of all specializations, geriatrics is the least popular by far. Here’s a very telling story: an article in a very serious publication expressed concern about the increasing number of cases of breast cancer in women. Was this due to the hole in the ozone layer? Pollution? GM crops? Of all the hypotheses, the most obvious and most likely was overlooked. There are more cases of breast cancer nowadays because there are more women of an age likely to contract the disease. In such a context of ignorance, it is not surprising that marketing and advertising professionals have their own blind spot.
‘It’s where the money is’
The myth of the little old lady of slender means who ekes out her widow’s pension is an enduring one. And, unfortunately, there is still some truth in it. Among the oldest strata of the population, rare were the households where both husband and wife had a job and the wherewithal to make proper financial provision for their retirement. Fortunately, in the post-war period, changes in people’s attitudes brought about rapid changes in society: supplementary insurance schemes, women in the workforce, access to higher education, etc. Thanks to all these changes, retired people are, for the most part, among the most comfortably-off nowadays. Is this surprising? After all, they worked for over 40 years, tightened their belts to be able to pay off their mortgages (70% are home owners!) and give their children an education. They also paid taxes, Social Security contributions, etc. If all these efforts over the years did not lead to an improvement in retirees’ material situation. our model of society would be called into question …
Percentage rate of personal assets
AGE
|
Savings accounts |
Savings products |
Mortgages |
Bonds or investment funds |
Mutual funds |
Shares |
– 50 |
51.2% |
84.2% |
45.5% |
2.7% |
6.6% |
10.3% |
50-59 |
15.9% |
82.0% |
47.6% |
5.6% |
12.6% |
16.7% |
60-69 |
13.4% |
81.7% |
38.4% |
7.2% |
14.6% |
16.4% |
70+ |
19.5% |
85.2% |
26.3% |
9.6% |
16.4% |
14.4% |
Total: 50+ |
48.8% |
82.9% |
37.4% |
7.5% |
14.5% |
15.8% |
(Source: Le Marketing Book Seniors – Secodip 2000)
They are very dynamic consumers Affluence is, of course, no guarantee of consumption. Many advertisers still think that the over-50s keep all their money in bank accounts when it’s not under their mattresses. The most commonly held belief is that while outgoings decrease with age, so does expenditure. The typical senior, then, is first and foremost provident. Except where health is concerned, he will descend irremediably into miserliness, but will leave his descendants a sizeable inheritance. An elderly consumer will accordingly have few needs or desires, and will be content always to buy the same product, preferably the cheapest one. Needless to say, the reality is quite different. Affluence often results in the desire to treat oneself, whatever the age of the consumer. With the rise in importance of the post-war generations, who did not live through the same period of hardships as their predecessors, seniors have become the top customers for many products and brands. They are the leading purchasers of private cars, mineral water, dairy produce, cosmetics, luxury travel, electrical appliances, designer clothes, etc. The tables below clearly indicate that seniors are positive, dynamic consumers.
Purchase made:
|
Total
|
+ 65 |
out of need |
33% |
34% |
for pleasure |
9% |
15% |
Price sensitivity
|
1993 |
1994 |
1995 |
1996 |
18-24 |
79% |
81.5% |
85.3% |
84.5% |
65+ |
74.8% |
73% |
76.7% |
65.3% |
Price sensitivity in the young |
+ 5.2 pts |
+ 8.5 pts |
+ 9.4 pts |
+ 19.2 pts |
As for the notion of over-cautious buying, it is refuted by all the figures and market research. Obviously, by the age of 50, many major items will already have been bought. Obviously, as the years go by, tastes have been formed and become harder to modify. Common sense indicates that whatever their financial situation, seniors will behave more rationally than their younger counterparts. But in no way does that stop them from consuming, in a more demanding and discerning way.
50+ consumers also buy for others
Without going into too much detail on the principles of intergenerational marketing, we should remember, all the same, that young seniors are at the heart of the family. More than 80% of them are parents and grandparents, and nearly 70% still have parents alive. Just when they are at last comfortably off, they find themselves once again in the position of having to provide the generations around them with concrete assistance (an obligation that is usually accepted with good grace). No wonder they are often known as the ‘sandwich generation’! Grandparents are particularly sensitive to the education and well-being of their grandchildren, spending up to one month’s income per year (more than 3 billion euros) on various presents, savings plans, school items, etc. For example, seniors account for more than 30% of the purchases of children’s toys in all sectors. Through all the help they give to both the younger and the older generations, young seniors are the most important group when it comes to consumption.