Do you know who makes up the largest percentage of your revenue or customer base? If that group went away or lost its buying power, what would happen to your business?
In America, more than 11,500 Baby Boomers turn 65 every day and will continue to do so from now through 2027. This is more than any time in history. And while 65 has been discussed as the ‘magic age’ of retirement (due mostly to Medicare coverage), some will wait until age 67 due to full benefits or retirement packages.
With nearly half of Baby Boomers already in retirement and the other half nearly there, if the majority of your revenue comes from those between the ages of 55 and 75, it’s time to expand your customer engagement.
Generations defined
It’s typical to see a generation span 15 to 20 years, informed by many connective factors such as historical events, pop culture and values. The years that define generations are also largely confirmed by researchers, though should be treated as guidelines over hard-and-fast rules.
When considering your prospects, one starting point in the research should be where they fall in these defined generations:
- Baby Boomers (born 1946-1964), between 60 and 78 years old
- Generation X (born 1965-1980), between 44 and 59 years old
- Generation Y, also known as Millennials (born 1981-1996), between 28 and 43 years old
- Generation Z (born 1997-2010), between 14 and 27 years old
- Alpha Generation (born 2011-present), 13 years old and younger
With nearly five generations in the workforce, there are significant differences in buying powers, communication preferences and channels used by each group to engage with brands. In this vein, strategies can’t be one-size-fits-all.
By first understanding who your customers are (or who they should be to grow or sustain your business) you can then develop marketing and communication strategies that resonate with those groups and support business success.
Buying power
While the ‘peak’ age of retirement has been discussed as between 65 and 67, the reality is, the majority of Baby Boomers who fall into this range do not have pensions. Why does this matter? Because if you are projecting business revenues for years to come based on Baby Boomers, the revenue you were once accustomed to may not be forthcoming as customers in this generation have finite income and stricter budgets. So, who has the disposable income you’re looking for?
Gen X and Millennials.
While the smallest generation in size, Gen X has the highest spending power with an average disposable annual income of $108,615. They have also been known to have the most debt. Millennials, the largest generation, net $89,641 in disposable income each year. And although the many of them are finishing high school or post-secondary education, Gen Z’s buying power should not be discounted. At nearly $50k of disposable income a year, this younger generation is mindful about what they spend money on but will spend it when they feel the time is right (or is proved trusted by their network).
If you’re not thinking outside your current audience segment, you may be leaving money on the table.
Pain points and communication
While you may have products or services that benefit multiple generations, the ways in which you make that known is critical for future sales and engagement. A Millennial may not understand that your services benefit her in a way that is different than, but equally as valuable to, your Baby Boomer or Gen X customers.
Tapping into the pain points, values and communication styles of each generation differentiates your brand. We need to meet our customers where they are – not where we are comfortable.
To start, consider the following traits across the top four generations. How might this impact or change your marketing strategies moving forward?
| Baby Boomers | Gen X | Gen Y | Gen Z | |
|---|---|---|---|---|
| What do they want? | Quality, loyalty | Ease of access, no gimmicks | Access to technology, convenience | Understanding of brand values |
| What do they value? | Family, strong work ethic | Dependability, safety, self-reliance | Opportunities for growth, diversity, improvement | LGBTQ+ rights, racial equality, sustainability |
| How do they communicate? | In-person, phone, text, email, Facebook | LinkedIn, Facebook, email, text | LinkedIn, Snapchat, Instagram, text | TikTok, SnapChat, YouTube |
| #1 way they discover new brands | In-store | Friends/family recommendations | Ads on YouTube | TikTok |
| What influences them to buy? | Brands that protect their personal data | Brands that protect their personal data | Brands that treat employees well | Brands that advocate for social equality |
| What are they most responsive to? | Good customer service, simple and easy-to-understand content | Honesty, clear paths to purchase, email marketing, good customer service | Cause marketing, social media, price-to-value ratio | Influencer marketing, short videos, mobile apps |
| Marketing strategies | Traditional advertising, loyalty programs, in-person interactions | Referrals/word-of-mouth, email, social media marketing, coupons or discounts | User-generated content, social media marketing, influencers | Influencers, social selling on TikTok, Instagram, app or mobile interactions, video |
Engage for the future
Gone are the days of a straight customer journey path. Entry points and purchase options are everywhere and each generation interacts with marketing differently. Dig in deep to your target audiences and the generations represented within your customer base, and those that will sustain your business for years to come. Develop a plan to meet your customers where they are and engage with them through content and communication channels that speak to their needs and wants, on their time. Get out of your comfort zone, learn new methods, or invest in team members or resources to make this happen. Diversify. It’s key to growth.
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Sources
CNBC | “As baby boomers hit ‘peak 65’, what the retirement age should be up for debate”
Statista | Mean disposable household income for United States in 2022, by generation
Forbes | “How each generation is building relationships with brands in 2024”
