All Boomers Are Not Alike

Feb 01, 2003 10:30 PM  By

Americans 40 years old and up account for 43% of the U.S. population. More important to you as marketers, they account for 73% of all direct marketing purchases. Yet the catalog industry could do more not only to recognize this market’s existence but also to target it more efficiently.

Some catalogers say that they overlook older consumers because younger buyers represent their future. While that may be true, it is also true that during the next decade the percentage of Americans aged 15-29 will remain flat at 20%. But the 40-plus market will make up 47% of the U.S. population within 10 years. Clearly, ignoring this demographic could cost you revenue and market share.

The key is to attract and reinforce potential and existing relationships with customers 40 and older while at the same time appealing to younger buyers. Psychographics can enable you to bridge the interests of the young and the mature. Instead of dividing markets into silos by age or some other demographic, you can target your catalog to people who, regardless of age, share similar attitudes and motivations toward specific products.

Looking beyond age

Through seven major studies since 1989, our consulting company, Strategic Directions Group, has surveyed 20,000 people age 40 and older. We’ve collected 50 million pieces of data on demographics, behaviors, and media and Internet usage.

Most studies of baby boomers and their elders focused on demographics. But such research doesn’t explain what motivates these customers to purchase — or not purchase. So instead of operating from insights into motivations and attitudes, you generally have to experiment, based on little more than hunches, to improve your response rates. And all too often these response rates remain in the very low single digits.

Many marketers consider themselves experts on the baby boomer and mature markets, but what they actually know about boomers and their elders is limited to generalizations. Year after year the same supposed “facts” are bandied about.

For instance, consumers 65 and older are generally considered too tight-fisted to spend money, assuming they even have any. Yet American 65-74 years old have a higher level of discretionary income per household member ($9,612) than those 25-34 years old ($8,859). Women 65 and older spent $14.7 billion on apparel in 1999, according to research firm The NPD Group. That’s almost as much as 25- to 34-year-old female consumers spent.

Maybe you already know all this, and instead of relying on demographic information, you’re using behavioral and transactional data to help you target buyers. But behaviors are also of limited use. Like demographic data, behavioral information doesn’t explain motivations.

What’s more, aging baby boomers are a new market. For the first time, they’re dealing with the problems and satisfactions that come with aging. How their aging will motivate them to buy specific types of products from a catalog is an unknown.

The single-digit response rates that are the norm among catalogers indicate that the vast majority of catalog recipients are not receptive to them. So instead of relying solely on demographics and behaviors, we propose that the mature catalog buyer be studied in terms of a psychographic segmentation — an approach that identifies receptive prospects. When layered with demographics and behaviors, a psychographic segmentation strategy can provide you with a 360-degree view of your best-qualified prospects.

Let’s take a look at what, demographically speaking, would be a highly desirable audience to target: people 40 and older with pretax household income of $75,000 and above, or assets of at least $200,000 if married; income of at least $50,000 or assets of at least $100,000 if single. Of the U.S. population 40 and older, 28% meet these criteria.

Now, based on our research of the past years, let’s categorize these consumers into four segments: the Upbeat Enjoyers, the Insecure, the Threatened Actives, and the Financial Positives.

The Upbeat Enjoyers, who make up 34% of the demographic group, believe they are successful and are optimistic about their future. They would like to spend their retirement expanding their intellectual horizons, though they will work if they find it convenient or interesting to do so. Upbeat Enjoyers show little concern about their future financial security.

The next largest group, the Financial Positives, account for 29% of the 40-and-up population. They are realists and long-term planners, and they have definitely planned not to work in retirement. Very financially secure, Financial Positives are also relentless seekers of value. Those in this segment are savvy buyers, whether they are purchasing a couch or a cruise. Although Financial Positives have a positive view of their lives, they are not satisfied with their current appearance or their memories. Of all the Lifestyle segments, plastic surgery would be of greatest interest to Financial Positives.

Threatened Actives, who make up 23% of the demographic group, want to preserve their independence by working in retirement, remaining in their own homes, and continuing to drive their cars. Nothing should impinge on these necessities. Those in this segment do not view retirement as a time for growth and the cultivation of new interests. Threatened Actives do have a generally positive outlook on life, however, and accept themselves as they are. While concerned about their safety, they feel somewhat financially secure. They would like to pass on some of their assets to their children.

The smallest segment, the Insecure, account for the remaining 14% of the demographic. They are deeply troubled by their lack of financial resources, and they view their lives as bleak and offering little chance of improvement. Looking back on a difficult past, they see themselves facing uncertain, lonely futures. Retirement for the Insecure may include working because of financial need but few other plans and goals. Those in this segment are also concerned with the possibility of being a crime victim. Least pleased about the effects of age on their appearance and their memories, the Insecure are open to products that will make them younger physically and mentally.

Which segment or segments should you target to achieve the greatest return on investment? That depends on what you’re selling and at what price. Affluent Threatened Actives, for instance, are poor prospects for fine jewelry purchases, and when receiving health-related direct mail, 46% of them throw it away unopened. But Threatened Actives are excellent targets for tools. In terms of behaviors, nearly one in three Threatened Actives enjoys working on do-it-yourself projects.

The attitudes that mark Upbeat Enjoyers include a deep interest in expanding their intellectual horizons, and their behaviors support these attitudes. Almost half of the affluent Upbeat Enjoyers describe themselves as avid book readers, with virtually one in four spending at least 11 hours a week reading books. More than one-third (36%) visit a museum at least once every three months, so they would clearly be great prospects for catalogs from, say, the Metropolitan Museum of Art.

Attitudinally, Financial Positives feel they’ve grown less attractive as they’ve aged. So it’s no surprise that they are heavy consumers of skin treatment products, from eye creams to sunscreens. Financial Positives are clearly interested in solutions to the problem of aging; in fact, 69% of them open and read health-related direct mail.

Separating the segments

Knowing which psychographic segments are most likely to respond to your catalog is handy information to have. But if you don’t know how to find the prospects that fall within those segments, such knowledge is academic rather than practical. In other words, how can you know whether Jane Doe is an Upbeat Enjoyer or a Threatened Active?

Focus groups can provide some understanding of the motivations of customers and prospects. But to build database models using psychographic insights, you need quantifiable data. And while collecting attitudinal data on all of your customers is impossible, you can merge third-party demographic and behavioral data into your database and correlate psychographic segments with demographic or behavioral patterns.

Having recognized the immense richness of the U.S. mature market, smart catalog marketers should take the next step and use more-sophisticated tools to reach their most important catalog buyers. Using a robust psychographic segmentation strategy will enable you to thoroughly understand the motivations of your target segments and reach them more effectively, regardless of age. By layering demographics and behaviors onto psychographic segmentation, you will be able to create integrated efforts focusing scarce resources for the highest ROI.


Carol M. Morgan and Doran J. Levy, Ph.D., are principals in Strategic Directions Group, a St. Paul, MN-based consulting company specializing in psychographic segmentation, and the authors of Marketing to the Mindset of Boomers and Their Elders (Attitudebase).