The Business of Aging

Business of Aging Newsletter

We updated the look and design of our weekly Business of Aging newsletter. This is a free e-newsletter from SeniorCareMarketer.com that covers the latest news in what we call the "senior" marketplace.  it is best suited for companies who market products and services relating to the aging population.  You may subscribe to it here
or access archive stories here.

Enjoy.

Companies that Ignore the Over-50 Set Do So at their Peril!

A great cover story article in Baron's titled Boomer Consumer discusses how companies that continue to ignore the over-50 set do so at their peril, as "boomer consumers" eat up a larger slice of the nation's spending pie.

I've blogged about this topic extensively the last twelve months (including related topics):

- Event Review: 2009 Silicon Valley Boomer Venture Summit
 
- Staying Relevant With An Aging Population. An Elderhostel Case Study.

- Recession Turns a Graying Office Grayer

Key points from the Baron's article:

• Increasingly, the 77 million [aging boomers] are being ignored by advertisers and marketers.
• By 2015, when all the boomers will be 50-plus, folks aged 50 to 75 will account for 40% of adult consumers, up from 36.8% now. And they will boast the most spendable cash. Yet advertisers and marketers still seem to devote about 90% of their energy to wooing the 18-49 group, and 10% to those 50-plus.
• Does it make sense, after all, for NBC's suits to judge a new TV show like Jay Leno's mainly on its appeal to 18-to-49-year-olds, as some published reports say is the case? Leno's advertisers include companies such as BMW, many of whose buyers are 50 or older.
• But while the aging boomers certainly will be a bonanza to health-care outfits -- they already account for two-thirds of the spending on pharmaceuticals -- they will be anteing up a lot more for other things.
• The 50-plus set already accounts for 45% of all U.S. consumer spending and, Francese predicts, the figure could ultimately approach 50% by 2015.
• One myth is that older Americans are much more interested in shedding furniture and housewares than in buying them because most are empty-nesters. The reality: Older consumers account for more than 40% of the money spent on new household furnishings and equipment in the U.S.
• Bottom line: Older consumers will keep trudging off to Bed Bath & Beyond,  Target,  Wal-Mart Stores and Ikea for years.
• Boomerologist Martin partly blames ad agencies for what he views as 
  " He says a disproportionately large number of advertising copywriters, account managers and art directors are young. "Ask them to do an ad targeting the 50-plus demographic, and they default to a gray-haired senior limping down a beach trailed by an aging golden retriever," he adds.
• Take 1965 (see chart on this blog post) when the oldest boomers were turning 18, then jump to 1995, when the very oldest were turning 49. Over these three decades, the number of U.S. residents aged 18 to 49 soared from 78.6 million to 125.9 million. In the same period, the 50-to-75-year-old cohort, many of them a product of the birth dearth of the 1930s, rose far more slowly.

Great article Baron's.

Caring.com Buys Gilbert Guide. Smart Move (by both parties).

Caring.com announced today it has acquired Gilbert Guide, an online senior housing directory where caregivers can search for local providers. According to Venture beat, Caring.com currently has 700,000 monthly unique visitors. Now Caring.com will give its members access to Gilbert Guide’s housing guide.

Read the details here.

According to the news story, "the consolidation helps Caring.com compete against other elder care sites and companies such as A Place for Mom… and other ['searchable' senior care directories]….." 

The deal value wasn’t disclosed, but Caring.com exchanged equity to acquire Gilbert Guide -  an unbelievably  fabulous deal for Caring.com which has raised $6 million of VC money the last few years from DCM and Split Rock Partners. And the fact that the Gilbert Guide founders took equity for the sale of their business (if true) would indicate the desire for a liquidity event by Caring.com within the next 3-5 years (assuming this economy improves).

Andy Cohen, CEO of Caring.com is a very likable individual who seems to be in this business for all the right reasons. And based on my several meetings with him, I find Andy to be a very capable CEO. Reading about this acquisition reaffirms this belief.

This was a very, very good acquisition. Really.  

In June I wrote a blog titled "Searchable" Senior Care Directories. A Rapidly Growing Product Category       that discussed this growing space of Internet sites that allow caregivers to search for senior care services - from in-home care to assisted living/nursing homes to handyman services.

Quite a few of these companies have recently signed up for our SeniorCareMarketer.com service so we're getting to know the space quite well. And each week I think I'm introduced to a new one.  Many of them are listed in the SeniorCare Directory.

This space is HOT at the moment although many will not be around in a few years unless they can figure out how to make money with something other than "paid listings".

And this is why I believe Caring.com's acquisition of Gilbert Guide is so strategic.

Aside from (gosh I hate to use this phrase) the obvious synergies, this deal gives Caring.com a new revenue source (Gilbert Guide made money from paid listings, advertising, and licensing their database to a number of other directory sites - although a few deals could possibly be in jeopardy now that Caring.com is involved), additional advertising opportunities, greater access to the caregiving community (consumers and providers/vendors), the ability to better target ads (which command higher premiums), and the ability to deliver an overall better user experience. This deal also brings a whole host of growth and new product opportunities to Caring.com that they would otherwise not have had.

Kudos to Andy Cohen and Caring.com for a super buy. I wish them success.

Staying Relevent With An Aging Population. An Elderhostel Case Study.

The blog 50-Plus Marketing (from consulting firm 20plus30) had a great post this week titled Elderhostel makes a fascinating marketing case study.

It is about how Elderhostel, a travel and educational organization for older adults, is trying to reverse a decreasing enrollment trend that has led to the organization losing millions of dollars this past year.

One problem is the age of their average customer has risen to 73 from 68 over the last ten years. In other words, through attrition alone they are on a downward spiral as they are losing relevance to the market they desperately need to sell product to - older Americans. And ironically, this is the fastest growing, largest and wealthiest demographic in the US. 

Not good.

So what are they doing?

A lot but the three biggest changes are:

1. A name change. They are now Exploritas.
2. Their top line messaging is now "Educational Travel in the U.S.A." with a tagline of "Adventures in Lifelong Learning".
3. They removed their age restrictions. No longer do you have to be at least 60, now anyone 21 or older will be able to participate.

I hope it works but removing the age restriction is a huge gamble.

I am in my forties but I am quite familiar with Elderhostel because my mom was a loyal customer up until her death last year. She loved Elderhostel! It was basically an educational vacation where you went to nice destinations and learned something by taking courses. She had a blast and enjoyed meeting new people.

But I'm not sure she would have enjoyed hanging out with 20 somethings - or even forty somethings. And vice versa. So this is a risky marketing strategy. In fact, I was surprised to see on Exploritas web site that in the section "Browse by' my choices were:

• Location
• Interest
• Date
• Activity Level
• Catalog
• Map

But not "age".

Interesting.

Anyway, I do hope their marketing strategy works because they have a great product.

Just about every business in the US needs to pay attention to this "case study" because:

1. If you don't currently include older American's in your target market you need to. The aging population is the largest, wealthiest and fastest market segment in the US. You can't grow your business by ignoring this demographic.
2. If your target market is limited to "older American's (like  Elderhostel's was) you need to realize that today's older consumers make buying decisions far different than yesterdays older consumers. Continuing to market today like you did yesterday will lead you down the same path as what Elderhostel has experienced. I'm not saying you need to do a 180 degree turn like Elderhostel did and include all age groups in your target market but you do need to repackage your products, branding and marketing to remain relevant to the Boomer market.

And that is the marketing case study all businesses will face the next several decades.

Interesting stuff - and a challenge all marketer's should love and embrace.