The Business of Aging

The Business of Ageing (in New Zealand). Yes Folks, it's Global.

Dr. Keith Johnson, an Independent Economic Consultant in New Zealand was kind enough to send me a new report, "The Business of Ageing: Realising the economic potential of older people in New Zealand".

In 2011 the first of the baby boomers have reached the age of 65. Baby boomers expect their later years to be very different to their parents' generation.  More are working into their 60s, they enjoy better health, are better educated and have more money to spend.

The report focuses on two opportunities for New Zealand's future growth. These are to:

1.     increase the number of older people who choose to remain active in the workforce; and
2.     tap into the growing mature consumer market.

Key findings

The report presents the results of new research on the projected future economic contribution of the growing older population.  The report finds that:

•     more older people will participate in the workforce;
•     the economic value of older people's paid and unpaid work will increase;
•     older people's contribution to tax revenue will increase; and
•     the mature consumer market will become more important.

Where to next?

The report highlights the potential of older people and aims to encourage discussion amongst business groups, employers, NGOs, individuals and government agencies.  It offers an alternative perspective to the often negative portrayal of the effects of population ageing on the economy.

Download it today. It's good.

The Airlines and the Aging Population: We're Sorry Old Man, You Can't Use This Bathroom. Please Return to Steerage.

I was recently on a coast-to-coast @UnitedAirlines flight where an older man in his mid 80s who was sitting a few rows behind first class needed to use the bathroom but the drink cart prevented him from walking to the back of the airplane. So he walked into first class to use the bathroom. A flight attendant turned him away.

I was shocked.

When I googled the topic it didn't surprise me to find plenty of similar stories.     Here is one I read on an online travel site:

"Sunday night, on American Airlines, I watched a flight attendant rush to stop an elderly gentleman (who was sitting directly behind First Class), and send him allllllll the way to the back of the plane to stand behind 8 people to use THAT bathroom. Several people in First Class smiled or gave a thumbs up to the flight attendant."

I'm not sure what shocked me more. The story or the user comments such as "You get what you pay for. When someone pays 10-20x more for a ticket, they should have their own bathroom. Plus, once the old man gets to use it, others inevitably will try to bend the rules."

Wow.

That 85 year-old man likely fought wars to preserve the freedoms the young stewardess enjoys - the same stewardess who denied the man access to the bathroom. I felt so bad for the man. And I felt tremendous anger toward the airline.

But I realized that my anger toward the airline was an emotional response to a policy I did not agree with. Yet, the airlines have every right to have such a policy.

But it's a bad policy that reveals just how ill prepared most businesses are for the changing demographics of this country. 

Here are some facts about the aging population (in the USA):

- The older population--persons 65 years or older--numbered 39.6 million in 2009 (the latest year for which data is available). This is about 13% of the U.S. population - roughly one in every eight Americans.

- By 2030, the older population--persons 65 years or older--will number about 72.1 million older persons (more than twice their number in 2000). This will be about 19% of the U.S. population.

Lets assume an airplane has 200 passengers on board. If the demographics of the passengers matches the USA then by 2030 we can expect that nearly 40 "coach" passengers will be over the age of 65. And many will have some sort of physical limitations. And some will have some sort of bladder control issues (10% of people over 65 do). So clearly the airlines will have to adapt to the needs of what is going to be an important customer base - older passengers.    

I'm not alone in recognizing this marketing fact. Here is what Stephen Shaw had to say about this topic in his book Airline Marketing and Management: 

"Clearly, the product that airlines offer will have to evolve, with more provision being made for disabled passengers and those needing help at airports. In terms of subtler changes, the travel industry may have to adjust its promotional policies. In advertising to promote leisure travel, the industry still focusses on images of fun-loving younger people……."

Even airports need to adapt - from changing the physical layout of airports (you can't expect a 65+ year old to run to a gate a mile away on a short layover) to providing more accommodating procedures and seating at security screenings (e.g., more benches where people can sit down to remove and put on their shoes).

And it is not just the travel industry.

It is  very clear to me is how unprepared most businesses are - especially services businesses - for the growth of the aging population.

Every industry needs to adapt to the needs of older customers - from product design to customer service (patience). Not doing so will alienate this important (and large) customer group and result in significant lost revenue.

On the flip side, businesses that start NOW to accommodate this demographic group will reap the rewards and gain a competitive advantage. And those that delay will find themselves falling further and further behind.

Why Marketers Can’t Afford to Ignore Baby Boomers

When it comes to marketing, the focus always seems to be on youth. According to Nielson, that's a mistake.

Born between the years 1946-1964, the oldest of the Boomers are beginning to retire. But today’s middle aged and older consumers are different than their predecessors.

Boomers spend 38.5% of CPG dollars. Yet, according to Nielson, less than 5% of advertising dollars are currently targeted towards adults 35-64 years old (which includes the latter half of Generation X in addition to Boomers).

With most marketers generally targeting 18-49 year olds, more than half of the affluent Boomer demographic is ignored entirely.

Nielsen facts about Boomers:

- Dominate 1,023 out of 1,083 consumer packaged goods categories
- Watch the most video: 9:34 hours per day
- Comprise 1/3 of all TV viewers, online users, social media users and Twitter users
- Time shift TV more than 18-24s (2:32 vs. 1:32)
- Are significantly more likely to own a DVD player
-  More likely to have 
broadband Internet access at home

And if you think that the web sites Boomers visit are entirely different than those visited by adults age 18-34, you’d be mistaken: 8 of the top 10 web sites are the same (see chart on this post).

Interesting.

Print Media Dying a Slow Death. Get Social and Get Online.

Erica Morris from PR Week wrote an article about a 2010 Media Survey they worked with CA Walker to conduct. Data is based on completed surveys from 268 media professionals and 285 PR professionals during January 11-19. Results were tested at a confidence level of 90%.

The findings were very interesting. A few findings stood out for me:

1. Growing importance (and acceptance) of pitching to journalists through social networking sites like Twitter and Facebook.
2. Half of surveyed journalists say that only 0-25% of pitches they receive are related to what they cover.
3. Nearly 40% of journalists say pitches incorporating multimedia and high res photos help them better understand a story.
4. 84% of journalists consider email the best way to receive pitches.
5. Nearly 60% of journalists expect a further decline in print circulation and growing importance on the Web and other online channels. A blog post I made yesterday on HRmarketer discussed how the S.F. Chronicle circulation dropped 22 percent in last year! While there are exceptions we are seeing a definite trend of dropping circulations amongst print media.  

My reaction to these points:

• Senior Care vendors must do a better job at connecting, following and using social media in their media relations. Our SeniorCareMarketer.com customers have plenty of tools available to facilitate this including our database of social networking account information for senior care and boomer media and our real-time feeds of their media tweets. But they are not being used to there maximum value by most vendors.
• Knowing journalists prefer email is a plus for companies using SeniorCareMarketer.com because they can send media releases to senior care and boomer journalists. But many vendors still do not engage in ongoing media relations. This is a missed opportunity. 
• Finally, the fact that 50% of journalists say that only 0-25% of pitches they receive are related to what they cover is shocking to me. Elrond Lawrence, one of our media relations experts at our sister product HRmarketer, wrote several articles on effective media relations - read them here. And SeniorCareMarketer.com customers should review the notes we compile for journalists before sending them news releases (e.g., what they cover, what they want, etc.).

The bottom line is that print media is dying a slow death as online visibility grows in importance. More and more data is confirming this fact. As a result, companies targeting seniors and boomers  must aggressively invest in social media, SEO, SEM and other tactics that result in online visibility, web site traffic and sales leads.

Here are some free resources from SeniorCareMarketer that discuss many of the above points.

Day Three - Aging in America 2010 & Boomer Summit

Today was our final day of exhibiting. Tomorrow we spend the day at the Boomer Summit.  As a marketing firm in this marketplace, three powerful themes resonated from this year's ASA event. I'll focus the two of those themes the next two blog posts. These themes include:

1. As a company selling to seniors you will fail if you rely only on traditional marketing.
2. The concept of "retirement" is going through a transformation.

Many sessions, workshops and hallway discussions were about the issues facing society as populations age. This is the third theme I took away from this event. While I will not focus on this theme in these blog posts, all of us in this space - vendors included - must never lose sight that this is the core of what these events are really all about.

Let's first look at theme #1 - As a company selling to seniors you will fail if you rely only on traditional marketing. Three points I want to make here. First, you need to be allocating a significant part of your budget to non-traditional internet marketing - SEO, SEM, PPC, etc.  A good model to follow is from our sister company HRmarketer - The Lead Generation model.

We were talking to one vendor who said his company didn't really need to worry about online marketing because their customers - the aging demographic - would rather hold a physical brochure in their hands and would be unlikely to go online to get information.

OK.

These were some statistics released last year by Pew Internet & American Life Project - they will only increase as Boomer's age.

•  74 percent use the Internet
•  62 percent have broadband at home
•  72 percent use a cell phone
•  43 percent connect to the Internet wirelessly.
•  91 percent of boomers use search engines
•  78 percent search in health care
•  30 percent use online ratings
•  38 percent share video feeds
•  26 percent read blogs
•  17 percent share creations
•  16 percent have a social network profile
•  7 percent blog.

Maybe this company's CURRENT target market isn't online (even that is debatable) but they will be soon. And if you delay building your online visibility it will be too late.  Just ask Porters of Racine.

Secondly, the messaging you used in your marketing last decade will not work with aging Boomers. Old people playing checkers and smiling will not sell your assisted living community. Many thought leaders have written about this topic including most notably David Wolfe in his book Ageless Marketing: Strategies for Reaching the Hearts and Minds of the New Customer Majority.

Finally, your marketing must account for the fact that most of the products and services relating to the care of an aging individual will not be purchased by the individual. As a result, you must also build brand awareness with numerous purchase "influencers" including the children of aging parents, doctors, nurses, pharmacists, care managers, in-home care companies, etc., etc. etc. This what our SeniorCareMarketer product is all about.  Even employers and human resource departments  may be involved.  

My next blog post will focus on the second theme I took away from the ASA event - The concept of "retirement" is going through a transformation.

Some Thoughts on Boomers, their "Retirement" and the Companies That Market to Them.

I came across two interesting articles I wanted to share - and why the information is important to companies selling products and services relating to the aging population.

"The Census Bureau forecasts that the 65-and-over population will rise from 38.7 million in 2008 to 88.5 million by 2050 and that the 85-and-over slice will swell from 5.4 million to 19 million. The actual size of this "age wave," though, could reach tsunami proportions, if a December study from the healthcare policy journal Milbank Quarterly turns out to be prescient. It predicts an average American life span of 86 years for a man and 93 years for a woman by 2050—more than a decade longer than now—and a grand total of up to 108 million seniors."- Excerpt from January 25, 2010 U.S. News and World Report article.

The first, Why Baby Boomers Should Rethink Retirement, from U.S. News and World Report discusses how seniors today are living more independently, dying less from lengthy and debilitating bouts of cancer, and are happier than they were in the past (according to a 2008 University of Chicago study). The article goes into pretty good detail about the impacts of an aging - and active - population on the individual and society as well as the challenges it brings to public policy.

The second article, Economy Forces Changes in Thinking about Retirement, discusses the economy's impact on senior housing including smaller homes, increased emphasis on bike paths and walking trails (and decreased emphasis on greens and fairways), a shift away from traditional "warm weather" retirement destinations, and the types of design features the 55+ population wants in their homes.

Some lessons from these articles:

When it comes to marketing to an older demographic group, strategies that may have worked in the past will not work with aging boomers.  This is new territory for a lot of companies because historically people over the age of 50 have not been highly targeted by marketers because their spending power was minimal.  But as a group aging boomers will have double the spending power of today's 60-70 years olds, will not consider themselves "old", are affluent, and will live independent and active lifestyles well into their 70s and 80s and beyond if they are healthy.

All of these changes will have a dramatic impact on how company's market their products and services - all companies, as well as how employers recruit and retain older workers.

Aging Population Faces Caregiver Shortage.

Lisa Gibbs from MONEY Magazine wrote a great blog post titled Aging boomers face caregiver shortage.

She begins her blog post with a mention of the Community Living Assistance Services and Supports (CLASS) Act, a provision in the health care debates to create a national long-term care insurance program that would allow people to pay an average $65 a month and, after five years, be eligible for between $50 to $100 a day in benefits.

In Lisa's words:

"While $100 is better than nothing, I can tell you from experience that it doesn’t cover very much. It would pay for about six hours of daily care from the home aides I hired recently to help my mother recover from surgery. It certainly wouldn't cover assisted living or nursing homes, which run into the tens of thousands of dollars per year.

Whether through private long-term care insurance or a public plan, it’s clear this country needs to do a better job thinking about how we’re going to care for ourselves (and our parents) as we get older and frailer. Few of us have saved enough money or bought insurance to cover whatever care we need in our later years. But there's another aspect of the long-term care problem that people have overlooked: A looming "caregiver crunch," in the words of Ken Dychtwald, a gerontologist and president of the consultancy Age Wave.".

Lisa nails it. She is absolutely right.

Census Bureau Provides First Profile of Baby Boomers in 13 Years

The U.S. Census Bureau has releases an outstanding PowerPoint presentation that provides a look at a variety of demographic and socioeconomic characteristics of the baby boom generation (the population born between 1946 and 1964 ), such as geographic distribution, marital status, educational attainment and income, and compares them with adults in younger and older age groups.

To access the PowerPoint presentation visit this page (http://www.census.gov/population/www/socdemo/age/general-age.html#bb) and near the top of the page under the Baby Boomer header you'll see a line "Selected Characteristics of Baby Boomers 42 to 60 Years Old in 2006 [PPT] | [PDF 2.3M]". Just select PPT.

The USA Today does a nice job summarizing the findings but I highly recommend you download the PPT. 

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.

Boomers Putting Off Retirement: More Research.

We've blogged quite a bit about stories and research showing a significant number of aging Boomers are expected to delay retirement.

Today I read another report confirming this fact.

Researchers at the University of Michigan collected data from 4,412 older Americans in April and May of 2009. Those over the age of 51 were quizzed about career plans.

"We asked the same older workers what the chances were that they would still be working full time after age 65, and they went up from 47 percent to 57 percent between 2008 and 2009---a very rapid change after a long period of stability," said Michigan economist David Weir, director of the Health and Retirement Study. The chances of working past 62 went up from 60 percent to 65 percent.”

The focus of the research was on how older American's are weathering the financial crisis of the last year but regardless of their reasons, we are seeing more evidence of Boomers planning to remain in the workforce.

Go here to read about the research report, "Older Americans: How they are faring in the recession".