Archive for the ‘Issue 18’ Category

 

Pushing Past the Perimeters of Perceptions and Misconceptions

Tuesday, May 15th, 2012

By now, most savvy businesses realize that there is an untapped potential customer base in the rapidly expanding boomer and senior population.  The challenge is discovering and implementing marketing strategies to attract the attention, capture the loyalty and retain a relationship with this huge marketing segment.

An additional challenge is erasing some of the perceptions and misconceptions that are commonly held about seniors and Boomers in general.  We are no longer living in an era where target markets can be categorized by age.  The senior and boomer markets have broadened into a vast arena of client possibilities and soaring profitability.

Some perceptions and misconceptions to re-think:

It’s not worth it to pursue these “old” folks –

The first obstacle that needs to be addressed when marketing to seniors is to banish the mindset that goes along with the titles “senior citizen” or “baby boomers.”  Gone are the days when age was defined by hemlines and wrinkles.  In this area of successful aging, you will find grandmothers running their own successful internet operations and grandfather entrepreneurs.  These “oldies” are 76 million strong and by the year 2030 one in five Americans will be 65 or older.  Over the next 20 years they will spend $20 trillion on consumer goods.

They aren’t big “spenders” –

Boomers aged 56 -66 spend an average of $367 per month online according to data from “The State of Consumers and Technology: Benchmark 2011” which is more than double the amount spent by adults age 18-22 which is an average of $138.  Boomer spending has increased 45% year over year according to a 2010 Gallup poll.  They may be more conservative in their tastes but they spend liberally on, not only themselves, but also their extended family who may be struggling with unemployment while raising their own families.  Seniors are now enjoying the fruits of their labors and are seeking comfort and luxury products, which translates into vacations, cruises, home entertainment products, apparel, jewelry and gifts.

They don’t understand the new technology –

This particular generation buys more Apple products (41%) than any other age group.  They not only can afford them, they can understand them.  They have Facebook accounts, shop online, have smart phones, blog, and own and run successful internet operations.  They are gadget-savvy and are enjoying a technologically advanced lifestyle.  They actively track world and local events via the internet and stay connected both socially and politically through this same venue.  The talk at women’s garden clubs today may be more about Skyping, world and national events and internet providers than planting and pruning.

They don’t have “brand loyalty” –

Seniors and Boomers have been through fads and trends and aren’t easily lured from brand-to-brand.  They have the luxury of time to research purchases and as a result, stick with their brand decisions longer.  They are not only more brand loyal, they are less price sensitive than younger shoppers, but are also more demanding on quality and services.  They evaluate products more on quality, packaging and ease of use.  The buy-one-get-one-free doesn’t work with this demographic because they use smaller amounts of products than previously or they are limited in storage space because of downsizing.

Seniors aren’t active –

Seniors and Boomers today are more active than the previous generations.  They are foregoing retirement and working longer, not only for the income, but also for the activity it affords.  Even upon retirement, seniors don’t favor inactivity.  They flock to the gyms, not only the physical ones, but also the new mental gyms that are coming into style.  They travel around the world and around the country pursuing new adventures.  They have redefined the statement that accompanies retirement and that is, “I am so busy now, that I don’t know where I found the time to work.”  Grandma has taken a giant leap out of her rocking chair and is bench pressing 75 pounds while listening to her iPod and Grandpa has taken up rock climbing.

MARKET TO AND BENEFIT FROM THIS GENERATION BY:

  • Allocating more advertising and promotion dollars to capture this market.  Only 5% of advertising budgets have been geared toward older consumers while 80% is spent trying to reach the 18-34 year old market.
  • Having multi-generational advertising literature and campaigns.  Different style of music, models and messages can reach more than one generation of audiences.
  • Focus on quality and service – two of the most important deciding factors in seniors’ buying choices.
  • Think “active” instead of “old” when viewing the senior consumers.  Changing your mindset can change the way you market.
  • Diversify your product or service to accommodate this generation.  Have a “senior” size product to avoid waste of the larger sizes.

Resource Extensions: Gerontological Society of America, e-newsletter Vol. 2 Number 1 2012; Five Common Misconceptions About Marketing to Seniors, Healthcare Marketing 13 Mar. 2012; Datalist marketing.com

Customer Retention: Your Most Valuable Asset

Tuesday, May 15th, 2012

Profits are measured through customer engagement and retention.  A 5% increase in customer retention can lead to a 25-95% increase in profits.  It is also more cost effective to retain existing customers than to acquire new ones, but few companies have programs in place that focus on this.

Losing customers is costly, not only in profits generated by dissatisfied consumers, but also in the subsequent loss due to negative feedback that discourages potential referrals and new customers.

Customer loyalty is vital to a business’s success.  Creating and maintaining that loyalty is the ultimate goal of any business entity, whether in a brick and mortar or online business relationship.

Loyalty is described and defined as:

  • Customer repeat buying behavior
  • Customer referrals to friends and colleagues
  • Customer’s emotional commitment to the relationship
  • High customer satisfaction
  • Customer trust based on high value
  • Customer’s spending more over time

Businesses need to analyze and understand why customers stay and also why they leave.  Researching, studying results, communicating the results to all levels of management and employees,  and creating and implementing a loyalty and retention plan should be an integral part of any business strategy.

Because 92% of U.S. consumers form their opinion of a company based on their first experiences with the company’s people, products and services, the first impression should be memorable and pleasurable.  Remember, you only have one chance to make that “first” impression.

Loyal customers are also driven by attitudes towards quality and customer focus.   Other areas include convenience and ease in the purchase process, brand quality, product support and company credibility.  Price will play a determining factor in how a consumer views the value of what they purchase, but price alone doesn’t transfer significantly to consumer loyalty.

Why customers leave a particular business and how management perceives this defection are sometimes two different things.  Management will most often blame the pricing of the product, but 74% of consumers cite customer service as the major determining factor in their decision to shop elsewhere.

Communicating with customers, either directly by mail or in-store surveys; or indirectly, through feedback from floor personnel or customer service representatives, is a good way to assess and reinforce positive interactions and also to identify and rectify potentially detrimental customer complaints and dissatisfaction.  While customers may voice complaints about products or services to customer service personnel, they may not approach management and instead just go elsewhere.

Recognizing and rewarding valuable customers is also a good marketing strategy.  Mailing or offering coupons or gifts with purchase will translate into repeat visits with intents to purchase.

Getting customers back after losing them will require research into just what pushed them away and how to realistically fix the problem and invite them to return.  By connecting and communicating with these lost customers you are validating their concern and focusing on their negative experiences, which will put your business in a positive light and allow the customer to return to their previous customer status without embarrassment.

Options and Opportunities for Retaining Valuable Customers:

  • Make sure members of your customer service staff are properly trained in the skills they need to recognize potential customer complaints and that they are empowered to make immediate decisions as to price or product adjustment without the added expense of time to get further approval.
  • Organize and utilize customer outreach programs that include a variety of direct mail, product demonstrations, technical support services and online connections.
  • Respond to and resolve customer complaints quickly and effectively but fairly.
  • Anticipate customers’ wants and needs.  The simple act of providing a comfortable seating area within women’s departments for husbands who accompany them can quickly turn into sales and repeat visits.
  • Create additional value or service attached to individual purchases by offering a coupon with a current purchase that will be good at a future date or including a reciprocal coupon from a non-competing business who will offer a similar reward at their business.
  • Establish a planned and systematic contact schedule for both active and inactive customers.

Resource Extensions:  The Integrity Group White Paper: Customer Retention September 2008; The Loyalty Connection: Secrets to Customer Retention and Increased Profits, RightNow Technologies, March 2005; Gartner 2004; Harvard Business Online.