When attendees at my workshops first see the eye-opening numbers you will shortly see, this question often arises: Why have the brightest minds in business ignored the New Customer Majority? Call it the cognitive equivalent of Newton’s law of inertia, replacing the words at rest with the words in place: a belief in place tends to stay in place. The human brain evolved to resist change in the interest of keeping things predictable and stable for its owner. Just as Newton taught that objects tend to keep doing what they are doing, people tend to keep believing what they believe, and do so with a natural sense of defensiveness. The first response we all have to an idea that contradicts what we believe is to deny that idea a landing site in our minds.
The idea that an aging customer universe changes the rules of marketing can be unsettling. It means giving up beliefs that undergirded successful marketing in a time when younger people defined the rules of marketplace engagement. However, it is now time that companies and their researchers and marketers break away from the inertia against changing their beliefs and form new mind-sets that are more appropriate in a marketplace dominated by people in the second half of life—second-half markets.
Because people in second-half markets see and hear product messages differently than people in first-half markets, companies and their marketers need to learn about these differences in order to put marketing more in sync with customers 40 and older.
Significant differences exist in the deeper, subtler core needs and desires between people in first-half and second-half markets. A 45-year-old is likely to have very different reasons for buying the same product a 25-year-old buys. Both may give a researcher the same reason for buying a product, but deeper, subtler core needs of which neither has awareness may drive the final decision.
University of Virginia psychologist Timothy Wilson addresses in his article Strangers to Ourselves our inborn resistance to change—the cognitive inertia that often keeps us from changing beliefs when objective reason says we should. Wilson examines what goes on outside of consciousness in our brains to shape our perceptions and beliefs: "When an event is not easily explained by what we know, we alter what we know to accommodate the new event."
I first read those words around the time I listened to Bob Garfield’s interview with the media buying company CEO who argued that youth markets are more attractive because of their influence on markets in general. Sounding something like a teen, he told Garfield, "Let’s talk about, you know, the rap culture’s influence on, on really suburban youth, or let’s talk about Nike and its belief that the basketball court on West 4th Street is the epicenter of the Nike brand. I, I think it’s a pretty well-accepted proposition that you have, you know, circles of influence that emanate from a central point."
Timothy Wilson might conclude that the CEO was altering what he knows to fit a new event that he doesn’t understand. The CEO knows from experience that market segments with the most consumers spending the most money are where marketing dollars should be concentrated. But according to that old knowledge, his company should now be making bigger media buys in second-half markets. These markets are 45 percent larger than young adult markets and spend considerably more money. Yet, rather than adapt to that new reality, the CEO alters what he knows from past experience to accommodate the new event.
There’s a saying that people won’t change until the pain of staying the same becomes greater than the pain of changing. That could help explain the resistance of marketers to shift attention and marketing dollars toward the New Customer Majority.
The pain of staying the same in marketing must be getting close to exceeding marketers’ pain tolerance. The advertising industry has been in its biggest slump since the Great Depression. Ad agency revenues fell in both 2001 and 2002, the first back-to-back negative growth years since the 1930s. Interestingly, consumer sales remained remarkably strong during the same period. In the past, strong consumer spending meant the advertising business was doing well, but not recently.
The CEO of the media buying company was indeed correct in saying that marketplace behavior is subject to "circles of influence that emanate from a central point." However, that central point is now smack dab in the middle of the New Customer Majority. "Now hear this," I wanted to shout back into the radio, "The majority rules—in the marketplace, as well as in politics." Adults under 40 once were the majority, and they ruled the marketplace. Adults 40 and older are now the majority, and they now rule the marketplace—in numbers, in spending, and in determining the rules for successful marketplace engagement.
Today’s Leading Customer Behavior Attributes Were Predictable Decades Ago
The Yankelovich Monitor, a consumer trends information service, provides subscribers intelligence on what customers are thinking and doing. It recently described the leading views, values, needs, and behavior in the marketplace in ways that would not have surprised a prominent American psychologist who dedicated his professional life to studying human development, especially in the second half of life. But for his death in 1971, Abraham Maslow might review a 2002 Yankelovich Monitor report and say, "Of course." In fact, he could have predicted more than two decades ago much of what the Yankelovich Monitor and other consumer behavior tracking reports are saying today about the leading values, views, needs, and behavior in the marketplace.
How is that possible? And why is that significant today?
First, as to its significance: Obviously, being able to predict changes in marketplace behavior years in advance would have great value to companies. Fourteen years ago, when I was immersed in writing SAM 1990, it was being widely predicted that boomers would enter old age, still self-centered, still chasing hedonistic pleasure, still playing more the grasshopper than the ant, and running out of money. SAM 1990 drew a different picture. It described how aging boomers (not all, but many) would increasingly turn their attention to altruistic pursuits and begin pursuing simpler pleasures, with many going into old age in financially better shape than their parents. This would happen because a substantial number of boomers, upon reaching midlife, would change their worldviews and begin moving—in Abraham Maslow’s words—"toward the higher levels of humanness," toward the maturational state of self-actualization.
About 3.7 million boomers turned 40 in 1986, the first to do so. Throughout the 1990s, around 4 million more turned 40 each year to begin their ascent to higher levels of humanness that would make them less self-centered and more concerned with matters beyond their own skins. With more than 60 million boomers entering midlife between 1986 and 2000, it is more than coincidence that philanthropy and volunteerism has experienced unprecedented gains.
The American Association for Fundraising Counsel <www.aafrc.com> reports that annual growth in philanthropy exceeded 10 percent during much of the 1990s, far faster than growth in incomes and family wealth. According to Larry Wheeler, director of the North Carolina Museum of Art, "In several recent years, the growth in philanthropy has been recorded at above 20 percent."
Many companies could have saved great sums over the past few years had consumer researchers been savvier about characteristic behavioral changes in midlife. Procter & Gamble’s Olestra fiasco is just one high-profile example that could have been avoided.
Companies have widely misread aging boomers. Bent on catching the "age wave" of these boomers, they had researchers survey and interview boomers about their lifestyle patterns and needs five to ten years into the future, as leading-edge boomers were entering their 40s. A few years later, a car company wanting to learn what boomers would want as they entered retirement called me about participating in such a study. At the time, the oldest boomers were 53. I was unsuccessful in persuading the person who called me that it would be futile to ask preretirement boomers about their retirement lifestyles because many would have different attitudes influencing vehicle purchase decisions after retiring. I know this from 20 years of experience working in midlife and older markets. Still, that experience counted for nothing to the researcher who desperately needed something to statistically analyze because his company insisted on having numbers on which to base its decisions.
"Big Breasts and a Soft Fatty Little Tummy"
Movie actress Jamie Lee Curtis, a 43-year-old boomer, recently demonstrated quite dramatically how lifestyle attitudes often dramatically change in midlife. In doing so, she became something of a pinup girl for many aging boomers who wistfully wish that they might once again have the body of a svelte and fit 21-year-old, but not so seriously that it has much influence on their lifestyles.
Curtis stunned readers of the September 2002 issue of More by appearing in a full-page photo, sporting a two-piece black sweat outfit that revealed recently acquired love handles connected to a thickening waist. Jamie confessed, "I don’t have great thighs. I have very big breasts and a soft fatty little tummy. Glam Jamie, the perfect Jamie . . . it’s such a fraud." She added with great dignity and self-respect, "The more I like me, the less I want to be other people."
Jamie Lee, who talked about her earlier obsession with physical appearance, had undergone a change of attitude in ways quite normal for people in midlife. Yet, her self-appraisal is at odds with what many have predicted about aging boomers, tempting companies into making costly ill-founded decisions. The makers of fat-free ice cream lost a bundle betting on boomers retaining their narcissistic values in midlife and beyond. More on that later.
At age 23, Jamie Lee Curtis could not have imagined showing off her love handles in a popular magazine. But a 43-year-old Jamie is not just a 20-years-older version of her 23-year-old self. She is in many ways a different person. However, the person she is today evolved along a somewhat predictable path—the seminal idea that is the foundation of this article.
About 4.4 million people in the United States share Jamie’s birth year. Many have no doubt come to terms with themselves in much the way that Jamie has. Ahead of Jamie are 50 million other boomers who have already passed 43, many of whom are quite far ahead on the road to the higher levels of humanness that lead to dramatic changes in buying behavior.
The general predictability of personal development in midlife would have enabled Maslow 25 years ago to predict that by 2002, "The characteristic behavior of developmentally advanced adults that I wrote about in Toward a Psychology of Being will have a strong presence in marketplace behavior." The certainty of that prediction was secured by the fact that a downward trend in fertility rates presaged middle-age dominance of the marketplace by the 1990s. Fewer births in the late 1960s and early 1970s and, finally, the dropping of the fertility rate below population replacement levels meant that the percentage of older people would steadily rise until people 40 and older would become the New Customer Majority.
Maslow would have reminded a doubting Thomas that personal development does not end with adulthood. Rather, it continues for all of life in somewhat predictable ways. He would surmise that a marketplace dominated by people in the second half of their lives would inevitably make the values, views, needs, and behavior characteristic of that time of life the leading behavioral attributes of such a marketplace. Maslow might then have noted that marketers would have to change much of their thinking and the way they do things to be successful in a marketplace so configured.
Yankelovich CEO J. Walker Smith said in a 2001 speech that Monitor research reported that consumers were acting more paradoxical, wanting less "stuff," reprioritizing their lives, showing greater self-reliance, and seeking more balance in their lives. Maslow would not have been surprised to find that people in the second half of life were now the adult majority. For instance, he said in Toward a Psychology of Being (1968) that at higher stages of maturation people reflect "polarities and oppositions" in their behavior ("paradoxical behavior"); strive to simplify their lives (less "stuff"); experience changes in values ("reprioritizing"); become more autonomous ("self-reliant"), and avoid extremes ("more balance").
So, in the end, consumers are not acting all that strangely, as many have claimed. Rather, most have simply outgrown the old youth-based marketing paradigm. Members of the New Consumer Majority think and act the way people in midlife and older have always thought and acted. It’s more accurate to say that the supply side of the equation has been acting strangely—sticking with old ways of doing things as though the worldviews, values, needs and behavior of young minds still ruled the marketplace.