Marketing to Older People: Fact and Fiction

The following article is to appear next month in BT Resources, a newsletter sent by BT to its financial services customers.

Marketing to Older People: Fact and Fiction

The population of the UK is now older than ever before. According to the Office for National Statistics, there are now more adults aged over 45 than there are under 45. This was described by a Government report last year as a ‘tipping point’ and the UK population will continue to age for the foreseeable future. According to the Economist (26.06.09), this is a ‘slow-moving but relentless development that in time will have vast economic, social and political consequences’.

For the financial services industry in particular, an ageing population provides many opportunities. However, there also challenges – not least, cutting though the many false assumptions, stereotypes and myths surrounding this important group. If these are not identified and avoided, customer relationships will inevitably suffer. To demonstrate this, let’s examine three areas of relevance to anyone working in the financial services sector: customer wealth, retirement and imagery.

Customer wealth
Just about every time you read an article about marketing and the over-50s, you will inevitably be told that this group accounts for 80% of the UK’s wealth. Coupled with the size of this group, this ‘fact’ suggests a large, relatively untapped and lucrative target market. However, the most extensive, thorough and impressive research programme ever conducted into older people - the COI 'Common Good' research project (2006) - concluded that: 'there is insufficient data available to support this apparent fact and we have been unable to find support for it."

The reality is that this is an extremely diverse and complex group of more than 20 million people. Some people are extremely wealthy, while it is also the case that – according to Age Concern – more than 2 million older people live in poverty. The message here is that the basics of marketing – segmentation, targeting and positioning – are crucial. Do not rush into mass marketing on the assumption that most older people are extremely wealthy.

Retirement
Harriet Harman - in her role as Minister for Women and Equality – recently pledged to end compulsory retirement, hence giving people the right to work beyond the state pension age (SPA) of 65 for men and 60 for women. The fact that older people are able to enjoy equality in the labour market is of course to be welcomed.

However, this is not just about personal freedom, human rights and social justice. For many people, continuing to work after the SPA is not a matter of choice but of necessity. As Andrew Harrop of Age Concern/Help the Aged recently commented (11.01.10), ‘Millions of old workers need to carry on working past state pension age to boost their savings and pension pots’. What’s more, many such jobs are likely to be low-paid and part-time – only the minority will be engaging in a ‘portfolio existence’ of consultancy projects, non-executive directorships, and golfing holidays in the Algarve.

And of course, continuing to work after the SPA assumes that one has a job in the first place. In fact, 30% of people aged between 50 and the SPA are unemployed, mostly involuntarily. As a result, this age group now exhibits the highest rate of entrepreneurial activity, with many people starting second careers in their fifties.

For these reasons, retirement should now be seen as a process, not an event, says Paul Sweeting, Professor of Actuarial Science at the University of Kent. In fact, just 17% of men and 10% of women now retire at the SPA, according to the Older Workers Employment Network.

Imagery
According to press releases and publicity materials issued by many financial services companies (I will name no names), life has never been better for people entering retirement. A vivid picture is painted of a ‘generation’ which ‘according to new research’ is invariably enjoying life more than ever before. This healthy, active generation is busily riding bikes, travelling the world, bungee-jumping and generally enjoying a carefree life of freedom, unencumbered by financial concerns.

The research of one company found that people aged 52-60 are apparently ‘living a dream life that is the envy of the younger generation’ and have found ‘a form of perfect work/life balance’. Another found a ‘new generation’ of ‘GoAPs – ‘Go-getting Active Pensioners’ which ‘rips up the rule book on retirement’ and can claim that ‘we’ve never had it do good’. And one otherwise highly-respected organisation recently described people over 50 as ‘Gap Year Grannies’ – I’ll leave you to fill in the gaps here.

This group of shiny, happy people is sometimes described as the ‘baby boomer generation’ – that demographic bulge of people born between 1946 and 1965. This age group is said to confound societal expectations in terms of activities, aspirations, attitudes, behaviour and lifestyle. In reality, it is implausible that millions of people will share anything very much simply because they are the same age. Unless a range of other segmentation variables are also applied, targeting by age alone is unlikely to be effective.

Above all, it is important to note a number of studies which have found that most people approaching retirement are extremely concerned about their future finances. And with good reason – a major research study published in December 2009 by Janus Capital again confirmed the ‘alarming deficits’ in personal savings and retirement provision that bedevil the pensions industry. What’s more, the increasing number of people having to care for both their adult children and their ageing parents – the so-called ‘sandwich generation’ – are finding their savings being eroded before retirement.

The imagery used in advertising and communications materials is also often at variance with reality. There is a solid body of research which demonstrates that images of older people are either excluded altogether from advertising and communications materials, or are demeaning, patronising or stereotypical when used. According to academic researchers Carrigan and Szmigin, ‘despite all the evidence, advertisers continue to pursue youth’. And not surprisingly, older people resent this – all the research tells us that older people wish to be recognised, treated as serious consumers, and depicted in a realistic manner.

This is a large, complex and diverse age group. They are not a ‘generation’, they are not a homogenous group, and they do not wish to be defined by age. Most importantly, they do not conform to a set of pre-defined rules. I wish you well in your efforts to work with your older customers to formulate your own shared rules.

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Mark Beasley is a partner in rhc advantage, the creative marketing agency specialising in older audiences. For further information, or for a free copy of their research report ‘Marketing and Older Audiences’, visit www.rhcadvantage.co.uk

Good news - or is it? IPA Agency Census reveals that agency staff are getting younger

The IPA (Institute of Practitioners in Advertising) has today published the main findings of its 2009 Agency Census (www.ipa.co.uk). This annual survey is described (by the IPA) as ‘the definitive annual agency survey of employment trends in media, advertising and marketing communications agencies.’.

And the good news is that year-on-year the average age of agency employees has increased, as has the percentage of employees aged over 50. Or perhaps it isn’t such good news after all. Let’s look at the figures:

• 45.2% of agency employees are aged under 30 (2008 – 47.6%)
• 5.2% of agency employees are aged over 50 (2008 – 5%)
• The average age of employees is 33.7 (2008 – 33.3)
• The employed base has declined by 7.4%, driven mainly by a decline in
employees aged under 25 and first-year trainees

As Hamish Pringle, the Director General of the IPA comments, this has been ‘the toughest period for agencies in living memory.’. It is hardly surprising that the recruitment of graduates and younger people has declined and of course this is the reason for the extremely small increases in employee age. Certainly, there is no evidence of a drive by agencies to recruit on the basis of age and experience! In fact, I suspect that there has actually been a decline in the number of older employees.

The comparative youth of people working in agencies is often given as the reason behind ageism in advertising and marketing communications, whereby according to some researchers 'despite all the evidence, advertisers continue to pursue youth.'

The average age of adults in the UK is now 45 – not 33. The mainstream has been ageing for the past 30 years and will continue to do so. How you can have any interest, empathy or insight into older consumers, when you live in a ghetto of youth, fashion and cool? As the census itself acknowledges, agencies have some way to go in terms of diversity - so full marks for honesty.

For many years, the required attributes for agency staff have included creativity, energy, enthusiasm and vibrancy, not to mention a direct connection with the zeitgeist. These attributes have become associated with youthfulness.

That’s why we formed rhc advantage: to offer high levels of expertise, based upon understanding and insight of older audiences, delivered by talented people who are themselves older (but are not yet disconnected from the zeitgeist).

www.rhcadvantage.co.uk

Marketing to older audiences. Myths and Legends - Part One

Just how wealthy are 'older people' ?

The statement that 'older people hold 80% of the UK's wealth' is repeatedly quoted as though it were an incontrovertible fact requiring no substantiation or support. In fact, it seems to have become an accepted myth: if you read an article on the subject of marketing and older people, there is a very good chance you will read this 'fact'.

The most recent example of this is in the current 'engage' newsletter, issued by Age Concern and Help the Aged. This introduces recent research conducted by 20plus30 and Mature Marketing into older consumers and the recession. Both newsletter and research report boldly assert (without referencing a source) that: 'Despite older people holding 80% of savings and investment assets...'

Our own extensive review of data and research relating to older people (available at no charge via www.rhcadvantage.co.uk) could find no support for this assertion. There is some evidence that older people hold a disproportionate amount of wealth - however, it is also claimed (by Age Concern / Help the Aged) that over 2 million older people live in poverty. Where a source is given, it is often either vague ('according to a report from the Henley Centre') or attributed to a secondary source (for example, the only publicly-available data from Age Concern/Help the Aged on this subject references a book - 'Older, Richer, Fitter' - published in 2005).

Probably the most extensive, thorough and impressive research programme ever conducted in this area was the COI 'Common Good' research project (2006). This commented on the "statistic" of older people holding 80% of the UK's wealth as follows: 'there is insufficient data available to support this apparent fact and we have been unable to find support for it."

Can anyone provide a definitive - by which I mean primary, and reputable - source for this alleged 'fact', please? Or, may I suggest that it is no longer used, and we find some more accurate, meaningful and properly sourced facts to put into the public domain? If we are to overcome the inherent ageism of UK society and business, and the many incorrect assumptions held about older people, we must not fall into the same trap (by propagating allowing our own inaccurae information to be propagated). And in any case, why should 'wealth' be allowed to become the most important 'fact'? Wealth is relevant only if one can establish a direct relationship between wealth and expenditure.