Boomers Are Retiring
Look at a business-oriented social media space like LinkedIn today and you’ll see a lot of posts about Boomers retiring and what it means for corporate leadership, Gen Z and Millennial work trends, and even the occasional bit on the housing market. But beyond aging into retirement as a workforce consideration, the generational change around Boomers is causing a seismic shift in consumer markets that you might be ill prepared for. Never fear; Contata is here to describe the issues that may be coming for your business and what you can do to manage them.
The Population Shifts
Baby Boomers (defined by the Census Bureau as those born between 1946 and 1964) have been a key force in the US economy for several decades, and when the first Boomers started hitting age 55 in 2001, they began to reshape the near-retiree and retiree (55+) consumer markets. Since 2001, those markets have been in a steady growth state, but that time is coming to an end. The Boomer boom for 55+-oriented businesses is going bust, as growth has begun to slow dramatically for that age group. In many places, the 55+ and even 65+ population is already in decline.
“Ok, but new customers are aging into the 55+ bracket. Gen X will fill the gap.” Without wading into a generational brouhaha, the reality is that Gen X is a smaller generation than the Boomers preceding them and the Millennials following them.
In application, this means a lot of companies who have been watching their consumer base grow steadily YOY for 15-20 years are about to run headlong into a consumer base that is shrinking steadily for 15-20 years.
If you operate in the 55+ consumer space, have you made the right decisions on staffing and locations for a shrinking market? Do you have a plan to maintain revenue in a shrinking market? Contata has considered these problems and has you covered.
Even for markets with prime consumer groups in the 65+ category, some areas are already seeing those groups recede from recent growth trends.
So What Do I Do About This?
It is not all doom and gloom; a changing market just requires an effective approach. There are 2 main abilities that you need if you provide services to the 55+ market to keep your books in the black until Millennials start the next near-retiree growth market.
- The ability to make informed decisions about where business is going to be most negatively impacted by a changing population.
- The ability to reach the most profitable customers, even as the market contracts Contata has worked with Miracle-Ear to serve the near-retiree and retiree market for nearly 5 years through advanced AI-based prospective customer modeling; our research shows that this approach works and will reap increasing dividends as generational changes challenge these businesses. Contata can map and analyze the performance of stores as populations change to make sure they know what’s coming and adjust proactively, instead of waiting for the ledger to turn red.
The Power of Proper Prospecting
Contata has run direct mail marketing campaigns for franchisee business targeting seniors since 2018, using our Machine Learning Model (MLM) to build purchase likelihood scores for tens of millions of customers and send targeted mail to the most likely customers, reducing costs and increasing responses compared to traditional direct mail campaigns using less sophisticated targeting methods. We know our approach has worked; the data has born this out time and time again.
But how do we know this approach will continue to work? Because we did the math (of course we did). Mapping our campaigns against population trends in the American Community Survey, Contata analyzed how MLM has performed in places that are already seeing slower, or even negative, population growth for 55+ year old’s. The answer is: better than ever. Where 55+ populations are slowing in growth, Decile 1 (the top 10% highest propensity consumers) return a higher ROI, even as Decile 1 growth slows with the general population. In contrast, ROI from mailers to lower propensity groups drop off as populations stop growing. The return from proper targeting intensifies; the cost of improper targeting also intensifies.
The Power of Innovation
Contata has an approach that works, but we aren’t sitting idle. As your target market slows down or starts shrinking, you need innovation; Contata innovates. New approaches using the latest industry standards (email and digital amplification), constant analysis to build the model a little better through iterative AI learnings, finding the next piece of information that will amplify ROI by 10% and then looking for the next piece after that. A shrinking market is a challenge, but Contata is here to keep the opportunities open.