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CONSUMER
BEHAVIOR MARKETING: -- A REVOLUTIONARY APPROACH TO MARKETING
AND SALES TO BABY BOOMER & OLDER CONSUMER MARKETS
--by James J. Gilmartin
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| The Need for a Marketing and Sales Paradigm Shift |
The typical timeshare company is in need of a transformation. According to a 1998 survey of 1,572 households with
incomes of $30,000 or more conducted by RCI Consulting, ". . .a negative image of the timeshare marketing
and sales process still remains." There is an overwhelming negative image of mail advertisements, off-premise
contact solicitations and telephone solicitations. According to the survey, more than half of those attending timeshare
presentations "have a negative impression of the presentation."
The majority of the survey respondents agree that most timeshare sales
presentations involve high levels of pressure to buy (77.5 percent), and that being asked to make an immediate
purchase decision after a sales presentation indicates the offering is questionable (71.3 percent). According to
the survey, only 11.9 percent agree that most timeshare salespeople are trustworthy. The survey concluded that
"The timeshare industry needs to improve its marketing and sales strategies if it is to elevate resort timesharing's
public image significantly."
Coincident to these perceptions of timeshare marketing and sales, is the rapid aging of America. Every seven to
ten seconds someone turns fifty in America. In 1996, 50% of adult Americans were forty-three years of age or older.
In addition, over the next seventeen years the over fifty markets will increase by approximately 50%. The less
than fifty markets will increase by only 1%.
The United States Census data estimates the growth of maturing consumer markets to continue at a phenomenal rate.
The current 50+ populations total 65 million, with population estimates of 80 million by the year 2000, and to
97 million by 2010. Consider also that each day, approximately 6,000 Americans turn 65 years of age.
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Baby boomers and older consumers (maturing consumers) are also the biggest
spenders. They are the wealthiest, best educated and most sophisticated purchasers. In his book, Age Wave, Ken Dychwald, Ph.D.
explored some astounding statistics. Older maturing consumers:
- Control more than 70% of the total net worth of American households
-- $7 trillion of wealth
- Own 80% of all money in savings and loan associations
- Purchase approximately 43% of all domestic cars and 48% of all luxury
cars
- Purchase 80% of all luxury travels
- Purchase more than 25% of all the toys sold
- Purchase approximately 25% of all alcoholic beverages
- Spend more in the drugstore than any other age group
- Spend more disproportionately to their numbers
- Are not fanatically loyal to brands
- Spend more on health and personal care products than any other age group
- Purchase 37% of all over the counter medicine and 37% of all spa memberships
- Spend more per person in the grocery store than any other age group
- Watch television more than any other age group
- Read newspapers more than any other age group
- Spend more on quality children's clothing than any other age group
- They have more discretionary income (wealth) than any other age group.
The data shows that discretionary income rises and reaches its peak in the fifty-five to sixty-four-age bracket
In addition, they are living longer, enjoying better health and their
values are changing.
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And, these consumers are worth plenty! In 1993, for those in the thirty-five to forty-four age brackets, median
net worth was $29,202. For those in the forty-five to fifty-four age brackets, net worth rose to $57, 555. For
those in the fifty-five to sixty-four-age bracket it was much higher still: $91,480. Also consider this, during
the 1990's the 18 to 34 year olds numbered 9 million less than in 1989. This group will also spend $41 billion
less than the same age group did in the late 1980's. Thus, maturing consumers are significant markets for products
and services. Changes in the overall marketplace, and rapidly growing maturing consumer markets will combine to
forge new and creative approaches to securing market share and profit.
| Most Believe They See the World as it is, But We Really See it as We
Are. |
Unfortunately, many timeshare companies have cultures that promote a high level of pressure during the sales process.
The sales relationship starts out cordial, becomes quite friendly and then reaches a resounding crescendo of pressure
that turns off the potential customer and the sale may be lost. In addition to a very aggressive approach to sales
and marketing, as is surfaced by the RCI survey, management encourages tactical sales approaches rather than a
strategic approach to increasing sales closings. Because of all the rhetoric and media hyperbole about demographic
trends, marketers are often allowing the age of current and future customers to decide the company's approach to
marketing and sales.
| Age is the inappropriate focus. Timeshare companies have developed frames
of reference about maturing consumers that lump aging baby boomers into the "senior" category at a significant
cost to business. We strongly suggest removing the word "senior" from the timeshare company's vocabulary
unless there is a certainty that the euphemism is acceptable to potential customers. |
Finally, myths about aging and stereotypical thinking
about maturing consumers may be driving marketing and sales programs. This
approach to serving the wants and needs of this significant segment of the timeshare market is costing many companies
market share. Timeshare companies must develop marketing and sales strategies to respond to the changing needs
of maturing consumers. In doing so, marketers must position their company correctly to take advantage of the coming
changes that favor the company with a knowledgeable, strategic, systematic and integrated approach to securing
and serving maturing consumers.
| Like a Pig Moving Through a Python . . . |
No serious discussion of maturing consumer markets
can be complete without some discussion of the baby boomers. This
large group of World War II progeny born between 1946 and 1964, like the older consumers or "seniors",
has long suffered from being lumped together under a single label. It's as if 76 million are moving through life
as one organism (like a pig through a python).
Baby boomers have dominated household-based markets since shortly after the first reports in 1946 of a birth explosion.
No consumer industry -- no sector of U.S. society -- has escaped dramatic changes because of the sheer force of
numbers of this remarkable 18-year-span cohort.
Misconceptions about this significant segment of the marketplace currently exist. The problem is that we largely
fashion current perceptions out of past perceptions, with no allowance made for the personal growth that accompanies
maturity.
Aging boomers are no different from aging pre-boomers. Boomers are not, as so widely predicted, destined for a later life of perpetual
regrets over lost youth. Such predictions contradict the findings of better than 50 years' of research into adult
psychological development and brain and mind research. Those predictions ignore the idea of passages through the
seasons of life that dramatically alter behavior, as reported by Daniel Levenson in The seasons of a Man's Life.
Like their predecessors, boomers are becoming more
individualistic as they age. They do not often reference peer group dictates and values in making decisions. Post war affluence also allowed parents to indulge their children as never before.
They invested in their children's skills by sending them to college. They encouraged them to succeed in a job market
that rewarded competitive drive more than cooperative spirit, and individual skills more than teamwork. This individualistic
perspective is not something that baby boomers can turn off and on like a light switch. Like it or not, individualism
is here to stay.
The oldest boomers are 53, which places them squarely in the center of a "catered experience stage" of
life. These leading edge boomers are, indeed, at the center of consumer services markets. However, the precocious
boomers, consistent with their patterns all their lives, are entering the "being experience years/stage"
ahead of schedule. In the process, they are forming the most extraordinary middle-aged generation of all time;
one that presents the most complex sets of challenges to marketers and sales professionals in the history of modern
marketing.
The greater unknown of the future regarding spending habits of maturing consumers is how boomers will spend their
money as they age. Boomers' attitudes are not influenced by living through the Great Depression. It is anyone's
guess what aged boomers' attitudes on money will be. When marketing and selling timeshare, companies should watch
for the signs of differences between the traditional attitudes of older consumers and emerging attitudes of boomers.
Kevin Clancy and Robert Shulman, former heads of Yankelovich Clancy Shulman, wrote in The
Marketing Revolution "there is a marketing revolution coming
because failure is self-evident and everybody -- stockholders, directors, CEOs customers, the government -- is
angry because marketing, which should be driving business and sales, doesn't" work.
In their book, Driving Brand Value, Tom Duncan and Sandra Moriarty caution the reader about the credibility of
marketing communications agencies . . . "Most of these agencies, and especially ad agencies, have little expertise
in integrating marketing communications and designing constant messages that create purposeful dialogue, moves
customers through the buying process, and speak to all key stakeholders."
A 1994 Booz Allen & Hamilton report declared "brand managers were failing to get to grips with commercial
realities," while a 1995 McKinsey report somberly warned, "Doubts are surfacing about the very basis
of contemporary marketing." The report charged marketing departments with generating "few new ideas,
being "unimaginative, and failing to pick up the right signals."
Marketing desperately needs help. Other business
costs are falling while marketing costs are rising. Yet, response rates to many traditional marketing techniques
are not meeting expectations. There is growing impatience with a function of business that is costing more, delivering
less and resists accountability.
| What Was Before, is Now, and Ever Will Be . . . |
In the 1970's, we overlaid the largely demography-based approach to defining market segments with psychographic
factors that generally correlated consumer behavior with demographic profiles. The term cluster describes clusters
of people said to share similar lifestyles and values, and we arrayed the full spectrum of clusters in "lifestyle
typologies."
Lately, however, researchers are often writing about the growing ineffectiveness of traditional marketing segmentation
notions and strategies as they have finally evolved within the various typology systems. The concept advocated
in the remainder of this article is a new way of looking at consumers that transcends traditional ideas about market
segmentation.
| Consumer Behavior Marketing |
The alternative to the tried and true methods currently practiced by marketers is an approach to marketing incorporating
revolutionary new findings in brain and mind research. Consumer Behavior MarketingTM (CBM) will give marketers
and sales professionals unique access to the basic notions of marketing and sales:
- Knowledge of the market position of the company
- Knowledge and its business culture
- Knowledge of its products and services
- Knowledge of customers' needs
- Knowledge of customers' behavior and motivations
- Knowledge of how to start consumers' motivations in favor of product
purchase
- Knowledge of how to retain the consumer
Consumer behavior is a product of how the human brain and mind work that
challenge some enduring tenets of marketing and sales. Studies and observations have concluded:
- focusing on product features and benefits often is a
losing strategy in sales and advertising
- consumer surveys are one of the least effective ways
for learning why consumers buy products
- new research suggests that consumers' final decisions
are virtually never the direct product of reasoning processes.
The origins of CBM lie in a book written by David B. Wolfe, Serving the Ageless Market (McGraw-
Hill, 1990). In that book, Mr. Wolfe first proposed the idea that the levels of personal development determine
consumer behavior much more than the age of the consumer (Psychodynamics). Developmental Relationship Marketing
evolved from his psychodynamics' concepts and is currently used by major companies in ads, direct mail, and face-to-face
selling.
"Developmental Relationship Marketing revolves around the simplest definition of marketing [and sales], product-related
information processing," says Wolfe. Certain characteristics that define us as humans lead us all to process
information in approximately the same way. Knowledge of these processes provides a dependable map to guide marketers
and sales professionals in shaping and transmitting messages to consumers.
The concept is based on the premise that five systems of key underlying motivating values cause all human behavior.
Under this premise, all behavior stems from desires to satisfy needs that fall into five categories:
- Identity
- Relationships
- Centering or life purposes
- Adaptation, and
- Energy conservation and renewal
Knowledge of the timetable and nature of these developmental changes
enables a marketer and sales professional to accurately presume much about a consumer. Marketers and sales professionals
need to know a consumer's age, cultural background and gender. In addition, a better understanding of the brain
and mind communications process will, in some respects, provide more information than traditional consumer surveys
reveal.
Research tells us that communications first enter the brain and preconscious mind. The preconscious mind controls
information flow to the conscious mind by determining which information relates to a person's interests. Preconscious
screening of incoming information is necessary because more data enter the brain from the five senses than the
conscious mind can handle.
While the mechanisms of information processing are the same for everyone, these mechanisms manifest themselves
differently across the life span. These developmental changes involve changes in motivational forces and in how
we experience and think about matters. Their schedule and manner are predictable.
For the most part, marketing and sales have focused on database management -- more specifically, on data capture,
analysis and the creation and management of lead systems and customer relations programs. Besides the capture of
data, the key to successful marketing and sales to baby boomer and older consumers is a better understanding of
who they are, how they think and how their behavior changes as they age.
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As you consider your current and potential approach to securing a larger
share of maturing consumer markets, we suggest three steps to increase your knowledge, develop your plans and execute
your strategies.
| Three Steps to Increasing Your Profit |
Most believe they see the world as it is, but really, we see it as we are.
Step 1
Assessment
- Marketing and Sales Process Assessment
- Cycle of Sales Audit
- Among Customers
- Among Staff
- Product/Market Opportunity Assessment
- Communications Assessment
- Market and Sales Research: Motivational Segmentation
Potential Outcomes
- Determine magnitude of increased profit opportunity
- Plan for next step
The emotional test: I'll see it when I believe it vs. I'll believe it
when I see it.
Step 2
Planning
- Positioning/Communication/Sales Strategy
- Preliminary Concept Development
- Product/Packaging Implications
- Sales/Service Implications
- Marketing Communications and Sales Plan
- Market Research: Concept Testing
Potential Outcomes
- Define timing and investment required to pursue
- Plan for next step
Marketing and sales take place in the theater of the mind.
Step 3
Implementation
- Sales/Service Training
- Environmental Improvements
- Product/Packaging Implementation
- Marketing and Sales Campaign Development, Execution and Test Marketing
- Results Tracking
Potential Outcomes
- Make final execution decision
- Successful execution; build/retain business
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| Don't Make the Same Mistake Twice |
For all the talk about the wealth and income of older Americans, prospects
are good that the wealth and income of maturing consumers will be much greater in another ten years or so than
it is today. Many marketers and sales professionals do not understand the differences in the characteristics of
the boomers and this symbolizes the error in lumping all baby boomers together, just as it is done for other maturing
consumer markets.
| These Segments are Your Markets! |
Management cannot afford to ignore maturing consumers. In particular, Management needs to begin thinking about boomers in their latest
phase as maturing consumers - not as perpetual adolescents. As the boomers age, timeshare companies have no safer
alternative than to ride the boomers' "horse." Consider this: during the 1990's the 18 to 34 year olds
will number 9 million less than in 1989. This group will also spend $41 billion less than the same age group did
in the late 1980's.
The TimeShareBeat.com statistics' page tells the story. Eighty-six percent of timeshare owners are married couples
with household incomes more than double that of the USA national average.
Age distribution of owners is:
- over 55 years-- 37%
- 35 to 54 years-- 53.7%
- under 35 years-- 9.2%
- The average age of current timeshare buyers in the USA is 54 years old.
- The average age of timeshare owners in the USA is 49 years old.
Sources for the above information include: ARDA; The World Tourism Organization;
The US Census Bureau; Canadian Statistics; RCI; Interval International; and others.
To survive, companies will have to learn how to do
well in these markets. In contrast to the nine million decreases
in 18 to 34-year-olds between 1989 and 2000, there will be an increase of nearly 13 million (47 percent) of the
45-to-54 age cohort. The handwriting is on the wall for timesharing companies: With market size dramatically decreasing
in the young adult markets, managements' current healthy book of business today may show evidence of a sickness
in five to 10 years if management doesn't understand that and start to take action now.
Successful companies recognize the need to use new
approaches to adapt to a changing demographic environment. Identifying
and acting upon new opportunities in maturing consumer markets will result in increased profit. Marketers and sales
professionals should not continue to practice what they consider to be "tried and true" methods to attract
and retain maturing consumers. The aging process causes physiological, psychological and behavioral changes. Significantly
different marketing and sales approaches are required to maximize success.
| Go with the Grain of the Brain |
Marketing and sales management must take the time to understand such concepts and theories as life stage analysis
and the findings of brain and mind research. The next step is to apply that knowledge to marketing and sales development
decision making. This approach will significantly increase their chances of success in maturing consumer markets.
This knowledge will help companies to avoid costly and ineffective marketing and sales, improve the effectiveness
of communications and improve the user friendliness of the company to these markets.
In short, successful marketing and sales depend more
on what takes place in consumers' brains and minds than on product features and benefits. Yet, few marketers and
sale professionals have substantive understanding, much less coherent strategies for integrating into their decisions
how the brain and mind work.
Few groups offer as much potential as maturing consumers. Timeshare company success or failure is tied directly
to management's frame of reference and the strategic marketing and sales approach it takes to these most lucrative
markets. You can view your approach to maturing consumers as an opportunity or an unavoidable requirement -- the
choice is yours.
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