Written by Grow your revenue and audience with personalized communication targeted to just the right segment.
In business, we sure sit through a lot of meetings. They crop up from almost every part of the enterprise: HR, news, advertising, special meetings, emergency meetings, and sales meetings.
However, if there were one that I had a dollar every time I sat through, it would be the “Let’s go after the younger generation” meeting. I would be independently wealthy now.
The truth is, the Millennial generation today just doesn’t have the intent (or the desire) to be the core of the newspaper base. I’m sure you’re not surprised by this. The credentials that came from the latest U.S. Consumer Expenditure Survey gave the news industry great motivation to focus on the age group of 50 and greater. You’ll find that Millennials comprise a single digit share of your overall subscription base.
Consumer Spending
In the last ten years, the total amount of spending for ages 50 and up has increased from 44% to 52%. Always a spending powerhouse, now they do more of what they do well: spend money.
Spending Momentum
The age group of 50 and up is spending $59,236 per household versus the age group of people under 50 who are spending almost the same amount, $60,984.
Spending Gap
The age group of 50 and over spent $350 billion more than the age group of those under 50 in 2017. That is four times more than the gap just two years before, $92 billion.
National Ramifications
The impact that the age group of people over 50 have on the economy is significant. From 2016 to 2017, 69% of the total consumer spending was all in thanks to the purchases made by the age group of people over 50.
Household Income
Annually, the age group of people 50 and up generate $67 billion more than those who are under 50.
Accumulated Wealth
The net worth of people 50 and up versus those who are under 50, in the past year, has grown three times faster (up to $20k vs $7.4k). As a result of the net worth growth of those over 50, 75% of the U.S. household net worth is due to those who are over 50.
Category Relevance
The age group of people 50 and up dominate spending in several key categories. These categories include life insurance, other personal insurance, healthcare, and new trucks/cars. They also dominate in a few surprising categories such as entertainment and personal care.
Home Ownership
People who are over 50 are more likely to own a home than those who are under 50 (77% vs 47%). Which in return means that people over 50 are less likely to be carrying a mortgage payment. Not having that mortgage payment frees up money to spend on a wide variety of other products.
Home Spending
The age group of people who are over 50 are responsible for over half of the net spending on pets (61%), household supplies (60%), vehicle repairs (60%), small appliances (58%), auto insurance (58%), major appliances (56%), audio/visual equipment/services (55%), household furnishings/equipment (54%), and food eaten at home (53%).
Population Growth
Based on government population projections, the age group of people over 50 is going to grow two times as fast as the age group of people under 50 in the next couple of years.
How to manage the 50+ boom
A great place to begin is firmly understanding your data. Get your team together and spend a few hours digging in. Have an “I Love Data Day.” Before you begin, be sure you have mapped age or age segments to your database. We can help you with this step. Other insightful demos are home ownership, income, net worth, education level, presence of children, and years of residence.
- Do segment age and other demos against your voluntary starts over the last six months. Does your data look different today that one or two years ago? Establish your trend.
- Do segment your various rate codes by age. Who’s paying the most rate? You should see a correlation among age as well as net worth.
- Retention. Who are your happiest customers? How does your churn rate differ between age groups? This will provide the insight to help you decide which segment really needs targeted retention and loyalty spend.
- Newsletters are a wonderful driver of acquisition and retention. Where you can, match those newsletter subscribers back to your segments. Understand which of your newsletter readers have the greatest propensity to subscribe. Likewise, create communications to drive your high propensity to churn print subscribers into newsletters.
- Reader segments of Shopper, Purchaser, and Brand Loyalist should be mapped against your demo segments. Understand the signals causing and motivating Shoppers to become Purchasers and eventually Brand Loyalists.
- Create personalized communication to each segment based on what you know about their demographics. Create customer personas. Put them up on the wall. Share them with your newsroom and advertising department counterparts. Get creative!
The Millennial generation is wonderful in so many ways! Counting on their loyal business to read and pay for the news they read is a tired and old strategy. It didn’t work before media was a fractured marketplace, and it hasn’t worked yet.
With the treasure chest of data that you manage and own, get personal with segments that are responsive. Test and optimize programs to grow lifetime value, reduce churn, and lower your cost per order.
There’s a world of people out there. Targeting is to data what personalization is to communication. Use automation to target and personalize your communications. Sure it’s more work, but the payoff is so much greater.
We love data! If you had time to read this blog, but really no time to create a segmented and actionable database, please contact us. That’s what we do. We’ll design a custom strategy to improve relationships with your customers. You’ll see greater revenue from enhanced lifetime value and lower customer churn.
You love your customers.
We help your customers love you back.