ValueByRaymond D. Matkowsky
For years (1960 to present) media executives wanted to attract the eighteen to thirty-nine year olds to their marketing clients. This is the group that in the past would spend with abandonment. Not anymore! If you seek this group out for the old reasons, you will most likely find your sales falling because this group is not buying.
Why?
There are two reasons for this. One was explained in an article last month entitled “New Generations Don’t Buy the Same Way.” The second reason is that this group just doesn’t have the discretionary funds to spend on your products. Let me give you a real life example.
I have a relative who is an educated professional. His spouse is an educated professional. They have a two year old daughter and have been living in their own home for slightly longer.
This relative would purchase a new luxury vehicle every time the car’s warranty was about to run out. He recently went to a dealer with the idea of purchasing a new car only to find out that with all his other obligations he couldn’t afford the payments. This is happening thousands of times over and not just with cars. Plus, the kind of car he would purchase was not the kind of car he would need with a growing family.
What is a marketer to do if his customers cannot afford to buy?
As marketers you will need to stress value to all age groups. Don’t forget Baby Boomers have more disposable income than all the other classes combined and they live by the Golden Rule. “He who has the gold makes the rules.” They buy on value. You will also need to stress the value in your more pedestrian products. The products that younger generations need and can buy. If you think this attitude will pass; think again.
People who went through the Great Depression became very careful with spending. It took two generations to pass before people started to spend freely again. Can you wait that long?
The 2007 recession was the worse financial meltdown that many of the present 18 to 39 year olds witnessed. They have picked up many of the depression era habits of their forebears. It will be until they are grandparents or great grandparents before you could even hope for free spending to return.
What are you to do?
As marketers, what are you to do? First, sell necessities on value to all age groups. Sell luxuries (on value) to Baby Boomers. They have the excess income. Secondly, get as much profit out of an item without raising the price prohibitively. You do this by increasing efficiency. I have never seen a product or service that cannot be improved on. Even one that has recently been improved on. An Analysis of Variances is just one way to do so. What it comes down to is to test, tweak and test some more. Repeat often to maintain your edge.
Do you have any other suggestions, please share them with your fellow readers. Email me at rdm@datastats.com.
Copyright © 2015 Raymond D. Matkowsky
Raymond D. Matkowsky is the Chief Executive Officer of Data Stats, a consulting firm specializing in system or product improvement through mathematical and scientific modeling. He can be reached at rdm@datastats.com or through Data Stats’ web site at www.datastats.com |
