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Sorting consumers into age groups seems to make sense because it presumably makes clearer where marketing dollars and effort will yield the best results. This has usually meant much bigger investments in younger markets because many marketers believe that the marketplace value of people 35 and older falls with rising age. After 50, they fade from most marketers’ radar screens altogether.
But segmenting consumers by age now makes less sense. Unprecedented changes in marketplace demography make age-based marketing increasingly counterproductive. Slow population growth or actual shrinkage in five-year age groups from 10-14-year-olds to 40-44-year-olds is eroding the traditionally biggest source of growth in consumer demand. The 25-44-age cohort, who spends most per capita on vehicles, housing and housing related products, is shrinking by 4.3 million people in this decade. These conditions are forcing many companies to look beyond their traditional target age groups for growth, but they raise the long-standing marketing dilemma of courting older consumers without turning younger consumers off.
Ageless marketing gets around that problem by invoking values that resonate across generational divides and by tuning marketing, including product design, promotions and customer relations, to psychological stages of life.
One Exemplar in Ageless Marketing
In the late 1980s, New Balance sneaker maker CEO Jim Davis observed that his company’s younger markets were shrinking – the result of over two decades of births below levels needed to replace the population. But Davis also saw that older populations were just entering a period of explosive growth. So Davis set his sights on people 40 and older that in 1989 became the New Customer Majority, following the principles of ageless marketing.
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By the mid-1990s, growth of the U.S. sneaker market had all but ceased. But, “Propelled by the strongest customer loyalty of any sneaker company and the unexpected mass appeal of its 800 line of trail running shoes, New Balance catapulted from No.8 in the industry in 1995 to No. 4 today (behind Nike, Adidas, and Reebok). The last three years have been particularly fruitful, as the favored shoe company of Bill Clinton and Willie Nelson increased its market share from 3% to 10%, while Nike dropped from 48% to 43%, and Reebok fell from 15% to 12%.”
Aside from the obvious competitive advantage of more shoe widths than customary in the industry, New Balance took off by striking a deep chord with aging boomers by appealing to the more introspective, individuated and autonomous bent that is typical of people in middle age. Rather than exalting athletic performance and winning, New Balance speaks to the inner self in search of deeper meaning in life – and, not incidentally, for new balance.
The payoff for New Balance has been an average of 25% annual growth over the past five years, a remarkable achievement in a category that has seen no real growth in going on a decade. The fact that New Balance’s sales in youth markets have been growing faster than those of other members of the Big Four makes the case for ageless marketing as a viable strategy in this era of major demographic realignment. With stalled population growth or shrinkage in younger markets, the future of many companies depends on their ability to draw customers from a wide spectrum of ages. Ageless marketing is the most productive way of doing this.
Ageless marketing is derived from developmental relationship marketing. DRM is platform for conducting research and marketing tasks that draws on well-established tenets of developmental psychology that define the general character of people’s worldviews, values, views and needs by season of life. Ageless marketing also employs new insights into the workings of the brain and mind that are unraveling some of the most hallowed traditions in consumer research and marketing practice.
1Benoit Denizet-Lewis, “Race Against the Machine: Why New Balance is Making Nike Sweat,” Boston Magazine, April 2001
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Ageless Marketing Explained 