Segmenting Seniors…Or Not?

THE 50+ CROWD IS GROWING FAST. By 2010 the U.S. Census Bureau says there will be 97.1 million senior citizens across the country, compared to 77.8 million in 2001. They have lots of discretionary income and like to spend it, ringing up $400 billion in sales last year.

Contradicting assumptions often held by young brand managers, this group can be fickle when it comes to brand loyalty. In fact, seniors can be just as fickle as the much sought-after younger set, the 18-49 market.

“There are a lot of companies with younger brand management people who tend to put everybody over the age of 50 in the same category; it couldn’t be more wrong,” says Lori Bitter, a partner with Mature Market Group, a division of J. Walter Thompson Worldwide, in San Francisco. “The assumption is that everybody’s old, they’ve already made their brand choices for the rest of their lives and they’re not going to change.”

Of course, there are instances when lumping the group as one market segment can make perfect sense — for instance when pitching a health club. But more and more marketers are dissecting this huge group into sub-segments, whether it be simply by age or a more complex set of data points, to better target products and services.

Bitter and her team preach values-based segmentation for both the boomer and senior markets based on research the group conducted. “Values tend to be more stable over time and they tend to be held with more intensity as a person ages,” Bitter says. “These values can be very predictive in terms of how a person is going to react in a number of situations, consumer being one of them.”

The Values Portraits developed by the Mature Market Group classifies mature Americans with similar belief systems into eight groups. The research tool helps clients identify segments that have the richest potential for their products and to develop creative messaging to target more specifically.

The group is in the process of developing a proprietary database product based on the research they did on values-based segmentation for the boomer and senior markets. The product will for direct marketing efforts.

AARP looks at its huge membership base — 35 million — as three very distinct groups: those 50-59 (7 million), 60-69 (6.8 million) and 70+ (8.2 million) when developing its popular AARP The Magazine. (Its readership base is lower than total membership since it’s based on households; there may be more than one member per household.)

The magazine actually publishes three editions under one title. Editors craft editorial for boomers, then reedit, replace and tweak content and visuals for the 60-69 issue and then again for the 70+ version. And for the first time, the editors changed a cover image with the 2004 September/October issue. The 50-59 set get Kevin Spacey, while Julie Andrews was selected as a better fit for the over-60 reader.

“We want out members, when they turn from 59 to 60, to continue feeling the magazine is all about them,” says Jim Fishman, group publisher for AARP Publications.

AARP started out in the magazine business with Modern Maturity, then launched My Generation for its younger boomer members. Ultimately, oncerned that the two pubs confused members, it folded them under a single name, AARP The Magazine, about a year and a half ago. The versioning has opened up opportunities for marketers to target one or all three groups.

The strategy has believers. Michelob ULTRA, a seemingly unlikely candidate to run a promotion in the magazine, has a full-page ad running in the 50-59 version showing a fit and muscular 50-something man emerging dripping wet from a swimming pool with goggles pushed up on his forehead. A frothy, iced glass of beer sits next to a bottle of Michelob ULTRA in the upper right corner. The tag line reads: “Lose the carbs. Not the taste.”

“Our research indicated that 50+ consumers were looking for a beer that’s lighter, is low in carbohydrates, fills you up less and features a great taste, with that in mind our brewmasters perfected Michelob ULTRA,” says Rick Leininger, director, Michelob Family, Anheuser-Busch.

Anheuser-Busch is also sponsoring the Saturday evening concert, Sweet Baby James, starring James Taylor at this year’s AARP annual convention for members held Oct. 14-16 in Las Vegas and has an exhibit booth at the event. Procter & Gamble is sponsoring the closing show featuring Mary Tyler Moore and a lifestyle session on The Joy of Gardening. The company’s products will be on display at its exhibit booth. And General Motors is making its second trip to the event with its new Sit-N-Lift power seat available on select vehicles.

Back in the magazine, Volvo runs a full-page ad in every issue featuring a promotion of $1,000 off of any new Volvo S80 exclusive to AARP members. GNC’s full-page ad offers a clip-out coupon for $10 off GNC Preventive Nutrition Fast Flex, a dietary supplement joint formula. Both methods help measure ROI. Some advertisers create their own versions of the same ad to match the three different target groups.

Everybody in the pool

And then there are messages that don’t need segmentation within the 55+ group.

In April, Bally Total Fitness began a pilot program at its health club in Boca Raton, FL, that included a fitness program specifically for the senior market and a hefty promotional campaign to let them know about it. Printed brochures with the tag line “Bally for You: A fitness program designed for your age, your level, your time,” were distributed at local pharmacies, bowling leagues, Bingo events and restaurants with early bird specials as well as other venues. The images and copy are specifically directed at seniors pointing out that, “anyone over 55 knows that the body moves differently as we get older, energy levels change, we have more health concerns. In short, we have different fitness needs.”

“The biggest problem of all is overcoming their anxiety, their fear that they’ll be out of place, they’ll be embarrassed that they won’t be able to keep up with the program,” says John Ure, director of the Bally for You program in Boca Raton.

The brochure addresses those fears, highlighting Bally’s programs for exercising at your own pace or participating in group circuit training session, as well as time between programs for coffee and socializing. Bally reps piggybacked on events at local hospitals and other health care facilities to talk up the promotion, which offered one free month at the center.

The Boca Raton promotion boosted the club’s number of 55+ members to about 10%, a jump from the average 3.5% to 6%, Ure says. One 85-year-old couple, who had never been members of a health club, signed on.

“Now that’s a breakthrough and shows what latent potential there is out there for the health club,” Ure says.

A second test at a Bally in Fort Lauderdale began last month with a kickoff breakfast healthcare event. Members and guests 55+ learned about the program, watched demonstrations and won prizes. Body fat tests were available from vendors at the health fair and samples were handed out for health drinks and other products. A nationwide rollout is in development.

Surfing Seniors