The Rest of the Story
One Man’s Opinion by Rick Smith
Like you, I have read multiple informative articles over the last three to five years on the changing customer base due to the shift from Baby Boomers. I appreciate those who have contributed information on this important topic, so why another article? Information sharing will be a continual process over the next few years as the transition continues. I will address or expand upon key factors creating trends and impacting the decisions on the mix of products and services, marketing plans, and what we need to focus on at the point of sales, now and into the future. These key points include
• The important difference between the population of each generation versus the population and mix of a buying group by age, currently, three, five, and eight years out.
• Why shifting all your focus over to a single generation and a lack of diversification of product would be a mistake, especially with water features.
• What real social and economical influences are changing Gen X’s priorities and life styles compared to the Baby Boomers, and it is not the unfair claims attributed to them being the “no dig generation,” lazy or possessing a poor work ethic, or just wanting to socialize all the time.
• Why when selling water features there is a tremendous benefit to diversifying feature designs, services, and the benefits of establishing business partnerships.
• Why Product Knowledge and Service is more important today than ever before.
Population by Generation versus Buying Group Demographics
There has been much focus on the mathematical impact of the 77 million Baby Boomers versus only 44 million Generation Xers. The important number is the demographics of the historically key discretionary buying group, ages 35 to 55. Since changing of the guard doesn’t happen all at once, say at 8:00 a.m. tomorrow morning, it will be a transition mandating the wisdom of buying for, marketing and sales to three generations at the same time. Would you be shocked if I told you the head count for this group will not change that much?
Knowing the mix of customers that make up the market, the transitional time frame, and the social and economical trends that will most likely impact this group will have value. Below are a couple of key questions we can ask ourselves in regards to the buying group mix:
1. What is the total population of the 35 to 55 age buying group today, in three, five, and eight years?
2. What percent of my individual market will each group represent in three, five, and eight years?
When comparing the size of each generation, it isn’t apples to apples. The Baby Boomer generation is measured in an 18 year span, (1946 to 1964) while Gen X is measured in a 15 year span, (1965 – 1980), and Gen Y in a 14 year span, (1981 to 1995). However, by looking at yearly birth rates, we can then apply a sliding scale and interpret how many of each generation falls in the 35 to 55 and 25 to 55 age buying groups currently, three, five, and eight years out.
The following charts will show that it isn’t the population of a generation that is as important as the population and trends of the buying group you want to market to.
The 35 to 55 Age Buying Group Chart shows us that this key discretionary buying group stays semi consistent in the 79 to 73 million range for the next 8 year time frame.
Even when we look at the 25 to 55 Age Buying Group Chart, it also stays consistent at 115 to 113 million. It can be concluded there is not a significant drop in population of this group either.
The 35 to 55 Age Group by Percent Chart is very interesting in that the percent of Gen X becomes increasingly significant by the year 2014. Notice that by 2019, Gen Y has not yet become a driving force in this key discretionary buying group.
The 25 to 55 Age Group by Percent Chart dramatically shows the shift. Even so, I still believe the 35 to 55 age group has a larger impact on our industry over the next eight years, and the 25 to 55 age group has a larger significance demographically on other industries right now. You’ll have to decide its impact for you and your business.
Real Social and Economical Influences
You can virtually attribute change to one of three things: social, economical, or political. The social and economic pressures of today have changed the priorities for Gen Xers, which in turn influences their buying habits.
I also think Gen Xers have been unfairly tagged with certain descriptions by some, or at least without an understanding as to what is “truly” influencing their priorities, and how it will play out over the next eight years. Understanding each of the issues provides an advantage enabling us to improve the marketing to the needs, and make adjustments accordingly to the social time tables before us.
Our industry relies heavily on home ownership. On average, Gen X is marrying, buying homes, and nesting in their late 20s or six years later than did the Baby Boomers. The question is…why? One factor is…the #1 priority for Gen Xers is to acquire personal and financial security before settling down with a home and family.
With more men and women completing higher education and increased college debt, securing a well paying career in a global economy demands mobility. Previously young women would get married and go wherever her husband had his career. Today more women are competing equally for those careers, and they too need to be willing to stay mobile in order to pursue career opportunities.
Surveys tell us that Gen Xers still want to get married one day, but not until they meet “the one” and are financially ready for such a commitment. Respondents frequently express the desire to “do it right – one time”. The biggest influence creating this mindset being that 50% of Gen Xers grew up with divorced parents and split homes.
Diversification of Water Features has a Tremendous Benefit
With such a diverse mix of customers and customer needs, it only makes sense that selling only water gardens would certainly limit your success. Homeowners with roots will trend towards water gardens, Just-A-Falls, and the fastest growing category hardscape designs that incorporate LED lit spillways or stainless steel spillway.
Fountains and statuary with basins, like EasyPro’s Tranquil Décor line, provides marketability to all customers, regardless of age group, while providing beauty and endless options for design placement. For those customers who need to stay mobile, the added advantages are a moveable water feature at a very reasonable cost.
LED lighting has come of age. For new installations or renovations, LED lighting is quickly replacing the old 20 watt systems, another example of add on sales with broad customer appeal and strong profit dollars for you.
Partnering up with other businesses is also a tactic to take advantage of and to support company growth. For example, a contractor/installer partnering with a lawn & garden center that doesn’t do their own installations. Team up with building contractors to add points of interest with water features, or be the water features expert for hardscape contractors who install block walls and patios. Commercial water features continue to do well as do fountains and aeration systems for small earthen ponds and commercial retention ponds. Overall, the opportunities are there if you successfully diversify.
Product and Service Knowledge at The Point of Sale Has Never Been As Important
I understand the need to balance sales staff hours with sales and peak customer counts. With that said, it is very important to provide the most knowledgeable sales staff at the point of sale.
Society is moving so fast these days that people don’t have the time to attend a one-hour seminar like they used to.
In fact, customers from all three of these generations use the web to conduct their research and most are more informed customers prior to arriving at your store or meeting with a contractor/installer. The sales staff, your front line, must be able to establish “trust” with the customer with product and industry knowledge. If the sales staff fails at this task, they fail to provide the “added value” to the relationship and the customer walks.
Unlike electronics, clothes, and other hard-goods, when it comes to home improvement projects and water features, today’s new homeowners still roll up their sleeves and are willing to dig in. They may do their research on the web, but still prefer to see it and touch it when making an in-store purchase or with their local contractor/installer.
The make-up of your targeted market is more important than the population of a given generation. For at least the next eight years diversification of water feature products for the 35 to 55 age market will be an advantage, and there is a water feature available for everyone no matter where they are in life.