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Sunday, January 29, 2012

Generational Economics: The Age of Upgrades

Marketing Observation:  To fully appreciate why people age 35 to 49 behave the way they do, we have to reflect on the type of spending that was going on when they were younger (age 18-34, or “the Age of Acquisition”; see immediately above).

Think about all those belongings the typical consumer acquires in their 20s and early 30s, which they usually did not own when they turned 18:  New cars, homes, furnishings, appliances, educations, spouses (or partners), children and more.  How did we acquire all of these things while earning what amounts to the median salary of a 26 year-old?

First, we had to make choices.  Compromises.  While we were buying almost everything, we could not afford to buy the BEST of everything.  So, we purchased a lot of entry-level goods.  From cars to starter homes to knock-down furniture… you know the routine.  Secondly, we racked up a lot of consumer debt.  There’s a reason credit card companies so often target young adults and teenagers.  A lot of people use credit cards to feed their insatiable consumer appetite during the age of acquisition.  And finally, we got help from the Bank of Mom and Dad.  Plenty of middle-age and older parents can tell you how expensive it can be to help their adult children get up-and-running.

But, lets get back to the Age of Upgrades.  By the time we turn 30, 35, or 40 years old, our purchasing priorities change a bit.  By now, most folks have their career well established, and a family underway.  And since you already own much of what you need, you shift from simple need-based purchasing to more want-based purchasing. You already have a (home, car, furniture), but now you’re ready for a nicer (home, car, furniture).   You decide it is time to jettison the knock-down furniture, and replace it with a solid oak wall unit.  Out with the entry-level domestic hatch back, in with the imported SUV. 

Note that for the Age of Upgrades, I’ve arbitrarily drawn the line at 35 to 49.  You might draw the line differently for different categories of products and services.  But either way, it is that life stage where low cost is replaced by quality as a purchase priority.  You’re often after products that are thought of as premium, rather than famous for being low-priced.

Marketing Implications:  A good word for people in their Age of Upgrades is “momentum.”  Their careers are moving forward, their children are growing, and life is moving at a very fast pace.  It’s a lot of work… and this group has every right to start feeling like they deserve a taste of the finer things (which is a relative term). 

What does your company sell that might be seen as a small reward or a well-deserved indulgence?  Does your marketing talk about the value-added services that might make this group feel like a pampered guest?  What do you offer that might be particularly active to their pride and joy (their children)?  Does your company, product or service help solve the time-sensitivity issues that can exist in households where people are juggling the demands of their career with the needs of their family?    

The Age of Upgrades is ready… to spend with companies that have upped their game.

Mike Anderson, for The Marketing Mind consumer trends blog, service of The Center for Sales Strategy.

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