The Business Potential of "Old"
By Mary Lloyd
We're operating with a grossly outdated set of assumptions about what people are capable of as they get older. When you do that, you miss out on an incredible amount of talent. And you ignore the segment of the market that has the money.
How old is "old?" If you take your cue from federal regulations governing age discrimination, it's 40. If you believe an invitation to join AARP defines it, it's 50. If you're thinking in terms of Medicare, it's 65. None of those numbers is accurate for today's population.
When Social Security went into effect, the threshold of "old" was 65. That was 1935, and the average life expectancy for an American worker was 62. Now, it's approaching 80. In 1935, age 65 was 105% of life expectancy. Using the same percentage now, it would be 83. But if 83 is the real threshold for "old," what are all those people between 50 (or 40 or 65) and 83?
...A gold mine that we're ignoring as a culture. This group warrants a lot more attention -- as fulltime workers who can get the job done better than the new kids, as consumers whose unique needs go well beyond products to help them cope with their decline, and as the source of flexible staffing for organizations that might change the way we do work for the better for everyone.
People in this age group are assumed to be in decline and in need of lots of help. But they aren't. They lose interest in doing business with companies that see them as so much less than they are. And the rest of us assume that it's because they are just too old to stay engaged. Not really. We need to sell them products that are more exciting than long term care insurance and prescription medicine.
It's likely no segment of the population has ever been more misunderstood. Helen Harkness suggests why in Don't Stop the Career Clock. Her extensive review of the literature discovered that most studies done on the effects of aging have relied on the frail members of this group as the only data source. The sick people in any population are the ones enmeshed in the health care system and that's where the formal opinions of what those over 50 can do have been formed In reality, the majority of those in this age group are vital and looking for ways to engage socially, stay active physically, and contribute to their communities. Their business is worth currying.
But as long as we keep assuming 50 is old and 65 is really old, we won't see these folks as a market segment. They're just minutes from the mortuary, right? Wrong. They have as much as another 20 years as consumers.
Their financial clout is even more compelling. Those over 50 hold over 75% of the financial assets in the US and represent more than half of all the discretionary spending potential. The idea that they all have to be extremely frugal is a myth. More 18 - 24 year olds live below the poverty line than do those over 65. (Yet the movie business specifically targets the former segment…)
We need to be smarter about selling to older consumers. Marketing to them as "old" and "frail" and "in decline" is a dead end. Most are still interested, engaged and capable...And frustrated that they're being ignored. Serve them and your market share will grow.
This segment can make a huge difference in your staffing effectiveness, too. Those who want to work fulltime and have the experience you're looking for should be at the top of your list. They already know how to avoid the mistakes new hires make. They already know how to please a customer. The skills and knowledge they've gained at other companies can be a major benefit to you.
If you are willing to get creative, you can get the best of the best and only when you need them. When Merrill Lynch Foundation surveyed 3000 baby boomers about how they wanted work to fit into their retirement plans, 42% of the group wanted to cycle in and out of work. How can you use that to your advantage? Finding ways to hire that experience only when you need it is a win for both employer and worker.
Assuming those over 50 have reached the expiration date on usefulness is short-sighted. Look for ways to incorporate this segment of the population in your business planning. They have money to spend, experience to bring, and they value flexibility more than a huge salary. They're a gold mine.