The 60+ population is about to explode
American companies are increasingly focused on winning over the Millennial generation. Interestingly, there's no agreement on what it is.
The White House says it covers 25 years. Some demographers say 23. The Census Bureau says 19, and Pew Research says 17. And that's just a few of the differing definitions!
As a consequence, the number of reported Millennials varies a lot: from 76 million to over 110 million. As another consequence, this makes the size of Gen X vary from 49 - 70 million.
These varying generational boundaries are a problem because the relative sizes of the generations are often employed to determine how much effort to place on each of them. Rather than argue where the boundaries should be, the purpose of this post is to propose an alternative and more actionable way to think about the age of your customers.
Three big reasons to size a generation are to forecast demand for your products, prioritize product development efforts, and determine the relative importance of acquiring new customers versus hanging on to your existing ones.
. . . and thinking in terms of generations leaves a lot of potential insight on the table. As people age, get married, have children, retire, etc. the way they spend their money changes. Thinking about these life stages can help you frame opportunities in ways speaking in terms of generations can't. I'll provide more detail about how life stage drives spending in a future post. In the meantime, let's use age as a shorthand.
The chart below shows anticipated population growth, grouping people into five, twenty-year segments.
By the end of the next decade, the number of people over 60 is going to increase by over 20 million! In contrast the number of people between the ages of 20 - 39 and 40 - 59 will increase by 5.3 and 2.3 million respectively. And those 60+ year-olds are going to have more money than you likely think they will.
You may be thinking this doesn't matter because younger people have a greater potential for being long-term customers. Perhaps, but also consider this. It's a lot easier to retain an existing customer than it is to win over a new one, and the average 60 year-old is going to live well over twenty more years. Young and old, how many of your customer relationships last that long?
And lastly, this isn't an either/or proposition. The question isn't which age group to focus on exclusively. The question is what is the right proportion of effort to place on each age group and when.
Are you thinking about the opportunities and challenges this presents for your business? If not, then over the next few weeks, I'll be publishing a series of posts that may help you. In addition to focusing on income and spending I'll describe why the vast majority of wealth in the US country will inevitably be held by people above the age of 50.
Following these posts, I'll describe how market sizing, predictive modeling, market research and other analytical disciplines can be combined to help you identify and seize the opportunities before you.
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