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April 27, 2005

Forward on reverse ... Marketing reverse mortgages 101: It's all about understanding mature prospectsAtare E. Agbamu, CRMSreverse mortgage, credit, seniors
The new lords of the marketplace are watching us. How well do we
know them? "The marketing trend away from youth and toward age is
irreversible," writes Theodore Roszak in his very important book,
The Longevity Revolution.
How well do we understand age and the aging in the mortgage
origination industry? The new lords of the marketplace are
consumers age 40 and older. According to numbers compiled by
international marketing expert and author David B. Wolfe, in 2002,
they were estimated at 123.04 million; by contrast, the 18 to 39
age group was placed at 84.82 million. In 2010, just five years
away, the mature market will jump to 138.24 million, about 60
percent larger than the 18 to 39 demographic, which will increase
to just 86.97 million.
In addition, numbers compiled by the Bureau of Labor Statistics
and Wolfe Resources Group say those who are 45 and older will spend
approximately $1 trillion more than the youth demographic in five
years. I suggest that some spending power of the new bosses of the
marketplace will come from cash presently residing in the equity in
their homes. Increasingly, reverse mortgages are gaining acceptance
as better ways to turn equity into cash.
There are several reasons for these new realities in the
marketplace: baby boomers, born between 1946 and 1964, are 78
million strong; birthrate and fertility went bust after the
boomers; and fertility and birthrate are still down, according to
experts. Advances in medical technology, pharmaceuticals and public
health are keeping people alive longer and healthier.
How well do we understand age and the aging in the marketplace?
Not very well, because for more than 25 years, youththe values and
tastes of those under 40ruled the marketplace. Although the ruling
demographic is now the 40 and older group, much of mainstream
marketing still clings to marketing thought and values of a bygone
Understanding the new lords of the marketplace must move beyond
stereotypes about age and the aging. It must be deeper than
traditional demographic details such as age, income, spending
habits, zip codes, etc. While these ancient marketing tools are
still useful, the well-documented failures of traditional marketing
thought and techniques suggest fresh thinking for corporate
"Without an understanding of aging and aging customers, how can
a marketer be successful in marketing to the new customer
majority?" asked marketing experts David B. Wolfe with Robert E.
Snyder in their groundbreaking book, Ageless Marketing.
The quest for new thinking and better understanding of aging and
aging consumers must take us to developmental relationship
marketing (DRM), the seminal work of David B. Wolfe on aging
consumers and marketing across age-lines. What is DRM? That is the
subject of future articles in this column. For now, if we expect
our reverse mortgage marketing messages to connect with the new
powers of the marketplace, we must first seek to understand them.
It's all about understanding mature prospects.
Let's think forward on reverse!
Atare E. Agbamu,CRMS, is a reverse mortgage consultant with
Credo Mortgage, located
in the Twin Cities of Minnesota. Atare is regarded as an emerging
authority on reverse mortgages, and is frequently consulted by
financial professionals and families across America. His reverse
mortgage interviews have been Webcast on MortgageMag Live! Atare
serves on the Board of Little BrothersFriends of the Elderly in the
Twin Cities, and he is a trustee of The Little Brothers Foundation.
He can be reached by phone at (651) 389-1105 or e-mail