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 era.
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 America.
"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 [email protected].