Direct Marketing to Mature Americans

Direct mail is a great way to reach the fast-growing mature market. This article explores key issues associated with direct marketing to this lucrative market and describes how your company can profit by tapping its potential.

OVERVIEW

Using direct marketing to reach the mature market—adults 50 years of age and older—can be rewarding, but it is also challenging. To do it right, you must have a list of appropriate names and addresses so that you can be sure to target households where mature adults exercise buying power. You must also understand the nature of the market and use communications that appeal to this group.

That's not as simple as it sounds. The 50-plus market is not just one market. It is made up of a number of diverse age groups and, within them, subgroups with different lifestyles and interests. Adults who have just turned 50 and are still active in the working world are very different from those who retired at 65.

Contrary to popular impression, mature Americans have a substantial amount of money to spend. According to the Direct Marketing Association's Statistical Fact Book '01, the average annual spending for consumers aged 45–54 was $45,475 in 1998, while those aged 55–64 spent $37,329 and those 65 and older $24,721. For the first two cohorts, that is markedly higher than the average annual expenditures for a U.S. adult in 1998 ($35,535).

In many respects, direct marketing is the ideal medium for reaching this segment of the population. Mature Americans tend to open direct mail pieces right away and read them. What's more, they are becoming enthusiastic online buyers, and the fervor is growing rapidly.

What types of companies are using direct marketing to reach the mature market? It's not just pharmaceuticals and health care anymore. Direct marketers sell a wide variety of products and services to the mature market, because it is growing and it is lucrative.

STATISTICS

The U.S had 78 million adults aged 50 and older in 2001, accounting for 28 percent of the total population, according to a Roper Report prepared for the American Association of Retired Persons (AARP). This number will grow by 19 million by 2010 as baby boomers continue to enter the mature market.

The report said 41 million first-wave baby boomers fill the 45–55 group, and this cohort will fill the 56–65 bracket over the next decade. Even with some losses to mortality, they will boost that group's size 42 percent to 34 million in 2010. Meanwhile, younger baby boomers will move into the 45–55 group.

Although people born before the boom dominate today's older market, this will diminish as boomers fill the mature population. But preboomers will remain a vital group. The 66–plus market, currently 33 million, will continue to grow, because boomers' parents are living longer and healthier lives than their parents did. By 2010, the population aged 66-plus will number 37 million.

The mature market is national, but some states are known for having a high percentage of older people. Not surprisingly, according to the U.S. Census Bureau, Florida has the highest population of adults aged 65 years and over (18.3 percent of the state's population). Other states with a high concentration of older adults are Pennsylvania (16 percent) and West Virginia, Iowa, North Dakota, and Rhode Island (each 15 percent).

GETTING STARTED

Before targeting adults aged 50 and older with a direct marketing campaign, be sure that you have a database of households that fit this demographic profile and, more important, that they respond regularly to direct mail. One of the best ways to do this is to purchase or rent a database of responsive households in this demographic group.

"The first thing to do is start with a large compiled file that meets some of your basic demographic needs, such as basic age demographics that are appropriate to your product or service," says Dennis Barnes, president of Marketing Direct Inc., St. Louis (http://www.marketingdirect.com). "Then, once you have your demographic groups defined, you can overlay it with lifestyle or psychographic information that allows you to see what a particular individual is made of. With this information in hand, you can figure out the best way to communicate with them."

Culling a variety of sources, Marketing Direct, which specializes in the mature market, first identifies a specific demographic group, such as adults aged 50–62 who are responsive to direct mail, and then uses this grouping as the basis for a campaign. This information might focus solely on the age demographic, or the data could be analyzed with modeling programs to create various selections, such as adults aged 50–62 within a specific income level or geographic area.

RESPONDING TO DIRECT MAIL

"A lot of companies are trying to identify what products could be a natural fit in their organization for marketing to the senior audience," says Barnes. "They are recognizing that not only is the mature market a growing market, it is the wealthiest subgroup of our population, representing about 40 percent of all consumer demand."

It's a segment that responds readily to interpersonal communication. "The mature market audience prefers to be regarded as individuals," says Barnes, "so by its nature, direct marketing has an advantage over other types of media. It allows you to communicate in a one-to-one manner."

Mature Americans are just as likely as those 50 and under to buy things through the mail or via other direct sources, says the Roper Report. Moreover, according to the Direct Marketing Association's Statistical Fact Book, they read direct mail pieces right away and act on the information. In 1999, for example, 47.1 percent of adults aged 55–64 read their direct mail pieces immediately, and 35.1 percent found the information useful. Results were even higher among those aged 65–69, where 51.4 percent read their direct mail immediately and 37 percent found it useful.

MARKETING THAT'S SENIOR-FRIENDLY

When targeting people in the mature market, what elements should a direct mail piece include? Experts point out that size does matter—the size of the type printed in a direct mail piece, that is. "Our typical rule is 12-point type or higher," says Barnes, "and, as the age of the person increases, you may want to increase the type size."

Barnes also recommends using soft colors, four-color photography, and showing mature people looking active. "Seniors like to think of themselves as about 15 or 20 years younger than they are," he says. "While our photographs may include someone with graying hair, they are clearly not people in the older segment of the mature market."

It's important not be condescending to seniors, however, and to demonstrate that what you're offering has value. "Show the mature-market consumer that your product or service provides meaningful value to them," Barnes emphasizes. "In typical direct marketing fashion, it really comes down to the offer and having a solid deal."

REACHING THE MATURE MARKET ONLINE

Is the mature market online? Yes, definitely. The demographic profile of the online senior is an attractive one for marketers, says research firm eMarketer, because these folks have more money than their offline counterparts and are more likely to be married and well educated. For example, while only 8 percent of seniors have incomes over $75,000, 25 percent of that group is wired.

Once online, the No. 1 place mature Americans visit is travel sites; 52 percent of those aged 50-plus have visited such sites. In general, seniors gravitate toward informational and leisure-oriented Web sites, from news, medical, and financial, to games, books, and sports. Those are areas in which they are already a powerful buying force, so marketers in these categories should be ready to approach them in a new way.

If large numbers of mature Americans are not shopping regularly online right now, that is sure to change. A study by researcher Jupiter Media Metrix found that while consumers aged 50 and up account for only 16 percent of the online shopping population, they will make up 30 percent of new shoppers between 2002 and 2006.

TOOLS OF THE TRADE

Before launching a direct mail program to the mature market, you'll probably enlist the help of service companies, such as those described below:

Consultants. They can save you time and money by filling you in on the basics, helping you design a program, referring you to vendor sources, and helping you track your progress.

List services. You will need to buy or rent lists of mature market households, and you can get them from a variety of places, including:

• List owners, such as magazine publishers, government agencies, and other organizations that sell the names, addresses, and phone numbers of people who use their products and services;
  
  
• List compilers, who market their own databases of household data that they cull from public and private sources;
  
  
• List brokers, who market other company's lists, often for a fee that is less than what you would pay if you approached the company directly.

DIRECT MARKETING SPECIALISTS

Before you start shopping for lists, however, take a sheet of paper and write down the characteristics that you expect qualified prospects to have. Think about the associations, clubs, or other organizations to which they are likely to belong. What publications do they read and what types of products do they buy? After you have completed this process, contact the organizations that best match your profile and see of you can rent their lists. Other services you might consider include:

List manager. In all likelihood, you will also need a company to help you maintain and prepare your mailing lists. A list manager can help you incorporate your own house list in your direct marketing program by collecting the names of customers and prospects that have responded to previous promotions and advertising.

Creative services. If you're not using a full-service agency, you'll need copywriters and designers, and the best way to find them is through referral. Look at companies in your business that have achieved success with direct mail and find out which suppliers they use. Check out any agency or freelancer you are considering. Look at samples of work similar to yours and be sure to negotiate prices in advance. One agency that caters to the 50-plus audience is http://www.hayesproductionsinc.com.

Printers and lettershop services. The same rules apply for selecting printers and lettershop services (labeling and mailing). Get a reliable referral from a company similar to yours. This is important, since it is critical to match the capabilities of these vendors to your needs. A large lettershop that specializes in mailing quantities of a million or more is probably not the best choice for the occasional small job.

Direct marketing companies. A full-service direct marketing company is equipped to help you aim your program at a specific group. Such companies as Marketing Direct Inc. use database marketing to compile consumer information from a client's own customer database and from a variety of public sources. Marketers can then select specific demographic groups and use these groupings as the basis of a targeted direct marketing program.

Services of this type often put together cooperative campaigns involving several advertisers. One form is an envelope with coupons from several advertisers that is mailed to households fitting a specific profile. 50Plus LLC, for example, is a joint venture of Marketing Direct and Hayes Productions, a graphic designer, sales promotion agency, and loyalty program company. The main product of 50Plus LLC (http://www.50plusonline.com) is a co-op promotion pack called Golden Advantage, which reaches one million independent-living mature adults in some 10,000 retirement communities. Golden Advantage packages contain valuable information, coupons, and samples, all targeted to the mature market.

HIGHLIGHTS OF THE MATURE MARKET

A few facts from the Web site, Sold on Seniors (http://www.soldonseniors.com):

• Every seven seconds someone in the U.S. turns 50;
• Seniors spend almost $2 trillion on goods and services each year;
• Per capita income of seniors is 28 percent higher than other groups;
• Over 30 percent of all homes offered for resale are by people age 65 and over;
• Seniors purchase 43 percent of all new cars;
• Seniors spend over $29 billion yearly on grandchildren's gifts;
• 60 percent of seniors purchase home remodeling products and services;
• Women over 50 spend $21 billion on clothes annually;
• Seniors account for over 80 percent of all the money in savings accounts;
• Seniors own 79 percent of America's financial assets;
• People over 50 dine out four to five times per week;
• Seniors account for over 79 percent of all leisure travel spending;
• Seniors visit malls more often than any other age group;
• Over 70 percent of seniors are willing to try new brands;
• Over 65 percent of seniors stick with brands if they like them;
• Local daily newspapers are read by 71 percent of seniors;
• 89 percent of seniors rate "being active" as critical to enjoying life.

CASE HISTORY

Secure Horizons, Tufts Health Plan for Seniors, based in Watertown, MA, offers health insurance to people with Medicare. It is one of the country's largest health plans for Medicare beneficiaries, with more than 102,000 members.

The organization recently sent a direct mail piece to 10,000 prospects that encouraged them to enroll in its health insurance program. The mailing was sent to a list of people who were over 65, Medicare-eligible, retired, and covered by their former employer.

The mailing was prepared with the help of Marketing Direct Inc., which provided database management and list services. It also helped design the direct mail piece, a self-mailer with a photograph of an active elderly person on the front. "It was really important that the elderly person look healthy and active," says Martha Byrd, marketing manager of Secure Horizons.

The mailing, which used 12-point type, was time-sensitive. It was sent in early December so that it would arrive at prospects' homes by the middle of the month, about two weeks before the period for open enrollment ended on January 1. The timing of the mailing, along with the look of the direct mail piece and a targeted mailing list, helped to make it a successful program.

"Because [the prospects] received the mail pieces from us during the open enrollment period, we were on the top of their minds when they were making their health insurance decisions," says Byrd. "We exceeded our goal by 300 percent."

FINDING A SUPPLIER

There are many resources to help you research the mature market and find suppliers. Here are a few of the most reliable:

Direct Marketing List Source provides more than 35,000 lists in 223 business and consumer market classifications, including the mature market. Includes information on more than 700 business and consumer co-op and package-insert programs. Six issues. An online version of the list source is included as part of the subscription. Lists are updated nightly, and the site provides Web links to list brokers, managers, and compilers. $567/yr. Call 800-851-7737; go to http://www.srds.com.

Direct Marketing Marketplace includes listings of service firms, suppliers, list brokers and suppliers, and direct marketing agencies plus associations, events, and periodicals. $324.99/yr. Call 800-340-3244.

The DMA 2001 Buyers' Guide and Membership Directory lists suppliers that provide direct marketing goods and services in 30 business categories, including alternative media, direct marketing media, direct response packaging, and sales promotion. Free to DMA members. Call 212-768-7277.

ASSOCIATIONS

The following associations offer resources and information about the mature market and using direct marketing to reach it:

Direct Marketing Association (DMA), with nearly 5,000 member companies worldwide,
is the primary association for companies involved with direct marketing. Member benefits include seminars and conferences, a membership directory, access to DMA's Service Locator Database, newsletters, use of the DMA library and resource center, and access to the DirectLINK online information service (see Online Services). Call 212-768-7277; go to http://www.the-dma.org.

National Council on the Aging is an association of organizations and individuals dedicated to promoting the dignity, self-determination, well-being, and continuing contributions of older person through leadership, service, and education. Its Web site contains facts and figures about the mature market. Call 202 479-1200; go to http://www.ncoa.org.

U.S. Department of Heath and Human Services—Administration on Aging is the federal agency dedicated to policy development, planning, and delivery of support services to older persons and their caregivers. Its Web site has statistics about the mature market. Call 202-619-7501; go to http://www.aoa.gov.

American Association of Retired Persons (AARP) is a nonprofit membership organization for people over 50. Its Research Center gathers information about the mature market. Call 800-424-3410; go to http://www.aarp.org/.

CONFERENCES AND SEMINARS

These seminars are geared toward direct marketing in general or to the mature market:

Mastering the 50+ Marketplace Seminar, sponsored by DMA, offers seminars and workshops on the mature market. Apr. 24, 2002, in New York City. Call 212-790-1500; go to http://www.the-dma.org.

Joint Conference of the National Council on the Aging and the American Society on Aging brings together experts from across North America. The conference has several sessions on marketing to seniors. Apr. 4–7, 2002, in Denver. Call 800-537-9728; go to http://www.agingconference.com.

DMA 85th Annual Conference and Exhibition is the largest direct marketing show. Includes a full floor of exhibits as well as professional seminars. Oct. 20–23, 2002, in San Francisco. Call 212-790-1500; go to http://www.the-dma.org.

DMA Professional Development and Training Seminars cover such subjects as business-to-business direct marketing, telephone marketing, and catalog selling. Held at various locations in the U.S. throughout the year. Call 212-768-7277; go to http://www.the-dma.org/events.

RESEARCH COMPANIES

These companies offer research services that help direct marketers understand the mature market and how to target it:

Seniors Research Group is a division of Market Strategies in alliance with the National Council on the Aging. SRG's research panel gives clients access to 20,000 mature adults, and its products profile predicts senior behavior with respect to specific industries. Call 800-420-9366; go to http://www.researchingseniors.com.

Georgia State University's Mature Market Center was established in 1987 in response to the growing need for businesses and government to understand the consumption behavior of the aging population. Its mission is to disseminate information that can help organizations improve the efficiency of their marketing activities and enhance the well-being of older adults. The center also serves as a clearinghouse for information about the mature market. Call 404-651-2740; go to http://www.marketing.gsu.edu/cmcs.htm.

Simmons Market Research Bureau, a subsidiary of Symmetrical Resources Inc., provides multimedia marketing information and offers advertising agencies, marketers, retailers, and media companies syndicated and proprietary research about a variety of markets, including the mature market. Call 212-373.8900; go to http://www.smrb.com.

MarketResearch.com offers products and services that provide market intelligence. With over 40,000 publications from more than 350 top consulting and advisory firms, the company offers instant online access to the world's most extensive database of market research. Many of the reports are about mature Americans. Call 800-298-5699; go to http://www.marketresearch.com.

RoperASW is a market research firm that offers a variety of research services to help marketers improve their communications, marketing, and advertising effectiveness. Its OmniTel survey is a cost-efficient way of tracking the buying habits of a representative national sample of adults. RoperASW also prepared the Roper Reports on the Mature Market for the AARP, 2001. Call 212-599-0700; go to http://www.roperasw.com.

Mediamark Research offers comprehensive demographic, lifestyle, and product-usage data collected from a single sample. It conducts more than 26,000 personal interviews annually with consumers throughout the U.S. to produce syndicated reports. Custom studies are conducted using the Internet, telephone, and mail samples. Call 800-310-3305; go to http://www.mediamarkresearch.com/.

KEY RESEARCH

Statistical Fact Book '01, published by DMA, reports on consumer buying habits, industry projections, and cost comparisons, using statistics from many sources. The book is organized into five sections: Direct Response Advertising, Media, Lists & Databases, Market Applications, and Practical Management. It has nearly 450 charts and graphs. $145 to DMA members, $225 nonmembers. Call 301-604-0187; go to http://www.the-dma.org.

U.S. Census Bureau studies, titled "Age: 2000" and "The 65-Year-and-Over Population: 2000," together provide a portrait of the age structure of the entire nation, its regions, states, counties, and cities. Introduced in October 2001, the studies are part of a series of Census 2000 briefs describing the population of the U.S. Call 301-457-2422; go to http://www.census.gov.

U.S. Department of Health and Human Service's Administration on Aging's report, "A Profile of older Americans: 2001," provides an in-depth look at all aspects of Americans aged 65 and older. Call 202-619-7501; go to http://www.aoa.gov.

eMarketer's report, "North America Online Report, January 2002," offers an in-depth look at online usage by all age groups. Call 877-378-2871; go to http://www.emarketer.com.

"Roper Reports on the Mature Market Prepared for the AARP, 2001" offers an in-depth look at how mature Americans use technology. Call AARP at 800-424-3410 or RoperASW at 212-599-0700; go to http://www.aarp.org or http://www.roperasw.com.

Jupiter Media Metrix's report, "Avoiding Irrelevance through Constant Consumer Analysis," concludes that tomorrow's online shopper will be older and less affluent. Call 877-464-6627; go to http://www.jmm.com/.

BOOKS

These books cover direct marketing to the mature market or direct marketing in general:

Silver Linings: Selling to the Expanding Mature Market, by Herschell Gordon Lewis, explores the gamut of marketing to seniors. 165 pp. 1996. Bonus Books. $40 through Amazon.com.

Marketing Financial Services to Seniors, by Larry Klein, offers insights into senior psychology that are intended to help financial services marketers create marketing strategies targeted to the mature market. 176 pp. 2001. NF Communications Inc. $39.95 through Amazon.com.

Sold on Seniors: How You Can Reach and Sell the $20-Trillion Senior Marketplace, by Gary Onks. 144 pp. 2001. Sold on Seniors Inc. $29.95.

Commonsense Direct Marketing, Fourth Edition, by Drayton Bird, includes advice on list-selection and tips for increasing the response to mailings. 352 pp. 2000. Kogan Page Ltd. $24.50 through Amazon.com.

Successful Direct Marketing Methods, Seventh Edition, by Bob Stone, Ron Jacobs, and H. Robert Wientzen. The authors are among the most authoritative sources in the direct marketing industry. 608 pp. 2001. McGraw-Hill Professional Publishing. $38.46 through Amazon.com.

PUBLICATIONS

These publications contain articles about marketing to the mature market plus statistical information:

"Selling to Seniors," monthly, is a newsletter that offers techniques to help businesses reach the mature market. A useful guide to mature consumers' attitudes, spending habits, and media preferences. Call 301-809-1866; go to http://www.cdpublications.com.

American Demographics, monthly, is targeted at marketers whose information needs center on understanding consumer trends and behavior. The online version includes access to an online supplier directory. Call 800-529-7502; go to http://www.inside.com.

Direct, 16 times/year, covers every aspect of direct marketing. It aims to help marketers find, reach, and keep their customers. The online version provides access to an online supplier directory. Direct has two e-newsletters: "Direct Newsline" and "Direct Listline." Call 888-892-3613; go to http://www.industryclick.com.

DM News, the weekly newspaper of record for direct marketers, has a large classified section and a source directory in addition to news. It covers seminars and conferences and runs features on a variety of direct marketing subjects. The online version includes a list directory and the DM Yellow Pages, a directory and buyer's guide to services and suppliers. There's also a daily e-newsletter, called "DM News Daily." Call 847-588-0675; go to http://www.dmnews.com.

Target Marketing, monthly, is aimed at direct marketing professionals. It includes regular features on lists and sources. Call 215-238-5443.

Direct Marketing Magazine, monthly, focuses on database marketers. Feature articles cover a wide range of issues. The magazine maintains an audio and a video library plus a well-organized directory. Call 516-746-6700.

ONLINE RESOURCES

The following Web sites present information about using direct marketing to reach the mature market:

Marketing Direct, Inc. provides integrated marketing services targeting the mature audience, from strategic development through tactical plan implementation. Go to http://www.marketingdirect.com.

50Plus LLC offers a targeted co-op promotion program delivering samples and promotional offers in February, July, and October to one million independent-living mature citizens. Go to http://www.50plusonline.com.

DirectLINK Online is an online database available to DMA members. It includes references from: more than 150 direct marketing and business magazines, newspapers, and newsletters; 800 reference books and directories; 1,500 case studies from DMA's Echo Awards; research reports; white papers; and company information. Go to http://www.the-dma.org/.

RELATED SMN ARTICLES

For information related to this article, click on 1010, Direct Marketing Overview, Part 1; 1020, Profiling and Modeling; and 6016, Integrated Marketing.