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Are retailers turning their backs on the most loyal customers in courting the tech-savvy?
Are older customers being alienated by retailers 'cool' communications?

by Andy Wood GI Insight

GENERAL MERCHANDISE

Are retailers turning their backs on the most loyal customers in courting the tech-savvy?

In the race to come up with the coolest, most cutting edge customer communications, are too many companies inadvertently killing their relationship with some of their most longstanding and profitable customers? What’s striking about the latest piece of research from GI Isight, was not which sectors are doing the best job of communicating with customers and which are doing the worst, but that so many sectors are simply doing a terrible job of reaching older consumers.

The 2013 Customer Intimacy Index, based on a survey of over 1,000 UK consumers, scores a range of sectors according to the level of knowledge of individual customers that companies in those industries demonstrate in their communications. Consumers representative of the UK by age, gender, region and social class were asked to rate ‘your supermarket’, ‘your bank’ and other types of businesses – with scores representing levels of familiarity ranging from ‘knows me like a close friend’ to ‘treats me like a total stranger’. The overall average was then set at 100. Every age group under 45 gave the companies they deal with above average ratings, with the 25-34-year-olds giving them the highest average score of any age band, but older consumers gave the businesses serving them very low grades on their understanding of customers, with 45-54-year-olds marking them an abysmal 28% below average – feeling like ‘total strangers’ indeed. And generally the more technical the product, the less engaged 45-plus consumers feel with the marketing. For instance, smartphone makers placed fourth in the Index, with consumers in the 25-34 age group giving them a sparkling 128 Index score but 45-54-year-olds gave them the woeful grade of just 62 – 38% below the overall average.

Is this a cliché that is to be expected? Possibly – but not as expected as you might think. Sure, in the digital age the young might be quicker on the uptake when it comes to the latest technology. But is that what is really at work here? I don’t think so. It’s not like most people who are 45-plus are unable to get their head round their iPhone, or their Blackberry, or their new Android phone. This is not about older customers not being technically savvy – it is that they feel the marketing is less relevant to them. This could be because all too often people that most plugged into the latest technology – and running that part of any business – tend to barely out of puberty.

The disconnect in this instance between marketers and a large portion of the marketplace really says more about the way the marketing is targeted and executed – at least when it comes to promoting new technology or using mobile as the medium to reach buyers – than about older consumers being out of touch. There is always a way to tailor the message and find the right medium for reaching consumers that are worth targeting. And think what you want, but the economic reality is that the 45-plus consumer remains a demographic well worth targeting. People in this group make up the largest spending block of the population. They not only have more disposable income – they also have more leisure time, and they still talk in complete sentences rather than txt spk lol. They are a desirable market that remains eminently reachable.

So how do you bridge the gap? Don’t ignore the more physical communication channels – specifically, the printed catalogue and direct mail. This demographic may require a more complex multi-channel approach. Don’t think that just because your product is the latest gadget, or a related product, that people only want to learn about it and be engaged via digital channels. They may, in fact, want to see communication from the print side – such as a really good mailer that perhaps leads them online. And for any product – whether it is the height of mobile digital technology or a hand-crafted piece of wood – allow customers to request information and ask them about their own requirements through a range of channels, and then play this back in language the individual consumer is comfortable with. Personalisation on the web or paper is easy enough these days – what it takes is time and effort. That’s what most organisations don’t realise. Systems can only do so much. You still need human beings to analyse what course of action is needed for various customer groups and determine the right approach for each segment. You have to look at what the customer wants and needs – not just what product, but what type of message they want to receive and what their preferred medium of communication is. This means listening to the customer and using data to understand who each is and what gets through to that consumer. That way you aren’t losing anyone along the way.

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