Consumer Segmentation

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REGIONAL BANK CONSUMER SEGMENTATION STRATEGY

BRIAN S. HARRINGTON

425.503.0586

[email protected]

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OBJECTIVES

Phase I – Consumer Generational Deep Dive

Regional Bank has defined their retail banking consumer target as age 55+– This large group consists of 3 generations with remarkably different attitudes & behaviors– Seniors are G.I. and Silent Generations

Goal of presentation is to develop key insights on this target by each generation to proceed to Phase II

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EXECUTIVE SU

MM

ARY

Key Generational Statements– G.I. generation is known for having had it all and then lost it– Silent generation is known for starting with nothing and then gaining it all– Boomers generation is known for being rebellious and selfish

Key Generational Facts– G.I.

≈ The most fascinating generation on the planet. Their Depression was The Great One; their War was The Big One; their prosperity was the legendary Happy Days. They saved the world and then built a nation. They are the assertive and energetic do’ers. Excellent team players. Community-minded

– Silent ≈ Our country’s Last Innocent Generation. Went through their formative years during an era of suffocating

conformity, but also during the post-war Happy Days. The richest, most free-spending retirees in history. Under-appreciated and often overlooked

– Boomers ≈ The save-the-world revolutionaries of the ‘60s and ‘70s who provided the passion and masses to the

dizzying cultural revolutions of the Consciousness Movement; and, they are also they party-hardy career climbers of the ‘70s/’80s. Their aging will change America almost incomprehensibly. The American Youth Culture that began with them is now ENDING with them. Their activism is beginning to re-emerge

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MED

IA BEH

AVIO

R

Source: Forrester’s NACTAS 2006 Benchmark Study

Boomers and Seniors are the most annoyed by the amount of advertising today

Boomers and Seniors are the most active newspaper readers and TV viewers

Seniors and Boomers do not use the internet

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SOCIA

L TYPES

Born/Youth: 0-21, Rising Adulthood: 22-43, Midlife: 44-65, Elderhood: 66-87

Civic– They are heroic, collegial, and rationalistic. Core values include community,

technology, affluence. A typical weakness (as least as perceived by others) might be insensitivity (rationalism taken to excess)

Adaptive– They are conformist, sensitive, and cultured. Core values include pluralism,

expertise, and social justice. A typical weakness (as least as perceived by others) might be superficiality (adaptability taken to excess)

Idealist– They are visionary, individualistic, and spiritual. Core values include principle,

religion, education. A typical weakness (as least as perceived by others) might be dogmatism (principles taken to excess)

Reactive– They are rebellious, pragmatic, and materialistic. Core values include liberty,

practicality, survival. A typical weakness (as least as perceived by others) might be amoralism (pragmatism taken to excess)

Civic Adaptive Idealist ReactiveG.I. & Millennials Silent & Homeland Boomers Lost & Gen X

Unraveling Youth Elderhood Midlife Rising Adulthood

Crisis Rising Adulthood Youth Elderhood Midlife

High Midlife Rising Adulthood Youth Elderhood

Awakening Elderhood Midlife Rising Adulthood Youth

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SOCIA

L MO

VEMEN

TS

Inner-Driven Era Crisis Era Outer-Driven Era Awakening Era Inner-Driven Era Crisis Era Outer-Driven Era1901-1924 1925-1942 1943-1960 1961-1980 1981-2002 2002-2025 2026-2051

Coming of Age Reactive (Lost) Civic (G.I.) Adaptive (Silent) Idealist (Boomer) Reactive (Gen X) Civic (Millennial) Adaptive (Homeland)

Definition Individualism flourishes, new ideals are cultivated in separate camps, confidence in institutions declines and secular problems are deferred

Opens with growing collective unity in the face of perceived social peril and culminates in a secular crisis in which danger is overcome and one set of new ideals triumphs

Society turns toward conformity and stability, triumphant ideals are secularized and spiritual discontent is deferred

Triggers cultural creativity and the emergence of new ideals, as institutions built around old values are challenged by the emergence of a spiritual awakening

Individualism flourishes, new ideals are cultivated in separate camps, confidence in institutions declines and secular problems are deferred

Opens with growing collective unity in the face of perceived social peril and culminates in a secular crisis in which danger is overcome and one set of new ideals triumphs

Society turns toward conformity and stability, triumphant ideals are secularized and spiritual discontent is deferred

A social movement is when people perceive an historic event that radically alters their social environment

– There are two types of social movements (they never appear next to each other)≈ Secular Crises: when society focuses on reordering the outer world of institutions and

public behavior≈ Spiritual Awakenings: when society focuses on changing the inner world of values and

private behavior

Over the next 19 years, we will be going through a Crisis Era, which was started by 9/11. The next era will start in 2026 at which time it will become a more stable time

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G.I. G

ENERA

TION

S (1901-1924…84-107 yrs/old)

Type: Civic– Collective Lifecycle: 1901-2004 (last cohort turns 80)

Total Born: 63MM– Alive now: 6.9MM (11.1%) based on 2002 U.S. Census Data– Immigrants: 5.7MM (9%)

Prominent Members– Walt Disney, Walter Cronkite, Ronald Reagan, John Wayne

Historical Events– Boy & Girl Scouts founded, Charles Lindbergh transatlantic flight, WWI, Great Depression, FDR New Deal, Women’s

Voting Rights, Prohibition– War: World War I & World War II

Technology Inception…Radio

Movie…The Gold Rush, Gone with the Wind, The Jazz Singer

Music…Jazz/Blues/Ballads…Irving Berlin, Ziegfeld Follies, George Gershwin

Motto…Power

Positive Attributes…Rational, Selfless, Competent

Negative Attributes…Overbold, Unreflective, Insensitive

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G.I. G

ENERA

TION

S A “good kid” reputation as they were the beneficiaries of new playgrounds, vitamins and

child-labor restrictions

As young adults, they patiently endured depression and heroically conquered foreign enemies

In a midlife, being subsidized by the G.I. Bill, they built gleaming suburbs, invented miracle vaccines and launched moon rockets

GI's were the first group to call themselves "senior citizens"

Formality - wear suits and ties everywhere

Uniformity - it is good and normal for everyone to agree, work the same and look the same

Cooperative - put trust in government, authority and community

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SILENT G

ENERA

TION

S (1925-1942…66-83 yrs/old)

Type: Adaptive– Collective Lifecycle: 1925-2022 (last cohort turns 80)

Total Born: 49MM– Alive now: 30.1MM (61.5%) based on 2002 U.S. Census– Immigrants: 4.4MM (9%)

Prominent Members– Martin Luther King, Jr., Neil Armstrong, Woody Allen

Historical Events– Great Depression, McCarthyism, Peace Corps founded, A-Bomb, Stock Market Crash– War: World War II & Korea War

Technology Inception…Black & White Television

Movie…Singing in the Rain, On the Waterfront, It’s A Wonderful Life

Music…Swing/Jazz Bop/early Rock n’ Roll…Glenn Miller, Count Bassie, Miles Davies, Bill Haley, Chuck Berry

Motto…Love

Positive Attributes…Caring, Open-minded, Expert

Negative Attributes…Indecisive, Guilt-Riden, Neurotic

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SILENT G

ENERA

TION

S (1925-1942…66-83 yrs/old)

Grew up as the suffocated children of war and depression

They came of age just too late to be war heroes and just too early to be youthful free spirits

They generally have been found to be ambitious, often seeking achievement, power and status

Economic losses that effected a family status left children with an ambitious desire to overcome such losses, leading to a generation of aspirations, goals and purpose

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BOO

MER G

ENERA

TION

S (1943-1960…48-65 yrs/old)

Type: Idealist– Collective Lifecycle: 1943-2040 (last cohort turns 80)

Total Born: 79MM– Alive now: 55.5MM (70.3%) based on 2002 U.S. Census– Immigrants: 7.9MM (10%)

Prominent Members– Steven Spielberg, Steven Jobs, Donald Trump, Bill Clinton, Oprah Winfrey

Historical Events– Watergate, Vietnam, TV generations, Moon Landing, Sputnik, Polio Vaccine discovered, Assassinations of JFK &

MLK, Woodstock, Civil Rights, Bay of Bigs/Castro came to power, Disneyland opened– War: Korea War & Vietnam

Technology Inception…Color Television

Movie…The Graduate, Psycho, Easy Rider, The Sound of Music

Music…Rock…Jimi Hendrix, The Who, Led Zeppelin, Elvis Presley

Motto…Truth

Positive Attributes…Principled, Resolute, Creative

Negative Attributes…Ruthless, Selfish. Arrogant

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BOO

MER G

ENERA

TION

S (1943-1960…48-65 yrs/old)

Self-focused, spoiled, self-absorbed and they value individuality and experience

Boomers are more focused on emotions and feelings than generations before them

Boomers dislikes being called “Seniors”, despite the invitations to join the AARP that are arriving in the mail

Only in adulthood have Boomers valued income and family

In their youth, they were more free-spirited

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BAN

KING

- BEHA

VIOR

Seniors are more comfortable dealing with people when they bank

Seniors considers the bank as an advocate

Seniors don’t bother with mail-in rebates/coupons

Boomers like to shop around before making a decision

Boomers are not brand loyal or price sensitive

Seniors & Boomers use their family/friends, as well as bank branches for sources of influence rather than call centers and websites

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BAN

KING

- SENIO

RS Very low median level of income ($48,131)

Online financial activity – Extremely Low– Banking online (13%)– Buying investments online (4%)– Researching financial products online (6%)– Applying for financial products online (3%)

One in Seven have a CD

Less than 15% have HELOC/Home Loan

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BAN

KING

- BOO

MERS

Highest median level of income ($67,688)

Online financial activity - Low– Banking online (31%)– Buying investments online (7%)– Researching financial products online (19%)– Applying for financial products online (9%)

One in Eight have a CD

26% have HELOC/Home Loan

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BAN

KING

- LOYA

LTY


2/3 of Seniors are defecting to competitors

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BAN

KING

- CROSS-SELLIN

G


1/4 of Boomers are open to cross-shopping

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MA

RKETING

- SENIO

RS (G.I. &

SILENT)

The only two living generations whose core values and beliefs are similar enough that they are usually considered a single market - Matures/Seniors

More spending power than prior generations that have occupied their current age bracket (Social Security)

They spend more and very receptive to trying new products and services

They’re more willing to switch brands

Seniors have time to read a longer message (i.e. Direct Mail)

Connect with grandchildren, patriotism, community

Seniors and Boomers are receptive to trying new brands and products

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MA

RKETING

- BOO

MERS

Receiving the largest transfer of wealth in human history

Have also been very successful – Disproportionate wealth

They’re squeezed - both in time and money (seniors/children)

Receptive to changing brands and trying new products and services

Not brand loyal!

Boomers are skeptical, opinionated and selfish

They like results… not promises

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RECOM

MEN

DA

TION

S Phase 2 – Primary research with existing & potential consumers from all three generations

– Re-evaluate bank branches, call centers and websites– Create awareness and positive opinion to engage and inspire acquisitions – Establishing a loyalty program – Developing better cross-shopping opportunities

Phase 3 – Develop Consumer Segmentation Strategy

Documents

Consumer Segmentation