Tuesday, September 4, 2012

Marketing Software to Retirees

Twenty-eight percent of people who are 67 and older use eReaders to read books. So says Harris Interactive, as reported in the June/July 2012 issue of AARP Magazine, the magazine of the American Association of Retired Persons.

Based upon the current state of the book publishing industry, I wouldn't have guessed that 28 percent of many demographic groups read books in any format. But more significantly, the survey points out that retired people are comfortable using technology. And that's a software marketing message that software developers shouldn't ignore.

Seniors, software, email, and texting

The same issue of AARP Magazine talks about the results of the Connecting Generations survey and focus group conducted jointly by AARP and Microsoft. When asked to choose between email and texting as the best way to connect with other people, 60 percent chose email and 19 percent chose texting.

I wasn't surprised that seniors prefer email three-to-one over texting. But I was a bit surprised that nearly 80 percent of people in their sixties and seventies use computers or smartphones to communicate with friends and family. This, too, delivers a marketing message for software developers: Don't ignore the Baby Boomers and the Silent Generation when you're making your marketing plans.

Retirees and demography

In his book "The Age Curve - How to Profit from the Coming Demographic Storm," Kenneth W. Gronbach talks about the buying patterns of the Silent Generation (the 52.5 million Americans who were born between 1925 and 1944) and the Baby Boomers (the 78.2 million Americans born between 1945 and 1964). Gronbach believes that the significant changes that we have seen - and will continue to see in the future - in economics, business, and society are caused in large part by the size of successive US generations, and the corresponding number of consumers in each age group.
Gronbach recognizes that his theory simplifies a particularly complex subject. Still, he makes a convincing argument for the relationship between demographic changes and the rise and fall of specific firms and market trends. Software developers need to focus their efforts on immediate marketing challenges, of course. But trends are also important.

The Silent Generation was smaller than the GI Generation that came before it. As the Silent Generation replaced the GI Generation, there was less consumption, and less competition for jobs. If you consider the low birthrate and the small number of immigrants coming to America between 1925 and 1944, Gronbach explains, you'll understand why it becomes difficult to make money marketing to the Silent Generation using the model used to sell goods and services to the previous generation.

Boomers and software sales

By contrast, the Boomer generation is huge. Gronbach describes Baby Boomers as people who don't save money, and who don't spend their money particularly wisely. Boomers spend a lot of money on their kids and grandchildren. They will continue to inherit money that they will continue to spend badly. And they refuse to grow old.
Boomers will buy any product or service that will keep them young, Gronbach advises. He regards Boomers as the greatest marketing force that could happen to an economy. If he were talking about the software development industry, I believe Gronbach would tell us that Baby Boomers are a good market for educational software for their grandchildren. And they're people who will buy games for themselves, as well as software that will help them manage their music and movie collections.

Buying in retail stores

Paco Underhill wrote "Why We Buy - The Science of Shopping." The book describes how consumers purchase items in retail stores. The lessons that Underhill teaches us apply to buying computer and smartphone software on the Internet, too.

Tiny changes to a store's layout, Underhill tells us, can make enormous differences at the cash register. Altering signs in retail stores can increase or decrease product sales. The same principles apply to software developers' online sales presentations, too.

For example, Underhill was hired by a dog food maker to determine how to increase sales. He discovered that mom buys most of the dog food. But dog treats aren't purchased by moms. They're bought by children and grandparents.

Dog food is often stored on high shelves, where most adults can easily reach it. The two groups of supermarket shoppers who can't reach it - seniors and children - can't deal with high shelves. By convincing supermarket managers to move dog treats where kids and grandmothers could reach them, the dog food company immediately increased sales.

How people buy software

That's what independent software vendors (ISVs) need to do, too. Take the time to learn how people buy your software. Make it easier and more attractive for people to buy more of your applications.

If you're marketing products in a store, Underhill tells us, make the signs big enough to be read by prospects with bad eyesight. Underhill mentions that Eckerd's stores in Florida placed magnifying glasses on chains, attached to the shelves.

Software developers who market their applications online need to avoid using tiny type. And I'm sure Underhill would tell microISVs not to use fonts whose sizes are fixed by the web designers. Let seniors and retirees with poor eyesight use their web browsers to select larger font sizes.

Education and software sales messages

Underhill's studies have discovered that the better educated and more affluent a buyer is, the more likely it is that that consumer will want to read what's written on labels, boxes, and jars. Perhaps the lesson for software developers is to make sure that they have an attractive end-user license agreement (EULA) in their applications, and on their websites.

Another interesting discovery that Underhill discusses is that older customers prefer to receive advice and instructions from somebody in their own age group. Retirees don't like to be told how to do things by youngsters. It's not obvious how software publishers can address this concern online. But the ISV who figures it out is going to sell more software.

The bottom line

Don't assume that retirees are technology-averse people who are sitting by themselves listening to their eight-track tapes and watching Betamax movies. Boomers and the Silent Generation represent a huge market for your software. It's worth the effort to learn to market to them. It's good software marketing.

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