When it comes to marketing, messaging, targeting, or selling new homes and new home communities, are generational labels helpful? Or are they misleading?
These labels–Baby Boom, Generation X, and Millennials, in particular–enjoy almost universal currency, especially so in the marketing of consumer products and services. Still, are they a myth, perpetrated by marketing consultancies, or rather, a customer segmentation filter through which marketers of homes and channel and deploy planning, design, and marketing resources more effectively and efficiently?
Answering this question correctly may make the difference between surviving, thriving, or dying in the next stretch of housing’s zig-zag pathway to new normalcy. Seventy-five million plus of these, and 75 million plus of those, and you’re either talking about real, pent-up demand, or a big hurt of wasted time, money, and land.
Here’s a view on that question, from Harvard Business Review commentator and Ivey Business School, Canada marketing professor Niraj Dawar, that’s right for all the wrong reasons.
What Dawar proposes is a common sense view of generational descriptions that most home builders operate by implicitly, which is that an individual or couple makes the decision to buy a new home motivated buy values, preferences, attitudes and means that have little or nothing to do with the cohort from which he or she or they hail.
His misunderstanding of the actual terms, their origination, and their first application to marketing challenges is surprising, coming from a marketing professor. In making his points, he notes that it’s often more helpful for marketers to use a 10-year age period–people in their 30s–to describe their behavior, than to refer to them according to the common generational label, leading edge Millennials and trailing-edge GenXers.
The grand conclusion is always that these distinct demographic segments define generation-specific consumption patterns that marketers ignore at their peril. Gen Xers, born between the mid-1960s and 1980s, are the successor generation to Boomers, born between the end of World War II and the mid-1960s, and each successive generation takes up about 20 years. The contention is that each generation has a set of defining experiences that have shaped it and that in turn shape them as consumers. This segmentation scheme is perhaps marketers’ most successful product. And it is, unfortunately, mostly nonsense.
Who wouldn’t agree with that? However, the fundamental mistake Dawar makes in his analysis is conflating the demography into psychographics, an albeit common error. Demography simply refers to people and household patterns. The Baby Boom, was originally just that, a post-World War II increase in birth rates that extended approximately two decades.
Generation X, some of us are old enough to remember, was originally simply referred to as the Baby Bust generation, and it was sandwiched demographically between two much larger and longer-lasting generational waves. The reason, again, it got its original demographic label was birth rate.
Only as those individuals–born in the latter 1960s into the late 1970s–grew into late-teenage-early-young-adulthood–did they get their more psychographic label, Generation X, thanks to the work of Douglas Coupland. Couldn’t very well call them Latch-Key Kids all their lives, now, could we?
Fact is, demographically, high-birth rates in the post-World War II decades from the mid-’40s to the mid-1960s, accounted for an economic turbocharge the likes of which we’d never seen before, and never will again. Don’t forget the other macro trend that will never occur again, and that is that single-income households became–to a significant degree–dual-income households for the first time ever as those high-birth-rate babies came of age into adulthood.
Economic impact, including what sold and what didn’t sell, had a lot more to do with the sheer population and household formation, job and income formation, and family formation growth than it did with Me-Generation psychographics playing out in branding and marketing.
The issue is this. Dawar has difficulty connecting the dots between demographics and economic and market influence, because he’s confusing a term meant to apply to a measure of population size and household formation patterns, with behavioral and attitudinal traits. That’s psychographics, not demographics. So, he, like many of us, fall for a ploy that gives psychographic meaning to the generational reference. Then he shoots holes in the theories that psychographic traits–preferences, behaviors, attitudes, and values–apply to those references.
Dawar inadvertently puts his finger on another, perhaps more helpful and important point here, which is the fallacy of using a single dominant label to describe identity, any identity. With finite resources to put to marketing and sales support efforts, the tendency is to chip away at characteristics in hopes of a grail-like common denominator trait that will apply across a swath of people.
New York Times columnist David Brooks writes:
The only way out of this mess is to continually remind ourselves that each human is a conglomeration of identities: ethnic, racial, professional, geographic, religious and so on. Even each identity itself is not one thing but a tradition of debate about the meaning of that identity. Furthermore, the dignity of each person is not found in the racial or ethnic category that each has inherited, but in the moral commitments that each individual has chosen and lived out.
Demographics is not dead. It’s simply not the silver bullet we sometimes expect it to be. Nor is psychographics dead. And some day, Big Data, will be seen for what it is, just another crude tool marketers can put to some use in finding, securing a relationship with, and sustaining a profitable tie with customers.
