The Baby Boomer generation are renowned for holding the majority of the UK’s personal wealth. After all, they account for nearly half of all UK consumer spending. So it’s not a surprise that UK businesses could be missing out on billions of revenue by prioritising younger generations instead.
Business in Briton could be losing out on up to £27 billion by targeting the Millennial market over Baby Boomers, despite nearly two thirds (63%) of business leaders choosing to focus their efforts on a younger demographic who continue to remain worse off.
The Institute of Customer Service (ICS) said that the bias means that organisations are potentially missing out on a large proportion of the ‘silver pound’ economy, which is shown to be worth up to £43 billion in annual spending.
If businesses had a greater focus on the older market, it would be more lucrative for organisations across a number of business sectors.
This is shown most overtly in the utilities market, where baby boomers outspend Millennials by £4.3 billion each year (£12.2 billion vs £7.9 billion), in the travel sector where the difference is £2.2 billion (£10.6 billion vs £8.4 billion), and in the insurance market (£6.8 billion vs £6 billion).
But businesses have a long way to go to meet the needs of Baby Boomers.
As little as 7% believe that customer service is ‘geared towards people of my age’, whilst nearly half (49%) those aged 50 and over claim they have stopped buying products or services because of bad service.
When it comes to factors influencing their spending, both Millennials, people born between 1980 and 2000 and Baby Boomers, born between 1946 and 1964, are driven by trust (53% and 55%, respectively) and are equally likely to purchase based on recommendation (both 27%).
Both generations place high importance on clear and effective communication from staff and good complaint handling, and equal emphasis on courteousness and respect for customers. However, Baby Boomer spending is significantly swayed by excellent service, with 48% citing this as the most important factor influencing their spending, compared to just 24% of Millennials.
Jo Causon, CEO of ICS said Causon said: “Businesses may think that Millennials and Baby Boomers value different things, but the reality is that they share similar desires; the difference is that they want them delivered in different ways.
“This is where investment from businesses must come – ensuring both Baby Boomers and Millennials receive excellent service in the channels that they want. If businesses needed to focus resource on one mode of communication, web based interaction is an expectation for both demographics.”
Importance of communication
Baby Boomers expect to be able to contact companies through telephone (84%) or face to face contact (55%), with little expectation to make contact through apps (6%) and social media (8%).
Younger generations prefer a multi-channel approach, with an increasing number expect to contact businesses through all modes of communication. Despite this, only 30% of business leaders have not considered providing different styles of customer service to different ages.
Even though half of business leaders are planning on increasing customer service spend and invest in customer service as a priority, only 7% see it as integral to the growth of their business and economy.
Ms Causon added: “Baby Boomers are sending out a clear message to British boardrooms. They will spend money if service standards are improved and if they believe that they matter to an organisation.
“It means that focusing on skills development to ensure excellent communication and a personalised service will help secure the loyalty and business of both demographics. Ensuring service is up to scratch across all channels will reap the rewards of the added silver pound.”