"Two customers can look almost identical on paper but respond differently to messages, make different decisions and ultimately want different products."
- Laura Ashforth - Lateral
I recently attended the Silver Marketing Association Summit where one message came up repeatedly: the over-50s should not be treated as one audience.
Most of the time, financial services businesses group millions of people together on the basis of age. Yet anyone working in marketing knows that two people the same age may have very little in common. Life stage, health, work, family, aspirations and mindset often tell us far more than chronological age ever could.
Age has always been an incredibly useful way of understanding large customer groups, due to its simplicity and objectivity, which is why it continues to play such an important role in pricing, communications and distribution strategy. But when we think about building products for later life, I increasingly wonder whether we've allowed age to become a substitute for understanding the customer behind it.
Over the last two years building Lateral, I've spent a lot of time speaking to people in their sixties and seventies. What has struck me is not how similar these individuals are, but how different they can be. Some are still running businesses, travelling extensively and training for endurance events. Others have retired earlier than planned because of ill health or are currently acting as full-time carers for loved ones.
They may be exactly the same age, but their priorities, expectations and the role they want insurance to play in their lives are fundamentally different. Retirement is also not a single, clearly defined event. For many people, it is a journey that spans thirty years or more, with needs that change significantly along the way.
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Marketers know that demographics alone rarely explain what people want and instead use personas to segment their audience based on rich behavioural data from multiple sources. I believe financial services have an opportunity to apply the same thinking. Two customers can look almost identical on paper but respond differently to messages, make different decisions and ultimately want different products.
Rather than asking, "How old is this customer?" I think we should start asking, "What stage of life are they in?" and factoring the answers into product design. Yet many financial services products still assume customers' wants and needs become broadly similar once they reach a certain age.
In reality, the opposite is often true. The further people move through later life, the more their lives and lifestyles diverge. Decades of different health behaviours, family circumstances, careers and financial priorities create increasingly different requirements.
There is an exciting opportunity ahead for financial service firms to genuinely understand the different stages of later life, allowing them to build products and services that reflect how their customers actually live, rather than how old they happen to be.
