The Age Curve

How to Profit from the Coming Demographic Storm

The Age Curve

Author: Kenneth W. Gronbach
Pub Date: June 2008
Print Edition: $19.95
Print ISBN: 9780814417942
Page Count: 288
Format: Paper or Softback
e-Book ISBN: 9780814410172

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Excerpt

INTRODUCTION

There are sick empty feelings in your stomach, and then there are really big sick empty feelings. I had the latter. Our signature account of eight years, American Honda Motorcycle, had shipped the year’s allotment of new 1986 bikes to the dealers two months earlier and a unique thing happened: nothing.

Our history with Honda had been nothing but successful up to this point. The formula was simple: Honda sent the bikes from Japan to a New Jersey warehouse, where they were distributed to the Northeast regional dealers, who prepped them and displayed them on showroom floors. As soon as they were displayed at the dealerships, the marketing and advertising kicked in and the customers bought them—all of them. Life was good.

But this was 1986 and the bikes did not sell. It wasn’t that traffic was slow. There was no traffic. The folks at Honda asked, “Did you run the ads?”

This is when the really big sick empty feeling kicked in. The bad news was that sales volume was dropping like a stone. The really bad news was that sales would continue to drop for the next six years until the decline amounted to an 80 percent free fall. Gulp. By 1992 most of the dealerships were ready to close, and we lost the account. No surprise there. The only consolation was that exactly the same thing happened to Yamaha, Suzuki, and Kawasaki. Someone had turned off the faucet and we didn’t know who or why.

In mid-October 1996 I was reading the Hartford Courant’s editorial section. The Hartford Courant is America’s oldest newspaper in continuous publication. It devoted a full page to a sweeping indictment of Generation X and its noninvolvement in the political process. Bill Clinton was about to trounce Bob Dole. It seemed that the Xers (born between 1965 and 1984) did not vote or donate its resources at the same level the Boomers did (born between 1945 and 1964) when they first got involved in politics.

The implied laziness part bothered me. We had thirty Xers working at our agency at the time, and none were lazy. I asked our research department to review the voting habits of Generation X. Our research department checked. All the factors seemed equal on a per capita basis. Xers did vote. They did contribute to their political parties and they did participate in government. There were just fewer of them. In other words, the young Generation X voters actually cast fewer votes than the young Boomers when they were the same age not because they were lazy but because they were simply a smaller group.

Was this simple difference in the size of the Boomer generation and Generation X the answer to the motorcycle mystery? I reviewed U.S. Census Bureau data to find out, and indeed there were a lot fewer of them—11 percent fewer. There were 78 million Boomers and only 69 million Xers.

That moment of recognition changed my thinking from that point forward. Large and small generations, alternately moving and aging through the marketplace, determine many a company’s success or failure. That moment changed the way I counsel my client companies. It spawned the shape of my public presentations. It gave birth to this book.

The core idea of this book is quite simple: Smaller generations buy less stuff; larger generations buy more stuff. When a large generation, such as the Boomers, leaves the market and is replaced by a smaller generation, such as Gen Xers, sales are going to drop. Please excuse the fact that I repeat this premise throughout my book, but I have found that people (executives, entrepreneurs, salespeople, marketers, advertisers, etc.) just don’t accept this clear-cut concept until you beat them over the head with it. My intention is to show how the simple idea of generational size applies to an ever-widening variety of areas and convince readers to recognize it, believe it, and, most important, put it to use.

—Kenneth W. Gronbach

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