What is Generational Marketing and Why It’s Important

What is Generational Marketing and Why It’s Important
02 July, 2024 • ... • 50 views
Alexey Baguzin
by Alexey Baguzin

When planning marketing campaigns, you should always keep your target audience in mind. Who they are, what they do, what makes them tick. Such an analysis allows you to create an ideal buyer persona, i.e. your average customer’s portrait. A lot of criteria can go into it: someone’s occupation, average salary, shopping habits — and even age. Retired folks’ desires are generally quite different from their 20-something offshoots.

Segmenting your target audience by age can be done in several ways. One of these is called generational segmentation. Generational marketing is based on such segmentation. In this article, we’ll explain what generational marketing is, which generations exist, which habits they have, and how you can influence their buying decisions. Strap in.

What is generational marketing?

It’s a way of appealing to people of different ages, in short. Putting people in one generational bracket or another depends on when (roughly) they were born. Or rather, which historical period they were born into.

Generational marketing allows you to understand better how you can serve your customers — or how you can appeal to your prospects. It’s different from the usual age segmentation because the cohorts you get when segmenting by age are usually smaller and might not capture how a certain historical period influenced people’s buying behavior.

By applying generational marketing principles you’ll usually get only four groups: Baby Boomers, Generation X, Generation Y (Millennials) and Generation Z (Zoomers). We discuss those below in detail.

Baby Boomers (1946-1964)

Characteristics

Baby Boomers are the post-war generation, typically born between the mid-40s and the 60s of the last century. Here are some of their typical attributes:

Not only do the Boomers hold the purse strings, they also spend the money freely. Given their age, most Boomers do not have mortgages to pay off or college tuition fees to cover (for themselves or their children).

You might think it makes them the generation to spend the most on luxury goods. After all, if you have the money and no substantial financial obligations, why not treat yourself? And that’s where you’ll be wrong.

Almost 50% of all money spent on luxury goods is spent by Millennials (Gen Y). In fact, Baby Boomers are dead-last, at just 11%. Ouch. We hate to break that particular marketing myth.

Marketing tactics

Several of the tactics we can advise on when marketing to baby Boomers are directly linked to which characteristics set them aside.

The most obvious one is ads on Facebook. With so many Boomers on the platform, this is self-explanatory. 

Email marketing is another good solution. Marigold reported that 6 out of 10 Boomers have bought something from an email in 2022. 

You can leverage Boomers’ brand loyalty to tap into their spending power. They appreciate loyalty points and discounts — and are unlikely to switch brands they have been loyal to for a while.

Finally, try to tie cashback into your offer. Almost half of Boomers rely on credit cards: coupled with their brand loyalty, it’s a great method of combining their preferences with your business goals.

Given the Baby Boomers are more tech-savvy than you’d think, tap into their digital habits. T-Mobile handles it well with their campaign. They market a bunch of special plans for people aged 55+ — but make them feel special instead of feeling old.

T-Mobile offer three plans aimed at senior citizens (55+ years): for $30, $55 and $65 a month
T-Mobile’s marketing campaign for Baby Boomers — which also clearly demonstrates why they should be picked over AT&T and Verizon. Source: T-Mobile

Generation X (1965-1980)

Characteristics

The smallest generation of the lot. Gen Xers are caught in between Boomers and Millennials when it comes to net worth — this means they are far enough in their respective careers to earn a lot, but also quite removed from retirement age to have much in savings.

The Xers age bracket — 44 to 59 — means they are caught in the middle of life’s heavy responsibilities. Xers have to cater to their children’s needs — and also support their elderly parents.

They were also caught hard by the house market crash in the 2000s, although they did recover financially much better than other generations. One would think the recession would mean Xers set the bar when it comes to money management, but, interestingly, they were the highest-spending generation in 2022.

Gen Xers are tech-savvy: 90% own a smartphone, 91% use the internet, 74% use Facebook. We also know Xers are nostalgic: 3 in 4 use YouTube to watch past events.

Three types of Coca-Cola cans which went into circulation after appearing on Stranger Things
Coca-Cola’s media went up a massive $1.2B after the brand appeared on Stranger Things, a show about kids in the 80s. Source: Yahoo

Marketing tactics

Given their towering presence on the internet (Facebook and YouTube in particular) — and Xers being tech-savvy in general — digital marketing works quite well on Generation X. YouTube and Facebook content geared towards nostalgia and authenticity should serve you well.

However, more conventional marketing techniques — TV ads, word-of-mouth, and simply walking through a retail store — are also quite popular among Xers. In fact, finding a product in a brick-and-mortar store just edges out finding one through the internet.

A bar graph showing the most popular ways Gen X discover new products with retail stores (43%), social media (42%) and TV ads (41%) being the top-3 channels
How Gen Xers discover new products. Source: HubSpot

Email marketing is another way to make Xers part with their hard-earned money. Looks like they are even more likely to shop via email content than Boomers — so here’s another avenue you can use.

Gen Xers also lead the way when it comes to loyalty programs. They are more likely to choose a brand with a dedicated loyalty program than Millennials and Boomers.

Generation Y, aka Millennials (1981-1996)

Characteristics

Millennials have now become the largest generation in history, leaving baby Boomers behind. However, what Millennials make up in numbers, they lack in assets: Gen Y holds under 10% of the nation’s wealth. Surprisingly, their annual spending in 2022 was second to only Gen Xers. This might be explained by their love to splurge on luxury goods — they account for 50% of such sales.

Millennials grew up with modern technology, which Xers and Boomers merely adopted with varying degrees of success. Social media channels, search engines and YouTube ads are the top-3 ways Millennials discover products.

However, this is where things get interesting: despite finding products online, in-store shopping still leads the way when it comes to making a purchase: 65% favor shopping in brick-and-mortar stores.

Companies being socially active matters to a large chunk (41%) of Millennials. They will go with brands willing to take a stance on social issues, they will support small businesses and they value diversity and inclusion when making purchasing decisions.

Marketing tactics

Much like Xers and Boomers, Millennials love loyalty programs. They might not be the first when it comes to entering multiple programs, but they are top dogs when it comes to choosing premium programs and redeeming loyalty points.

Millennials use social media a lot (Facebook, YouTube and Instagram lead the way): at least 2 hours a day. So it stands to reason this is where they discover products — and even buy them. Feed posts, especially from influencers, might mean Millennials go directly to in-app stores — or at least contact your sales team using direct messages. So partner up with influencers and try to reach Millennials via user-generated content.

Woman in her underwear taking a selfie as part of Aerie’s body positivity campaign
Aerie, a clothing brand, has an ongoing Instagram campaign focused on body positivity — perfect example of going viral via UGC content. Source: Instagram

Product reviews come in third — after quality and price — when Millennials make purchasing decisions. Try and marry that idea with their love for leaving reviews: offer incentives and bonuses if they visit your website and leave a review. These might come in the shape of in-store discounts or additional loyalty points.

Generation Z (1997-2012)

Characteristics

Gen Zers (aka Zoomers) are similar in size to Millennials: each group accounts for roughly 20% of the US population. Around half of Zers are entering workforce years and the numbers for annual household income reflect that: $40,000 per family is the average for a 25-year-old Gen Z specimen. However, Gen Z’s net worth is tiny compared to other generations — which is one of the reasons they are thrifty and do not contribute nearly as much to annual spending.

Gen Zers are the most tech-savvy of all generations too: they were born after the internet was invented and smartphones were in full swing when Zoomers hit their teenage years. Zers are very similar to Millennials in that they prefer to discover products through social media, with YouTube Ads in second and internet searches in third.

They are also embracing companies with firm stances on social issues — 50% of all Zoomers find it important. Where they differ slightly from Millennials are in causes — quality and price aside — which shape their buying decisions:

  • Companies treating employees well is the number one reason to purchase from it.
  • Data security is behind by a solitary percent.
  • Charitable causes and environmental footprint round off the quartet.
Graph showing most important purchasing factors for Gen Z with “Treat their employees well”, “They trust with their data” and “Donate a portion of their profits to charity” being the top-3
Factors that Generation Z lean on when making buying decisions. Source: HubSpot

Finally, a word on loyalty programs: Gen Z don’t trust those as much no more, their participation is dwindling, and the need for instant gratification is key to that: they want to earn points for every action they take.

Marketing tactics

The first thing to do, given Zoomers’ online presence, would be to optimize their shopping experience on mobile. An app, or a browser-friendly version of your website will do the trick.

Secondly, Gen Z crave personalized experiences more than any other generation — but at the same time think brands don’t do that well. Happy Zoomers will readily recommend your business to their friends — so tap into authentic messaging and Gen Z’s beliefs as much as you can.

Leverage short-form social media — YouTube, Instagram, TikTok and Snapchat are all ahead of Facebook and Twitter — some by a hefty margin. This, among other things, points to a short attention span among Gen Z: you have only 8 seconds to grab their attention! For comparison’s sake, a goldfish has an attention span of 9 seconds.

Finally, make an extra effort to offer Gen Z bang for their buck: some are not even working yet, while those that do have shifted towards a hybrid work environment, or fully-remote gigs — not the most stable sources of income. Which leaves little room for second chances.

Potential challenges of generational marketing

Before we wrap things up, there are some important caveats you should keep in mind when applying generational marketing.

Firstly, while some generations have defining traits, which other generations do not share (e.g. spending on luxury goods), most other traits are much less pronounced. Sure, Gen Z seeks out personalized experiences more than Gen X — but by a mere 4%. Yes, Millennials are most likely to shop in-store — but the least likely to do so (Zoomers) lag behind by just 10%. It’s a percentage game

Secondly, generational marketing can lead to stereotypical thinking, such as “young people only care about social media trends”. Avoid such generalizations when coming to conclusions about your target audience. Not all young people are influenced by social media — just like not all senior folks scoff at digital advertising.

Thirdly, generational marketing is a good baseline to determine some qualities of your target audience — and some methods to earn their trust — but it should be used in conjunction with other parameters. Otherwise, you will only get a partial picture of your (prospective) customers and will risk falling into stereotypical thinking. See above.

Finally, if your product is suitable for all age groups — let’s say you sell musical instruments — then generational marketing can give you an, ahem, general direction, but won’t be as effective. Anyone can play a musical instrument, from very young to very old.

Final thoughts

While it might be tempting to think that a completely unique approach can be used for each generation to produce stunning results, the truth is more nuanced. A lot of marketing tactics you use for one generation will work for another. Maybe not as well, but the difference will be negligible. 

Above all, don’t make far-reaching assumptions without thoroughly examining your target audience first. Otherwise you can end up with a perfectly reasonable explanation as to why Boomers are likely to spend a lot of money on luxury goods — and your marketing campaign based on that assumption will backfire spectacularly.

02 July, 2024
Article by
Alexey Baguzin
Alex has an master's in Journalism, a keen interest in eCommerce & email marketing and a background of writing articles dating back to 2015. He reads about copywriting in his spare time, watches Netflix and supports Arsenal. He's into rock of all sorts - most recently Muse.
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