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The aging adult consumer population offers limitless opportunities for technology companies. The number of people aged 60 and over is expect to double from 2019 to 2050. And in the US, the aging population is expected to become the most important driver of consumer spending growth in the coming years, with 70% of all available U.S. income being held by those older than 55.
Yet many companies struggle to reach this high-potential group, often taking a one-size-fits-all approach for an incredibly diverse population. My company, Honor Technology, primarily works with individuals over the age of 65. Since our founding nearly eight years ago, we have successfully tapped into the aging market to become the largest home care network.
So, what have we discovered as the secret to successfully engaging aging adults? Deliver deeply personalized experiences through the use of data.
Contents
What you need to know about the senior market
Many companies have tried to reach the aging adult population, but have failed. That’s often because products, services, and marketing tend to take a universal and often over-simplistic approach to engaging the senior market. Still, older adults are one of the most heterogeneous and complex groups out there. A 72-year-old may be retired, have dementia, and live in an assisted living facility. But another 72-year-old could work, run marathons and travel the world. If brands don’t take into account all the differences that exist within the aging adult population, many seniors will think, “This product is not for someone like me.”
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Another nuance worth noting is that seniors have fairly established preferences. They know what they like and don’t want to deviate from the experiences (and brands) that have worked for them in the past. Research on personality development has found that a person’s openness to changing their preferences increases in their 20s and declines steadily with age. No wonder seniors tend to prefer to shop in person or talking to customer representatives over the phone — it allows them to find goods and specify services that meet their individual needs.
At the heart of the challenge for brands that appeal to older adults is this: While there is significant heterogeneity when it comes to what a “senior” looks like, the aging adult population also has deep-seated preferences. While audience segmentation could work, it just isn’t sustainable or specific enough to succeed at scale. One way or another, brands have to consider each senior’s individual preferences and meet a wide range of expectations.
So what does success in seniors look like?
To reach the aging adult population, business leaders need to invest in deeper data collection and management, and may even use AI technologies to better understand people’s motivations and behavior patterns. By embracing personalization, brands can overcome the challenge of targeting a diverse yet highly specific market by providing each senior with tailored recommendations, content, offers and experiences.
Better personalization is made possible by embracing data and learning technologies. These technologies can help companies identify customer patterns and ultimately enable them to improve their products and services. Machine learning can observe a customer’s preferences over time while leveraging similar user profiles to deliver highly personalized and unique experiences.
Advertising and marketing technology was one of the first industries to broadly adopt personalization by targeting ads to users most likely to enjoy a product or service. In addition to marketing applications, personalization can be used to streamline or add value to many products and services.
For example, consider a voice assistant device that can learn to recognize a senior’s voice, observe how long it takes that person to respond to the device, and remember their most frequently asked questions. Over time, the speech device can adapt to that senior’s habits: responding only to their voice, listening for as long as it takes to respond, and providing answers without being asked (like the daily weather forecast).
The dos (and don’ts) of personalization
Great products are defined by the impact they have on users’ lives, and this should be the North Star for any personalization use. Once you’ve determined that personalization adds value to your product or service, identify the breadth and depth of data you need to form AI-driven insights. These insights will never be perfect, but they can provide actionable recommendations for product optimization. Rapid iteration testing and detailed user research are particularly useful for collecting user data, and scalable data architecture can help provide dynamic insights to inform product customizations.
Personalization also requires a constant “build vs. buy” evaluation when it comes to your data collection and management capabilities. Some brands choose to partner with a customer data platform (CDP) or data management platform (DMP) to secure customer information, but the value of outsourcing these capabilities is highly unique to each organization’s lifecycle, industry, and personalization application. While building certain features in-house can be costly and time-consuming, it can be rewarding to maintain control over your product’s core components and technical stack and protect sensitive user data.
Continuous optimization and close human oversight are key to ensuring you have the insights at your fingertips to make accurate customer recommendations. Let’s face it – there’s nothing more frustrating than being on the receiving end of incorrect personalization. Have you ever had someone use your Amazon account and then received endless targeted recommendations for products you’re not interested in? If your personalization efforts aren’t 100% right, they’re 100% wrong. That’s why personalization is extremely hard to get right, so the key is to figure out how much you can to get it right and how much value it adds.
Above all, be curious and investigate the ‘why’. Of course, personalization is valuable in its own right, but it’s even more useful to take these insights a step further. Why do seniors have the preferences they have? Who else shares the same preferences and what other similarities do they have? How can I use this knowledge to improve the overall customer experience? Thinking critically about the “why” allows you to evolve over time and remain flexible in a constantly changing market.
Reach new heights by attracting older consumers
While many tech companies are looking to younger generations to drive consumer growth, I urge you not to forget our older adults and those who will soon enter that demographic. This fast-growing group may be hard to appeal to, but when done right, it pays off in dividends.
With personalization enabled by high-quality data, deep learning opportunities and human expertise, companies can successfully tap into the aging adult population. We’ve done it – now it’s time for more organizations to rise to the challenge.
Seth Sternberg is CEO of Honor Technology.
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