The SYKES EMEA Team
Getting older is a fact of life. Every morning, when we get out of bed we are, inevitably, a day older.
It’s an issue that is, or should be, of importance to customer service departments, because it’s not just about us as individuals, it’s about how CX excellence is provided across the generations.
In Europe, a 2018 EU study estimated that Europe’s Silver Economy (the 50-plus age group) will expand by some 5% per year up to 2025, reaching €5.7 trillion. If ranked among sovereign nations, the European Silver Economy is the third largest economy in the world, behind only the USA and China.
Backing that up, a report by the International Longevity Centre – a UK think tank on the impact of longevity on society – predicts that the next decades will see huge growth in consumption by older people. Not only will there be more seniors, they tend to spend more.
The report predicts that spending by consumers over 50-years-old will rise from 54% of total consumer spending in 2018 to 63% by 2040, with the top three growing sectors being recreation and culture, transport, and household goods and services.
In other words, older consumers should be a demographic coveted by CX professionals. Not only do they tend to be more loyal to brands, they often have more disposable income than younger people.
But, despite acknowledging the importance of more mature customers, too many companies assume that their customers are roughly the same, and that the customer support they may require should also be the same. Or worse, consciously or unconsciously, they focus on younger age groups.
Simply, the importance of the Silver Economy isn’t fully recognised by all companies, particularly by disrupter companies using digital technologies to reshape the future of business.
A perfect example is Financial Technology (FinTech), a relatively new sector that is rewriting what a bank should look like. FinTech companies offer the same mix of services as a bricks-and-mortar bank, but without the bricks or the mortar.
However, conventional thinking goes, if you’ve banked with the same bank for decades, you’re unlikely to change for an unconventional digital start-up, so an older demographic is not a core market.
Wrong, according to an article in FinTech Futures: older demographics can be persuaded to move to a digital bank. While there will be those who are less comfortable with technology, many 50-plus consumers are not only early adopters of technology, they were the inventors of it.
At present, FinTech usage is highest among millennials, with a global average adoption rate of 48% among 25 to 34-year-olds, according to Ernst & Young, with that adoption rate falling progressively to 22% for those aged 55 to 64.
It’s therefore unsurprising that FinTech companies have primarily targeted younger age groups because they are the ones who have grown up with digital technology, understand it – and, importantly, trust it.
However, some FinTech companies are making inroads into older age groups by, for example, addressing concerns about fraud and offering retirement planning. As important, they’re making everything intuitive and easy to understand.
But making a product or service attractive to older age groups is also about perception. A UK study by Gransnet and Mumsnet found that 78% of those aged 50 or over feel under-represented or misrepresented by advertising.
Moreover, 49% said they actively avoid brands which ignore them, while 69% said they would be more receptive to brands if their advertising represented the over-50s more accurately. The same disconnect is likely to be true, to varying degrees, across Europe.
The issue of selling to, and supporting, an older demographic may all seem a little academic, but it’s not. The International Longevity Centre report says that tackling barriers to spending by people aged 75 and over by 2025, could add 2% to GDP a year by 2040.
Also, if companies better supported those aged 75 and over to match the spending of 65 to 74-year-olds by 2025, that could add 8% a year to GDP by 2040.
The big lesson for companies, advertisers, and marketers, is to better recognise the importance of the Silver Economy and develop marketing and sales strategies that are relevant to it.
For customer service departments, it means understanding every customer demographic better, identifying pain points, keeping things relevant and simple, and providing customer support services that best deliver CX excellence for every individual, silver or otherwise.