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Free Advice: Don't Forget to Target Older Customers

Sometimes it pays to listen to your elders – even in the youth-focused mobile phone industry: The quiet yet sustained message coming from America’s older folks is, “We’re here, and our numbers are growing.”

Those aren’t just empty words, either. In the 2000 U.S. Census, Baby Boomers (those born between 1946 and 1964) fueled the largest percentage gain in the U.S. population -- a 55 percent increase in the number of 50- to 54-year-olds. The second fastest growing group consisted of people between the ages of 45 and 49. Furthermore, people 65-and-older represented just over 12 percent of the population in that same Census, but that age group will grow to be 20 percent of the population by 2030.

The Aging-Boomer Bubble

The aging Boomer bubble is apparent in NPD’s own data, too. The two largest age cohorts in our survey of mobile phone buyers – those 18 to 24 years old and 45 to 54 years old – enjoy an equal share of the market at just under 20 percent.

Yet when it comes to handset choices, there are some clear differences between the preferences of older and younger buyers. For instance, buyers under 44 have a tendency to favor phones with the latest features, or the coolest designs. Those 45 and older, on the other hand, tend to prefer more basic models. Among consumers aged 44 and younger, the most preferred handsets include the following:

Motorola’s sleek RAZR
Sony Ericsson’s music- and imaging-focused model Z500
UTStarcom’s affordable camera phone: The CDM-8910

These and two other models (Motorola’s feature-laden V710 and its V265 camera phone) don’t make the top 10 for those 45 and older. By comparison, the most popular handsets among consumers who are 45-years-old and older are the following:

Motorola’s V180, a basic clamshell model
Samsung’s A650, another basic clamshell model
Motorola’s V220, an entry-level clamshell model with a camera

These models, and several others, don’t show up in the top 10 preferred by buyers younger than 44.

Have considerations of age demographics penetrated the mobile phone sales process? Not much – at least, not yet. Walk into any retail mobile phone store and you’re likely to be surrounded by younger sales clerks who have been told to push the latest cool handsets loaded with features and bundled with new-fangled services. But many middle-aged and older folks aren’t all that interested in such bells and whistles.

Meeting the Needs of Older Consumers

One foreign carrier, Vodafone, has made a conscious effort to better meet the needs of older customers. Last year the company introduced a line of phones made by Sagem called, “Vodafone Simply.“ They’re not frumpy or dumbed-down in a condescending way; they’re just good basic phones. No sales figures have been made available, but the fact there are now three different versions (VS1, VS2, and VS3) is a good sign they’ve been well received.

These easy-to-use phones come equipped with the following features:

Voice calling and text messaging only
An intuitive design
Built-in helpful tips that appear on the display

Whether U.S. carriers pick up on the notion that older consumers prefer simpler phones remains to be seen, but it’s possible, especially when you consider that Verizon Wireless is operated jointly by Vodafone and Verizon Communications. Plus, Vodafone’s CEO Arun Sarin is a silver-haired 50-year-old and Motorola’s CEO, Ed Zander is 57. Savvy Boomer-aged executives, like these, might just be open to the concept of cool phones with the right feature sets for their customers in their age group.

Bottom Line

The wireless industry’s emphasis on younger buyers won’t end soon. And it shouldn’t. Young people and the bleeding-edge of technology go together. But for carriers and handset manufacturers in particular, failing to also target older users with appropriate devices and services would be a big mistake in coming years.

Of course, smart manufacturers and carriers will aim for both: cutting-edge phones for younger users, and more simplified and practical models for older people. The older customers don’t necessarily need all the latest features and functions; they just need the ones that do the jobs they want done. Like making (and not dropping) a call, sending simple text messages and accessing the Web. They might like to be entertained in a very simple way, too.

That said, older folks don’t shy away from technology just because of their age. Look around at how many silver-foxes have glommed onto the iPod trend. Simplicity is the key. While handset makers should never turn away from younger customers, it’s important to keep in mind that paying attention to older folks is smart business, too.

-- Neil Strother, Research Director, Mobile Devices