Don't you know your 'NextGen' from your 'MultiGen' and 'InterGen'?

I promise this is the conclusion of my reflections on generational inequality that has dominated the past couple of newsletter editions. I really wanted to "land the plane" and identify a potential strategy that might help brands and marketers develop an appropriate response. The biggest takeaway for me is that the generational strategies of marketers, even the multi-generational ones, are part of the problem because they pit one generation against the other or "take sides" by preferring one generation over another. A Gen Z strategy, for example, aligns brands to the needs and challenges of the younger generation. A prestige or premium strategy, aimed at wealthier 50+ customers, might deliver margin and growth, but it puts the brand out of reach for the younger generation. I believe there is a better alternative that could put brands on the forefront of intergenerational collaboration and societal repair... but I’ll explain the details later in this post.

If you haven’t done so already, I recommend you read the past two editions as background. The first discusses the concerning decline in the mental health and happiness of America’s youth . The second addresses the emerging ‘essentialist’ attitudes of older Americans that dictate where they spend their time and money… and importantly, where they are choosing not to!

Intergenerational inequality

These past newsletters outline the extreme economic inequality that different generations are experiencing. Young Americans are predicted to have the lowest levels of lifetime earnings compared to their predecessors because of several social and economic factors that compromise their ability to accumulate wealth — weak pay growth; high housing costs; low home-ownership rates; high interest rates; rapidly rising property prices; escalating education and health insurance costs. This dynamic is forcing younger people to delay or give up on the idea of owning a house, getting married, or starting a family. More than any past generation, young people are much more likely to live at home and be financially dependent on their parents.

In comparison, 50+ audiences continue to seize a disproportionate share of the economic wealth that America generates. The savings and pensions they amassed over their lifetime (when economic factors worked in their favor) continue to generate wealth for them even if their pay declines — high interest rates on savings; stock markets at an all-time high; house values increased massively and at this stage in their life they are more likely to own their homes or have locked in a preferential mortgage rate that is lower than the rate of inflation.

Increased politicization of age

We are already seeing the politicization of generational divides, especially in Europe, where historic differences mean there has been less focus on racial inequality than in the US (a legacy of slavery) and more discussion of “intergenerational justice.” Intergenerational justice is defined as the identification of systemic issues that disadvantage young people in a society and the moral and ethical responsibilities of older generations to pass on a fair, sustainable, healthy economy. Sprinkle into this mix the increasing urgency of the climate crisis (where past generations are seen to have caused the problem and younger generations feel they are the ones who will have to fix it) and you can see how age is quickly becoming the next big political agenda. <cough> Not to mention the US Presidential race which, as of the writing of this newsletter, has two candidates that will be in their 80's if they win the presidency!!!?

Future leaders see things differently

Last week I found an interesting piece from the UK that looked at the differing attitudes of young, future leaders versus older, more established leaders across many different types of organizations.

This data captures a dynamic that I feel is currently consuming corporate America, where the existing leadership accuses the next generation of having too many demands and unrealistic expectations. On the other hand, the future leaders feel that they are widely ignored (patronized?) and that the existing leadership is unwilling to make the hard sacrifices necessary to achieve long-term growth for everyone. This is classic loss aversion psychology — the older leaders, with all the power and wealth, have too much to lose and thus resist change. The younger leaders, with less to lose and more to gain, are frustrated by the apparent stagnation of the organization and the current leadership's refusal to take meaningful action towards change.

Stagnation vs. generative growth

This tension between generativity and stagnation triggered me (in a good way) to dig out some research from my past psychological training. I recalled the work of Erik Erikson, who was one of the first psychologists to identify a psycho-social development framework… it is said that his framework inspired Freud, who layered on a sexual dimension… but that’s another story! Anyway, Erikson believed there were eight stages of psychosocial development, from infancy to adulthood, and one of these stages focused specifically on a crisis of “Generativity” and “Stagnation.”

What was interesting to me was that the developmental crisis Erikson describes for people aged 40-65 is exactly the dynamic we are seeing in our society today — a tension between the generation of something new, versus the stagnation of what had come before.

Is America experiencing a collective developmental crisis?

Now, I know that Erikson’s theory is specifically focused on the psychological development of an individual rather than a group. But, given the radical shift we’ve seen in the demographics of America and the increasing number of Americans who are (individually) entering this psychological developmental stage, it seems plausible to me that America, as a whole, is entering an era of collective “middle age.” And, because the majority of Americans are experiencing this psycho-social crisis simultaneously, we are all getting to experience it in our families, in our work, and in our communities.

I found this framework particularly helpful because it identified the profound differences between younger and older generations. Where adolescents and young adults are still developing their self identity and their role within groups and ultimately intimate, trusted relationships, where as older people need to feel they are serving a higher calling. This developmental spectrum is very consistent with our segmentation research which identified 6 'essentialist outlooks' that defined the specific ways that 50+ audiences found meaning.

NextGen and MultiGen strategies perpetuate inequity.

As mentioned earlier, most marketers and brand leaders take one of two popular approaches to marketing to customers of different ages. The first is a next-generation strategy (NextGen) which assumes that everything that has worked in the past will continue to work in the future. Such a strategy targets the next generation of customers and assumes that they will have the same wealth acquisition and life-stage development opportunities that we’ve seen in past generations. This approach largely ignores both the demographic shifts and the economic headwinds that are working against a continuation of past performance. Failure of the ‘NextGen’ strategy is unlikely to be realized in the short term because it assumes long-term, lifetime value for these future customers. Full ROI on this strategy is unlikely to be realized for quite a few years, even decades, and by then the key decision makers will be long gone.

The second popular approach is the multi-generational strategy (‘MultiGen’) that keeps a foot in both camps and attempts to find some common ground between the different generational cohorts. In practice, this often means developing a new, compelling proposition for the younger audience (partly because the marketing teams are often young themselves) and then hoping that broad media placement and a little 'age-diverse' casting will entice some older, affluent customers along with the younger audience. Unfortunately, this 'unifying message' strategy ignores some fundamental differences across the different age groups. Returning to Erikson’s framework for a moment, the developmental priorities of young people revolve around ‘identity’ (peer acceptance, role identification, and approval) and ‘intimacy’ (commitments to reciprocal relationships, respect, and trust), whereas the older age groups have moved beyond these motivations and are focused on higher-level virtues and values.

There is opportunity in intergenerational strategies

Rather than NextGen or MultiGen strategies, I’ve come to believe that the real opportunity for brands is the development of intergenerational strategies. Intergenerational strategies, as we define them at Five0 Consulting , start from the premise that there are fundamentally different needs and interests for people at different life stages. This means we must neither take sides in the generational divide, nor assume that there is a single ‘silver bullet’ that will unite and serve all ages. Instead, we listen to and acknowledge the differences between different age groups and recognize that both have something valuable to offer — a wealth of experience on the one hand and a youthful sense of the future on the other.

Intergenerational strategy embraces co-existence

It’s all too easy as a marketer to become focused on an individual target audience and their lifestyle, preferences, and competitive choices. Most of the tools we use in strategy development focus on the persuasion of individual customers as they make purchase decisions — customer journeys, personas, profiles, mind maps, etc. It's very easy to lose sight of the fact that we are social beings and our choices are defined as much by our communities as through logic and reason. If you ask older people who inspires them or teaches them about new things, it is almost always their kids, the smart young colleague from work, their nieces, nephews, and extended family. Similarly, if you ask young people who they turn to when thinking about important purchases like travel, a car, a financial service, jewelry, a renovation, or a home, it is almost always an older and more experienced parent, work colleague, or senior member of the community. The truth is, that all generations learn from each other, and this is an opportunity that is rarely acknowledged nor exploited by marketers.

Intergenerational portfolios can be built by continuing to serve customers as they age

Customers often feel abandoned when brands shift their focus from one generation to the next, chasing the latest trends or the youngest demographic. This not only alienates loyal customers but also misses out on substantial growth opportunities that come from maintaining and expanding relationships with customers as they age. The research we conducted showed that older customers have strong affection and deep experience of the products and services they buy and want brands to evolve with their needs, not abandon them in favor of a younger model. Few brands are actually thinking this way which is leaving a huge opportunity for start ups. In the beauty category, for example, Naomi Watts has launched a new brand called Stripes which offers menopausal beauty products for older women. By rights, such a product innovation should have come from one of the big beauty brands but like many other businesses they were all focused on the next young things. It shouldn't be that way, by developing intergenerational portfolios, brands can offer a range of products, services, and experiences that cater to all age groups. This approach ensures that customers remain engaged with the brand throughout their lives, optimizing revenue streams across both high and low price points. By evolving alongside their customers, brands can build lasting loyalty and secure diverse and stable income streams, ultimately leading to sustainable growth and success.? From an engagement perspective intergenerational brands can also create intergenerational communities and advocates that allow customers of different ages to learn from, and be inspired by each other.

Intergenerational brands transcend function and lifestyle

It was once said that “local brands tell us who we are, but global brands tell us who we could be.” I think this same thought exists for single-generation brands versus intergenerational brands. Brands that have a single generational focus really limit their aspirations to function and relevance to the lifestyle of a specific customer. Like global brands, intergenerational brands find cohesion in an aspiration of who we (collectively) can be. A good example of this is Patagonia, who's brand started as a brand for climbers and surfers but who transcended age and lifestyle with a message of climate action. This intergenerational strategy has allowed them to develop products, services and experiences across many different geographies, communities, from food and provisions, recycling services, activism, documentaries and stories from every age demographic. Patagonia's growth demonstrates the advantage of intergenerational thinking and the opportunities it can deliver in terms of innovation strategies and more diversified revenue streams.

Intergenerational brands are born of intergenerational collaboration

Something amazing happens when you bring together teams of future leaders and those with deep experience of more than 20 years. Unfortunately, you can't just gather people of different ages together and hope that great ideas will naturally emerge. Intergenerational collaborations require a little more preparation and a lot of planning to ensure the social conventions of traditional leadership don't get in the way. The successful development of an intergenerational strategy can only be achieved if power structures are left at the door and clear roles and responsibilities are established in the planning process. For example, in some instances we use the voice of the future leaders to establish the long-term vision while the voices of experience are used to guide and mentor them to success.

As we build out our Five0 talent network of experienced marketing leaders we hope to lead the way in helping brands develop their marketing strategies through intergenerational collaboration. Our teams not only can help define an intergenerational strategy but also help facilitate intergenerational collaboration within an organization. As you can tell from the length of this post, this is something we are very excited about.