A vast untapped market is opening up

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This is the next contribution to this blog by Associate Andrew Penny, an Ottawa-based business development and market strategist for B2B companies, and president of Kingsford Consulting Ltd. We welcome your comments.

By Andrew Penny

I work with dozens of business owners and executives every year. Many of them have been successfully running their businesses for the last 10 to 20 years – steady as she goes. What many of them don’t realize, however, is that a massive shift is taking place in business, driven by the relentless aging of the incumbent “decision making” class.

In fact there are 71 percent more people aged 45 to 65 than in 1990. In the next few years, these people will be leaving the workforce and the next generation will be in charge. The point is that it is not a gradual migration; it will be a rapid and exciting changeover.

About 11,000 people are retiring from the North American workforce every day – many of them are the decision makers you have been selling to for the last 20 years. As they retire, who is taking their place? I guarantee that this new person will be younger and think very differently.

What makes them different?

Boomers

  • Security from the institution
  • Promotions based on longevity
  • Loyalty to the organization
  • Wait to be told what to do
  • Respect based on position/title

Gen X

  • Security from within
  • Promotions based on performance
  • Loyalty to the team
  • Challenge authority
  • You must earn respect

How will they be different?

Many of them are digital natives – they were doing homework on computers and searching the web in high school. They have fully embraced social media and can draw on hundreds of contacts and information sources around the world. So if your value proposition contains a lot of information, you’d better find a new business model.

They are very good at web research. By the time you have your first meeting with a new prospect they will have Googled you and your company, checked you out on LinkedIn and Facebook, looked to see what you are tweeting about, and surfed your website. Your reputation will indeed precede you.

Their hyper connectivity and self reliance means they won’t be in the same job for long. If you invest a lot in relationships to secure future sales, you’d better make sure that you have a broad range of connections at each client so that a “single point of failure” doesn’t shut down your revenue flow.

A quick way to sum it up is selling is finished, buying is now the rule. With almost perfect knowledge in the hands of the buyer, it makes sense to do everything possible to help them buy.

Does your approach get in their way?

Some time ago, I decided to buy a new car. I spent a great deal of time looking at various websites to narrow down my choice. I ended up testing an Acura, an Infinity, and a Lexus. Based on the test drive I decided on the Lexus. I searched through the option choices and colours and figured out what I wanted. I researched prices and rates and knew what was available. In a perfect world I would have emailed the car company and had the car delivered – though it didn’t work that way.

The first challenge was convincing the dealer that the car did in fact come in the colour I wanted, and that the spoiler option was available, and that no, I didn’t want certain features. In fact, the dealer was so busy trying to sell me that he got in the way of letting me buy. I recently bought another Lexus and the dealer got in the way by trying to sell me yet again, so I bought from a dealer in another city by email.

The impact of this demographic wave will be different depending on the business you are in and the segment you sell to. To win new business, in each market there is an opportunity to reach out to these new buyers and differentiate yourself by engaging them the way they prefer to be engaged.

How to profit?

  • Get to know the next generation in your current customer base
  • Participate in events and network events, and understand the next generation decision process (buyer behaviour)
  • Conduct a review of your current market communications activities to ensure you’re generating awareness and engaging the next generation
  • Review your channel strategy to ensure its aligned with technology and how your next generation of managers and owners will want to buy
  • Understand that you are, more than ever, in a global market (buyers and competitors) and ensure you are “in the game”

Not everyone understands this shift. Not all will be as smart as you. Get there first – own the market! But, remember, don’t get in the way of your customers buying from you by trying to sell them.

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