Originally Published: July 2008

Baby Boomers are re-writing what it means to get old. Given that this generation has redefined every life stage as they have experienced it, this should come as no surprise. They are slowly shattering the ‘ageing stereotype’ of their parents as they enter their 50s and 60s through their sheer number and economic power. They are, in fact, becoming more valuable to the market as the rest Australian population starts to feel the effects of the ‘credit crises’. As consumer confidence has fallen and discretionary income put back into the mortgage, Baby Boomers have been an exception to the rule as they have kept spending regardless of the current collective ‘hardship’.

This is all very well and good, but what does it mean to the telecommunication industry?

Essentially it means that there is a core customer who will not be downgrading their spending in the coming months.

Although this industry has been somewhat resistant to the ‘recessionary trend’, this is gradually changing. As food and petrol prices continue to rise, people are being forced to re-evaluate the way they spend and what they are spending on. Although it is hard to specifically cut the price of one’s calls this can be done, through reduced frequency of calls or by changing carrier for perceived ‘better value’. This tightening of the belt has been best evidenced during the week as the Vodafone Group announced that they would be downgrading their forecasts for the coming year. Basically, this indicates that in the year to come the industry will encounter a more challenging operating environment and a less loyal customer.

So where do Baby Boomers fit in?

Although Baby Boomers are saturated in terms of usage in the mobile and broadband product segments, their retention will be important as the Australian market starts to become more volatile. As this generation is not experiencing the same problems as the rest of the population due to super, threshold of income and less probability of mortgage, it is important to treat them in a different way. They should become a core component in retention by learning how to add value to their current plan in a way that will benefit the business, such as selling-on content or up selling on an iPhone etc. If a service provider manages to do this successfully they will keep a customer who will help them in the months to come.