Selling to the Baby Boomer Generation
January 28, 2008
Over one-half of all residential replacement HVAC equipment sold today is bought by Baby Boomers, a pretty amazing feat for the demographic group that makes up just 25 percent of the population.
But, Baby Boomers own 70 percent of the nation’s wealth so most can afford to replace instead of repair. Also, their homes tend to be large enough to require more than one comfort system. Finally, Baby Boomers own nearly one-half of all homes in America, many own at least one vacation home, second home, or rental home.
For the first time in history, the changing needs of the people born between World War II and Vietnam offers our industry an opportunity to break the feast and famine cycles of weather-driven sales. When properly approached, a large percentage of Baby Boomers will gladly replace their working HVAC systems in order to improve their homes and enhance their lives.
COMFORT PROBLEMS AND MONEY TO SOLVEWhen Baby Boomers started buying homes, houses started getting bigger. The average size of a house increased from 1,400 square feet in 1970 to over 2,300 square feet in 2004. Unfortunately, most builders didn’t address the fact that it’s pretty hard to provide even comfort throughout a large home with a single-stage unit and a fixed-speed indoor fan. Adding to the homeowner’s discomfort is the tendency for builders to install the least expensive, loudest, lowest efficiency heating and cooling equipment allowed by law.
To learn how to appeal to the market segment with the most money, the National Association of Home Builders commissioned a survey titled, “Boomers on the Horizon - Housing Preferences of the 55+ Market.” This in-depth study revealed most Baby Boomers are willing to spend serious money to live in comfortable homes.
Some key points included:
• Baby Boomers will invest in lower energy bills. When asked, “How much would you pay up front to save $1,000 annually on utility costs” on average, home-owners 55 years old and up will pay $6,380 to save $1,000 per year. A total of 25 percent of the survey participants would pay $10,000 to save $1,000 annually.
• 86 percent of Baby Boomers are interested in an energy management system.
Even though the survey didn’t define “energy management sys-tem,” the vast majority wanted to somehow manage the energy in their homes. Baby Boomers understand energy. We’ve lived through two oil embargos and watched gasoline and natural gas prices double, then double again.
Most Baby Boomers believe the cost to heat and cool their homes will continue to climb for the foreseeable future. For Baby Boomers getting ready to retire, a primary concern is paying forever-increasing energy bills on a fixed income. Give us an opportunity to buy a premium efficiency comfort system while we’re still in our peak earning years and be pleasantly surprised at what happens.
• 32 percent of higher income buyers considered multi-zone HVAC important.
Again the survey didn’t explain “multizone HVAC,” but a lot of people knew they wanted it. It’s a fair guess many participants equated “multizone” as the ability to shut off heating and cooling to unoccupied rooms. Others felt more than one thermostat would do a better job of controlling comfort and some Baby Boomers just wanted to be in control.
• 75 percent would choose a smaller home with higher-quality products.
Baby Boomers hold the record for being burned by poor quality and bad service. We’ve bought cheap hedge trimmers only to have the handles break the first time we used them. We’ve hired service companies that bragged about their low rates and lived to regret it. We finally learned what our grandparents meant when they said, “buy cheap, buy twice.”
• 77 percent are very concerned about structural material.
According to the survey, be-fore Baby Boomers would scrimp on the quality of materials going into their homes, they would: buy a smaller home; buy a smaller lot; drive farther to work; live farther from shopping. For Baby Boomers, peace-of-mind is the primary buying motive.
• 60 percent said brand names were very important.
Baby Boomers not only use brands as a cue about quality, strong brands help us save time shopping for things we may not know much about, like heating and cooling equipment. Most members of the accumulation generation need all the free time we can get. In fact, about 30 percent of us try to make more time by sleeping six hours or less each night. A properly installed well-known brand can provide both peace of mind and a peaceful night’s sleep.
• 75 percent will pay to upgrade carpets.
If 75 percent of boomers will pay to upgrade something that will never pay for itself, can’t enhance health, and won’t improve the comfort in every room in the house, why don’t 75 percent of Baby Boomers seriously upgrade the most important system in their home when it’s time to replace it?
• The No. 1 reason Baby Boomers don’t upgrade to premium comfort is most comfort consultants don’t sell the way they prefer to buy.
Baby Boomers have been burned by more salespeople than any generation in history. We’ve bought really bad products from door-to-door salespeople we could never find again. We purchased insurance policies primarily designed to make new agents rich. We’ve been beat up more than once by unscrupulous commission hungry car salespeople.
Every bad buying experience is filed away in our subconscious minds - waiting to pass judgment on you. If you portray just one old-school sales behavior or trait our gut feelings start raising red flags and start killing the sale. If you want to do business with us, you’ve got to sell the way we want to buy.
[Editor’s note: Boomer Selling Part 2 will detail how to create the confidence boomer buyers must have in you before they’ll spend their hard-earned money on what you’re selling.]
Sidebar: Vital Statistics• Baby Boomers control over 50 percent of all discretionary purchases.
• They spend discretionary income on their home first.
• They account for more than one-half of all remodeling expenditures.
• 60 percent of Baby Boomers complete some type of home improvement project every year.
• Most high income buyers are Baby Boomers, 11 percent of households with incomes of over $100,000 account for 25 percent of all remodeling expenditures.
• They view home improvement as a smart investment.
• Homeowners most satisfied with their new comfort system are 55 and older.
Publication date: 01/28/2008