By Sally Haase.
Not long ago on a sleepless night, I turned on the radio to listen to Coast to Coast – you know that overnight talk show about aliens, big foot, chemtrails, a host of conspiracy theories, and occasionally some really interesting interviews. As I listened I kept trying to place the voice that was so familiar to me. While the topic was interesting, my mind was still sorting through years of voice files. After a break for news, the host reintroduced the guest – Ken Gronbach! Of Haddam!
Ken is president of KGC Direct. You’ve probably seen his initials on the top of the Clock Tower Shops building from Route 9. Ken spent most of his career in marketing and presently is a well-known speaker and author on demographics. The interview, though contributing to my insomnia, was so intriguing that I knew I had to surprise my husband with a copy of his book, “Upside, Profiting from the Profound Demographic Shifts Ahead.”
But what exactly are demographics and how can they be useful to us? I decided to interview Ken for this article rather than write my own Cliff’s Notes (err Sally’s notes) on the subject.
- Ken, what is the definition of demographics?
Demographics is the science and study of statistical data relating to specific populations of people and the generations that make them up. Think of it this way: accountants and economists count money and stuff; demographers count people.
- Do you have some examples where corporations have benefited from the use of demographics or perhaps have failed by not recognizing the need to know their customers?
Back in 1998, shortly after my not-so-quiet discovery of the marketing power of shifting demographics, I was contacted by the Chief Marketing Officer of Levis Strauss, the huge blue jean manufacturer based in San Francisco. Levis Strauss was then an $8 billion privately held company that produced their product domestically. He had heard of my research based on my affiliation with Bob’s Stores. (I recall having to bribe them, literally, for the privilege of being able to sell their jeans.) Levis Strauss was about to double the price of their jeans because they could not make them fast enough to meet the demand. However the CMO was sensing a shift in the jean market as sales were just beginning to soften. He asked me if I thought if Levis Strauss could see a demographic influence to their market. I asked him for the age range of his core customer. He stated that it was an 18 to 34 year old man or women. I asked why the cut off was 34 years old? He said that after 34 most folks could no longer fit in the product. I explained that our research showed that Levis Strauss was a Baby Boomer business/market. He agreed. I explained that the last Baby Boomer was born in 1964 and that when you added 34 years to 1964 you arrived at 1998. There was a long silence at the other end of the phone. He asked me what I thought that demographic fact meant to Levis Strauss. I told him to update his resume. Levis Strauss’ jean business proceeded to drop like a stone to half of its former self over the course of the next few years. This is what happens when you ignore the demography of your market. The most important question in marketing is “What is the demographic status of my core market?”
Sally: While your intent was to write this book for business professionals, how can it be of use to consumers like me?
Ken: The largest generation ever born in the United States, 86 million Generation Y/Millennials currently 14 to 33 years old, is finally leaving home. The U.S. is conservatively 25 million housing units short of its needs so housing has to spike nationwide or these young people will be living in tents. If you own a home and want to sell, hold off as long as you can because your home’s value can only go up. The housing spike should last for 15 to 20 years.
Sally: Do you have a definition of the generations from Baby Boomer to Generation Z? I see several different age parameters.
Ken: You cannot compare generations unless you are consistent. We know generations are twenty years long and that the huge Baby Boomer generation was born 1945 to 1964. The rest is easy. The diminutive Generation X was born 1965 to 1984. The monster Generation Y/Millennials was born 1985 to 2004. Generation Z is still being born. It will be small. Yes, there are many opinions about the size and make up of generations but they are exactly that, opinions/subjectivity. We use census data.
Sally: Are you optimistic about the future?
Ken: In a word, yes. That’s why my book is titled: Upside, Profiting from the Dramatic Demographic Shifts Ahead. We are about to experience an economy that is driven by 86 million Generation Y young people starting households and entering the U.S. labor force. It is a tsunami.
Sally: Looking into your crystal ball, what are your predictions for the future of Haddam? Oh! Now I know why you were interviewed on Coast to Coast!
Ken: We really don’t need to change our town. The quality of life here is high and our river is second only to the Rhine. Gen X (aged 34 to 53) is very small and is currently an issue for the town; no kids, no volunteers, no labor. It is why we are currently closing schools.
However, the huge Generation Y (aged 14 to 33) tsunami is just off-shore. Think military spending on steroids. Electric Boat, General Dynamics and Sikorsky. Gen Y is the labor. CT and Haddam will benefit from nationwide recruitment. Gen Y will have kids and embrace the superior HK District 17. New housing will spike. All good. Relax.
Sally: The book, “Upside,” is not a text book; instead, it is an enjoyable and often amusing discussion of where we’ve been, where we are and where we are going. Where can we buy your book, Ken?
Ken: Buy the book on my website, www.kgcdirect.com and I will send you a signed /inscribed copy.
