Lifestage marketing & New Year resolutions

We can stop a bad activity any time of the year. We can start doing something healthy any time of the year. But many of us pick a date — a day to do it. I started my morning walk routine on a New Year day some decades ago. Ditto for giving up hard liquor. What is it with a New Year date that works?

In her book, How to Change, Katy Milkman explains that any behaviour change is difficult. Some experts tell us that Tiny Habits (another wonderful book on behaviour change) work best. Milkman says that to change a habit, we need an inflection point, something significant. In her Choiceology podcast, she speaks of the Temporal Effect and the way it acts as a catalyst for a Fresh Start. So, significant dates work. New Year. 50th Birthday. 25th Wedding Anniversary. Birth of your first child. She argues that to make change happen (and for it to stick, if I may add), you may want to anchor it to a date. Or a life event.

What is a significant life event? And how does it matter to marketers?

Citibank was trying to study when and why consumers change their bank account. This research done in the US revealed that changing one’s bank account is a significant event and consumers tend to stick to their bank account for years, even decades. Think back. When did you last change your bank account? What Citibank found was that bank accounts change when you take your first job (your employer may mandate a bank account to be opened in a pre-fixed bank branch). You may change your bank account when you get married and move to your own apartment. Then again when you start having kids, you may move to the suburbs. And finally, when your kids fly the coop, you may move house once again. 

This research, done a few decades ago, confirmed that this kind of behaviour was prevalent across the world and led to a new term in marketing: Lifestage Marketing.

Marketers started looking at various “lifestages” of their consumers to target products and services. A teenager. Single working person. Married with no kids. Married with school-going kids. Married with kids in college. Empty nesters, etc. Terms like DINK (Double Income, No Kids) started gaining currency. Products and services started getting tailored for specific stages of a consumer’s life. Home loans are aimed at the young married, with or without kids. College loans are aimed at couples with school-going kids. In India, this started the trend towards saving for “marriage expenses”.

In the western world, some of these definitions are getting a reboot, especially because the “typical” family is hardly typical. The TV series Modern Family vividly presents three very different families: a typical all-American family with husband, wife and three kids; an elderly person married to a young woman with a foster kid; and a gay couple with an adopted daughter. A significant number of US homes are single-parent homes. This should be true of many countries in Europe as well.

I suppose in India we are still seeing a pretty homogenous lifestage pattern, though there are exceptions of single parents, gay couples etc. But the numbers are probably a fraction of what they are in the US. So, will the typical lifestage marketing game plan work well in India today?

You do make big changes like opening a bank account, thanks to lifestage changes. A recent study by Bain & Co has presented a new angle to this. According to the study, an alarming number — 59 per cent — of Indian consumers are ready to switch their savings account from their existing bank. What is the trigger, you may ask? The study says that digital technology has upended some of our theories of consumer inertia. As consumers start using fintech apps and brands for some part of their financial service, they start trusting them more and more. And they are ready to move their savings account to the new brand, if the offer is right. The survey said that almost 85 per cent of consumers using a fintech brand were willing to look at this brand if it offered products like credit card or insurance or savings account. As long as the offer was right.

It was the banking industry that pioneered the concept of lifestage marketing and it looks like it needs to develop new tools to ride the “Digital-Lifestage Marketing” going forward. It is likely that some segments of consumers may be more amenable to the digital switch, while some others may hang on to their old modes. This may, in fact, be determined by the lifestage of the consumer. So, the old concept may live on, albeit with some new caveats.
 

The writer is a best-selling author, independent brand coach and founder Brand-Building.com; he can be reached at ambimgp@brand-building.com