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The ultimate bundle: baby boomers and teenagers.

When the infamous Willie Sutton was asked why he robbed banks, he replied, "Because that's where the money is." Ask small telcos and co-ops why they focus the bulk of their advertising and marketing budget on baby boomers, and they'll likely give the same answer. Delve a little deeper, and it turns out that baby boomers with teenagers at home are the real mother lode. At first glance, this approach seems to fly in the face of conventional marketing wisdom that says either focus on your largest demographic, in many rural areas, this would be seniors, or market to the younger generation because they're the next wave of customers. But these two demographics--the 65-year-olds and up and the 20-somethings--often are lost causes for telecommunications providers.

Hard-to-Reach Customers

Robert Trottmann, director of marketing for Fidelity Communications Co. (Sullivan, Mo.), said his father is a good example of why it's so hard to reach the older generation. "He's a very smart fellow, but he's absolutely useless with anything that has electricity running through it," he said. Over the years, Trottmann has followed the marketing mantra of selling benefits, not services, and has gone from town to town, holding demonstrations of various new technologies to appeal to seniors.

"We worked with a company out of St. Louis to demonstrate video phone service that had to have high-speed Internet to use it," he explained. "We invited people in and showed how you click on it and talk and see the grandkids in New York, but it never took off. We also tried to sell a video mail application so that people could receive photos of their grandkids--that didn't take off. It's hard to grab their attention."

Also trying to reach senior customers, Lisa Roberson, a graphic artist with responsibilities in marketing and public relations for Dickey Rural Networks (DRN; Ellendale, N.D.), explained that the company is located in a rural area with many older people. "In the past, we've held coffee hours or computer classes, but we tend to see the same dozen retired people who we always see," she said.

Jim Patnode, business development representative for Wilson Telephone Co. (Wilson, Kan.), agreed that it's difficult to reach seniors. "I struggle with the older generation the most," he said, adding that he also has tried to no avail to use the grandchildren angle when selling new services. "We don't even have a grasp of what percentage of people have PCs in their home. We're still feeling our way along."

When Fidelity Communications recently rolled out its IPTV service into areas where its cable service doesn't reach, Trottmann said he was surprised to find that many seniors don't have multiple televisions. "They have one TV set in the living room--they don't even have two TVs," he said. "Their needs are pretty basic--they want basic phone and TV and that's it."

If the seniors are problematic, the 20-somethings are even worse. "They all want cell phones but nothing else," Trottmann said. "They don't want landlines or other services."

For DRN, this phenomenon is particularly difficult because it doesn't offer cellular service. "The young group all has cell phones, but they won't bother with anything else," said Janell Hauck, DRN's marketing manager.

Many telecommunications experts note that 20-somethings are typically very price sensitive while at the same time not concerned about service quality or customer assistance, so they often will opt for the least expensive provider, regardless of poor coverage or dropped calls. By the same token, many seniors are on fixed incomes, and may have less to spend on additional telecommunications services.

Boomer Ca-Ching

Hauck said it makes good business sense to consider the income levels of different demographic groups. "You have to have an understanding of what their wants and needs are and what monetary situation they're in," she said, adding that seniors and 20-somethings generally don't have big salaries. "Boomers have the most spendable income of any group." Hauck's assistant, Roberson, agreed. "Our focus is not necessarily to reach the kids, but to reach their parents," she said. "Families with children are who we want to stay in the area. They're going to be the customer for life and maybe their children will be too."

Wilson Telephone's Patnode echoed that sentiment. "Our focus is mom and dad and whoever the younger group is," he said. Even when DRN embarks on a youth-centric campaign, the real target is still the parents. "In the grade schools, we teach younger children telephone etiquette and how to use the phone; and for the fourth and fifth grades, we teach the kids about Internet safety," Hauck said. "When we do this, we give the kids gadgets and notepads that have our name and logo on them. These find their way home and the parents see them, so that's good PR and helps build brand recognition."

Fidelity Communications gives out T-shirts with the company logo and the name of the high school football team. At half-time, the cheerleaders toss them out. In addition, the company donates money to the high school baseball team to buy uniforms. "These types of activities show our community support," Trottmann said. "And the parents are our customers, both business and residential, so that benefits us down the line, especially as competition comes into the area."

DRN also runs a back-to-school promotion in the fall that targets kids and parents. "We'll have a checklist of must-haves for school--things like Internet service, calling cards, 800 numbers," Hauck said. "We want kids to be aware of our company. When they're helping their parents with the computer, they're the ones who say, 'Hey, Dickey Rural Networks has services that can help here.'"

Marketing to Teens and Parents

Wilson Telephone's Patnode agreed that teenagers helping their parents with technology is a common phenomenon. "Kids want this stuff [high-tech services], but mom and dad pay for it, so we want to provide value to both," he said, explaining that the company launched a new marketing campaign in July to cater to both segments. "We brought in a consultant to help us appeal to everyone from teenagers to people in their late 40s and early 50s."

Since Wilson, Kan., has no local newspaper or radio station, Wilson Telephone's primary thrust is through direct mailings. "We put a lot of thought into our pictures and backgrounds and colors," Patnode said. "We didn't want ours to look like junk mail." Patnode explained that the company focused on a Midwestern theme and included some local photography. "In one shot, we have a 15-year-old girl walking down the railroad tracks during wheat harvest," he said. "In another, we have a mom and dad and a 13-year-old boy in a home office or den while working online."

Since Kansas is known as the sunflower state, Wilson Telephone also used sunflowers in its materials. Another marketing image was a night shot of the local theater's marquis with billing for a popular blues band that performed last summer. "We also filmed two 30-second commercials and ran those on cable TV," Patnode said. "The commercials tell about who we are and displays the new logo, which infers DSL service by showing a globe spinning inside a wooden crate. We used the same colors in the commercial as in the brochures."

Matt Thornhill, president and founder of the Boomer Project, a market research and consulting company based in Richmond, Va., said targeting both groups is smart marketing. "You always want the message to appeal to everyone," he said. "Verizon is running an interesting ad right now with a father in a bathrobe, asking his two kids what they got for Christmas. Both kids got high-end phones and gadgets. Dad asked what he got, and they said, 'aftershave.' He said, 'Dad got hosed.' This ad is targeted to both youth and boomers. It says, 'You took care of your kids, now go buy something for yourself.'"

The baby boomer generation--defined as those born between 1946 and 1964--and their children form a unique marketing opportunity, Thornhill said. "Boomers are a consumption driven generation, and they've trained their kids to be uber consumers," he said. "They want to provide all the bells and whistles to keep the kids happy at home."

In addition, Thornhill said boomer parents want their kids to have everything. "They're very devoted to their children," he said, explaining that they took birthing classes, toured the hospital to make sure it was equipped to deliver babies, and read books about parenting and how to raise them. "They want their kids to like them. Preying on all of that makes sense from a marketing standpoint."

Finding Success

Wilson Telephone's Patnode said the company's new marketing campaign, along with a new bundling strategy, has been a success. "We offered bundles of DSL, dial tone--a first for us to include dial tone in a bundle--and digital cable TV," he said. "We priced it so it didn't make sense not to take the bundle." Since the launch last July, Wilson Telephone has converted 135 dial-up Internet customers to DSL.

Hauck said DRN's combination of soft-sell and hard-sell techniques, along with new bundles and promotions, have led to 400 new customers within two months and 1,100 new customers within the past year. "Out of 9,000 customers, that's pretty significant," Hauck said. The 400 new customers came in the last two months of the year. In November, DRN offered a $50 gift certificate to a local grocery store if customers signed up for a bundle (typically comprised of Internet, TV and local dial tone). In December, the company offered a $50 gift certificate of community cash (to be redeemed at local merchants) when customers signed up for bundled services.

While pleased with these impressive numbers, Hauck said it's not possible to pinpoint the success to any one thing. "It's really a combination of our soft sales, community coffee hours and direct mailings," she said. "The more times you touch people and let them know which services you offer, the more likely they are to remember you when they're ready to buy."

Rachel Brown is a freelance writer. She can be reached at rachelsb@aol.com.
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Author:Brown, Rachel
Publication:Rural Telecommunications
Geographic Code:1USA
Date:May 1, 2007
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