From the May 1997 issue of Entrepreneur

He was Joe Average; she was Jane Doe. They lived in a traditional nuclear family and watched "Laverne & Shirley" for laughs. They thought disco was hip and computers were for nerds. And they believed there was such a thing as the right brand of dishwashing liquid or the correct kind of car. They were typical American consumers--and back in 1977, the world of business still believed in them.

But a funny thing happened on the way to 1997. We discovered we were not a nation of typical citizens with common market needs and a one-size-fits-all identity. We were large-sized women and single dads, ethnic minorities, yuppies and slackers, affluent seniors, savvy teens, gourmet coffee drinkers, self-made millionaires and burnouts seeking lives of voluntary simplicity. Instead of assuming that one "head of household"--presumably a man--was calling all the shots on purchases, businesses learned to recognize the considerable economic muscle of women and children.

As we discovered this diversity, we also found the technology to differentiate ourselves. Enter the age of target marketing, with computers to track our incomes, lifestyles and spending habits. Though niche marketing had already dawned in the '70s, in the '80s and '90s, it not only changed the landscape of American business, but it also changed the way consumers viewed themselves.
Joe Average and Jane Doe are now history. In 1997, the typical American consumer has a name, a life and a laundry list of particular needs. And in the future, say experts, consumers will demand even greater recognition of their individuality.

None of this is to say that broad societal trends have been absent these past two decades. On the contrary, Americans are now older, wiser, hipper and more exacting than ever, thanks to the forces of time and technology. As we look back on the past 20 years of consumerdom--and forward to the decades to come--it's clear that the only constant will be change. Welcome to the kingdom of the new, improved American consumer.

Women At Work

In 1997, it's news to no one that women are working. The trend that began with the women's movement of the '60s is now an inescapable reality. According to the Bureau of Labor Statistics, some 59 percent of women participate in the paid work force today, compared to 48 percent in 1977.

Though most of us take working women for granted, their impact on society can't be underestimated. For one thing, increased economic power means women consumers can no longer be marginalized.

"When I started working with big companies [in the '70s], they looked at women as relevant mainly as purchasers of domestic items," says marketing and trends consultant Judith Langer of Langer Associates Inc. in New York City. "Now it's recognized that women play vital roles in all kinds of purchases. Even in the high-tech [industry], which is skewed toward men, companies can't afford to ignore the needs of women."

What do women need from your business? Try respect and courtesy without condescension. And since more and more households are headed by two wage-earners--or single women and men--time is the ultimate commodity.

"Today, no matter how little money you have, you have more money than time," says marketing guru Martha Rogers, co-author with Don Peppers of Enterprise One to One: Tools for Competing in the Interactive Age (Doubleday/Currency) and co-founder of Stamford, Connecticut-based Marketing 1:1 Inc. "People accept that they have to spend money [to acquire things], but spending time is another matter."

Dual-income couples have spawned another contemporary phenomenon: the economically powerful kid. According to New York City market research firm Packaged Facts, children aged 5 to 14 spend an estimated $16.7 billion and influence the spending of another $150 billion annually. Packaged Facts reports that children today are increasingly independent, entrusted with a range of family responsibilities, and encouraged to participate in family buying decisions.

The same applies to teens. Teenage Research Unlimited in Northbrook, Illinois, estimates teens aged 12 to 19 spent $70 billion of their own money and another $33 billion of family money in 1996.

Trading In Stereotypes

Though the youth market certainly existed in 1977, the assumption was that kids and teens were essentially broke, financially irresponsible, and dependent on their parents to make purchasing decisions. Kids today may indeed differ from their '70s counterparts, but that's only part of the story. Businesses understand the youth market more clearly than they did 20 years ago. Where marketers once relied on stereotypes to influence their decisions, they're now looking at actual attitudes and behavior.

A parallel shift has taken place with other "specialty" markets. In 1977, for example, the stereotypical older American lived on a modest fixed income. Today, we know that seniors are likely to have as much discretionary income as their working children, if not more.

In the past, minority markets also fell victim to faulty assumptions. One of these was that marketing to racial and ethnic minorities required no special effort. Another was that the minority market could be lumped into one big demographic blob. Upon closer inspection, neither of these notions proved true.

Not only is the African-American market discrete from, say, the Asian-American market, but the interests of a black college professor don't necessarily coincide with those of a black construction worker. According to a report by New York City research firm Find/SVP, marketing to the $120 billion Asian-American market often means advertising in various languages to a market that encompasses some 22 distinct subethnicities. Companies with a genuine interest in reaching minority consumers can't just assume that mainstream marketing efforts are hitting the mark--or that a single minority-oriented campaign is going to cover the entire minority community.

If it isn't yet, should your small business be concerned with minority markets? In many cases, the answer is an emphatic "yes." If your business draws from a geographical area--or any market niche--with a significant minority population, then your ability to reach those consumers can effectively make or break your venture. And if minority consumers aren't being courted by your competition, they may represent a goldmine of opportunity for you.

Of course, most small businesses aren't going to create individual, culturally sensitive marketing campaigns for every demographic group in existence. That isn't practical--or even desirable. But, unlike the entrepreneurs of 1977, today's business owners must understand the multiplicities of the marketplace. Twenty years of demographic research, targeted marketing, cultural awareness and improved market intelligence have raised standards and consumer expectations.

"The big story is not the change in demographic makeup," says Diane Crispell, executive editor of American Demographics magazine. "It's that we've learned to recognize these markets and to reach them better." People today expect to be catered to and understood, regardless of their race, ethnicity, age and gender.

Breaking The Roles

Yet understanding consumers today takes an increasingly discerning eye. Even objective numbers can be misleading. For instance, Americans are older today than they were 20 years ago--not just individually but as a group. In 1977, the median age of the population was 29.2 years. Today, it's 34.8. Last year, the oldest of the baby boomers turned 50. Americans don't simply feel older; they are older.

But don't expect a run on lavender hair dye and orthopedic shoes. If contemporary consumers dislike being viewed according to stereotypes, they also refuse to conform to predefined roles.

"The baby boomers have always seen themselves as the youth generation, and they still do, even though they're no longer chronologically young," says Langer. "People used to say `I'm 50. I'm middle-aged now, and I should act middle-aged.' They don't feel that way anymore. People are climbing mountains in their 50s. Look at Tina Turner with those great legs. Now people say `If I don't feel old, I'm not.' "

As a result, says Langer, "you see much more generational bonding today. A great example of this is the [clothing retailer] Gap. It was named for the generation gap--a place that kids loved and parents wouldn't be caught dead in. Now it's more like a generation bridge: Kids and adults both love shopping there."

Again, the message for entrepreneurs is to transcend stereotypes. Market niches are not what they once seemed. Consider the case of Generation X. For starters, says Janine Lopiano-Misdom, co-founder of Sputnik Inc., a New York City marketing firm that specializes in the 16-to-29-year-old segment, they don't identify themselves as "Generation X." They are not slackers. And they don't watch MTV.

"This generation has been so misunderstood and misrepresented in the media," says Lopiano-Misdom. Like the whole of American society in 1997, today's young adults aren't signing on to the usual groupthink. "Twenty years ago, everybody wanted to belong to something," says Lopiano-Misdom. "Now everyone's an individual."

Following Their Lead

In a society where everybody wants to belong, marketing is a top-down thing. You tell people what they want, and if you're convincing, they believe you. This was the world of 1977, where folks squeezed into designer jeans regardless of whether the miserable rags were made well, looked good, or allowed their wearers to carry on normal respiratory processes.

A market of individuals has no such intentions. In 1997, people have their own opinions about what they want. Needless to say, this poses a dilemma for businesses. Although companies still spend billions each year trying to win consumers over with catchy slogans, celebrity endorsements and all manner of hoopla, some say a major shift in the way businesses and consumers interact is already underway. Ideas aren't just flowing from the top down; they're rising from the bottom up.

Lopiano-Misdom points to the world of fashion as one example of this democratization. "Designers are getting their inspiration from the streets," she says. "The techno-plastic trend, for example, didn't come from a designer; it began with rave culture." The current advertising obsession with the word "extreme" also originated on the streets (although whether advertising execs have the authenticity to give the concept meaning is still up for debate).

On another front, cutting-edge companies are spending less time trying to dictate what customers want and more time trying to divine it. In Enterprise One to One, Rogers and Peppers make a case for tracking customer preferences as a way of creating future business.

"If I know what a customer has purchased in the past, I can predict what they will want next," says Rogers. "If you bought flowers for your mother on this day last year, I can call you today and ask if you'd like to send another gift. I can even suggest what you'd like to say on the card." Rogers believes this kind of proactive approach is the most powerful tool there is because it plays on consumers' actual preferences while saving them time and trouble.

This approach isn't exactly new to the '90s. In fact, Rogers notes that it harkens back to the days of the general store, when merchants knew their customers individually. Interactive customer service fits with the recent rise of interactive culture, and its beginnings may herald the start of a whole new era in commerce.

"We're entering an age where we're starting to see things differently," says Peppers. "Customers are becoming less tolerant of one-size-fits-all solutions. Expectations are already changing, [until finally] interactivity will become such a compelling way of doing business that very few businesses will be able to succeed without it."

Marketing Wise

Rising expectations come not only from need but also from a greater knowledge of technology and marketing. In 1977, few Americans had ever touched a computer. That means 20 years ago Americans were innocent of databases and mail merges and online research and the World Wide Web. Today, even an elementary school student can manage a simple mailing list and navigate the Internet.

Technology has changed American life on many levels. Imagine a universe without ATMs, cellular phones, fax machines and Federal Express. Back then, you could claim that keeping track of your customers individually was impossible. Today, such a claim just doesn't ring true.

At the same time, marketing hype doesn't pack the same punch it once did. Whether this trend indicates a growing cynicism or a healthy skepticism, selling on the basis of bells and whistles isn't easy anymore. "Brand loyalty still exists," says Langer, "but people are very open about looking for value. They may have talked about saving money in the '70s, but it was almost with embarrassment. Now that isn't true. It's much tougher to sell people today."

Giving people what they actually want--now, that's a timeless strategy. No matter how tastes have changed over the past 20 years and regardless of the various trends, attitudes, movements, breakthroughs, comebacks, setbacks and innovations we've seen, nothing succeeds like serving your customers well. If that's a taller task today than it was in the '70s when Joe Average and Jane Doe reigned supreme, perhaps it's also a more interesting one.

Contact Sources

American Demographics, (800) 350-3060, (http://www.demographics.com);

Find/SVP Inc., 625 Ave. of the Americas, New York, NY 10011, (800) 346-3787;

Langer Associates Inc., 19 W. 44th St., Rm. 1601, New York, NY 10036, (212) 391-0350;

Marketing 1:1 Inc., 700 Canal St., Stamford, CT 06902, (203) 316-5121;

Packaged Facts, (800) 346-3787, fax: (212) 807-2716;

Sputnik Inc., 245 W. 29th St., 15th Fl., New York, NY 10001, (212) 714-0900;

Teenage Research Unlimited, (847) 564-3440, fax: (847) 564-0834.

Gayle Sato Stodder covers entrepreneurship for various publications. She lives and works in Manhattan Beach, California.