In the past year, I’ve had multiple in-depth conversations with moms and dads about the choice of elementary, middle school or high school for their children. These are parents who have concluded that their child needs something different from their local public school, and are fortunate enough to be able to afford a private school option. So, I’ve been focused on Mom and Dad’s educational choices as discussed in the Education chapter in my book, Tuning into Mom: Understanding America’s Most Powerful Consumer.
Even with this focus on education, I’ve overlooked an important segment that actively spends and supports education in their family: the Grandparents. A recent AARP study of almost 2000 grandparents found that 53% of grandparents spend money to help with their grandchild’s educational expenses.
More Grandparents Equal More Education Spending
As of 2010, there were an estimated 65 million grandparents in the United States, with the numbers projected to increase to 80 million by 2020. In 2015, 72 million grandparents will cumulatively spend $61 billion on their grandchildren on all categories of spending.
Out of this number, 38 million grandparents will financially support their grandchild’s education. In a different study, MetLife found that a third of grandparents who spend on education averaged $1655/year, and 40% spend more than $500. Extrapolating to all grandparents implies education spending averages $500/year, resulting in a $19 billion education market from grandparents in 2015.
Grandmothers Are the Prime Target Market
College education for their grandchildren is a priority, even if it causes financial hardship. Fidelity Investments reports that 72% of grandparents prioritize paying for a grandchild’s college education, but only 37% currently save for the outlay.
My own experience aligns with education as a priority for grandparents. My grandparents contributed significantly to my college tuition. I’m sure that my father, a single parent, could not have afforded the family contribution required by financial aid without their help. This was, by far, the largest amount of money they spent on me. And while both my grandparents were highly supportive of education, it was my grandmother who advocated the most.
As this chart from MetLife shows, grandmothers will outnumber grandfathers for the foreseeable future, and in my judgment, are the bull’s-eye target for marketing strategy.
Marti Barletta, author of PrimeTime Women documents that the majority of spending power is wielded by women ages 50-75. Despite this large market size and spending power, much of the time these women, many of whom are grandparents, are not recognized as a critical target and are overlooked. Instead, brands focus on capturing young adult Millennial consumers or family households with parents ages 30-49.
“Today’s Boomer woman helps with piano lessons, takes the kids to Disneyworld, introduces them to the theatre and takes them out to eat. She travels to see them. She contributes mightily to their college funds. In my PrimeTime Woman research, we encountered many Boomer women contributing to their grandkids’ education.”
Despite all the studies by financial firms showing how attractive the grandparent market is, I still find most brands are focusing on parents and young adults rather than grandparents as targets. Schools, colleges and universities are starting to include grandparents in their communications and outreach, but not nearly to the extent of the parents. Can it be that it isn’t considered exciting to target grandparents? Is it age-ism? I’m interested to know why brands are not targeting grandparents, and hope you will respond with some insights. Leave a comment below, and let’s see if we can come up with some explanations.