"New" psychological insights are finally changing the way at least some marketers view customer purchasing behavior. I say "finally" only because, although the psychological insights are new, the psychological knowledge behind them dates back to the mid-20th century. You might say that the light bulb was screwed in decades ago but we've only now stumbled across the pull chain.

That's the good news. The bad news is that most marketers continue operating in the dark.

I'm referring to life-stage theory, known academically as "epigenetic principles." While Freud dabbled in it, credit for creating this field rightly belongs to Erik Erikson, the highly-respected, psychologist, teacher and author. Erickson fully articulated eight primary life stages and how human behavior changes as we transition from stage to stage. While Erikson, himself, did not delve into the marketing implications of life stages and of the transitions from one to the next, others—including social scientists Ken Dychtwald, the author of Age Wave, and David Wolf, author of The Ageless Society, have connected the dots in a powerful and almost irrefutable way—and as we'll discuss, the enlightened minority of generational marketers has amply demonstrated the power and importance of understanding generational psyches.

Of the eight stages Erikson defined, only the latter four matter when you're talking about real customers (as opposed to parents of younger kids) because the first four lead up to our teen years, when we start buying stuff ourselves (rather than pestering our parents to buy some loopy breakfast cereal). These stages are called:

• Adolescence—our teenage years, when joining peer groups, finding role models, first dates, first cell phones, first beers, iPods, eating snack foods and guzzling soft drinks are the big shtick. Oh yeah, teenage angst, too.
  
  
• Young adults—the time when we're looking cool, looking for love, pairing up, nesting, buying appliances, furniture, housewares, small cars and guzzling beer and lattés. Depending how lucky we are, this can take 10 years or forever.
  
  
• Middle adults—when we're settling down, raising kids, taking family vacations, saving for college education, buying bigger and better cars and homes, concerned about generativity and global warming, switching spouses, switching to premium beer and financially overextending ourselves with lots of consumer debt. Then comes our mid-life crisis, followed by ...
  
  
• Mature adults—when some of us acquire wisdom, most of us become more relationship-oriented, we gradually get off the treadmill and start enjoying ourselves and others, we start climbing out of debt, have considerably more discretionary spending power, indulge ourselves with fine cars, fine wine, fun trips and spoiling the grandkids (but giving them back to Mom and Dad to change). And, oh yeah, most of us lose our appreciation for carbonated beverages, especially beer.

Of course, the timing of passages between these stages differs by person, by culture and even by generation. For example, the baby boomer cohort is having a bit of a hard time attaining maturity. But eventually, we all trip over all the bases in more or less predictable fashion.

So considering all this, wouldn't you expect recognition of customer life stages to be a "must use" marketing tool? Well, it still isn't, despite some marketers pulling the chain and receiving a blinding flash of the obvious—that generational psyches have a powerful impact on purchasing behavior, which we ignore at our own risk.

And the risk is not minimal. Take a look at the list of "losers" listed below—companies (and industries) that have been bested by competitive companies and product categories that are leveraging the power of life stages.

Figure 1




All these defeats (and victories) result from winning-side marketers getting knee-deep in the preferences of life stages and delivering value to their members. Not that target cohorts generate all the revenue, but heightened product appeal to a specific life stages provides the sales leverage needed for winning marketers to separate from the pack.

So why aren't all marketers leveraging the power of understanding generational psyches, considering the effect on marketing outcomes? The answer is depressingly simple. In fact, just four inhibitors do most of the dirty work:

1. Consumer marketers remain stuck in a mass marketing time warp.
   
   
2. Advertising agencies create advertising to win peer approval first and sell stuff second—and the "peers" in question are overwhelmingly from the young adult cohort.
   
   
3. Academically, there's but minimal overlap between marketing and advertising curricula on one side and psychology and sociology on the other.
   
   
4. "Company-first" thinking—rather than "customer-first"—still rules.

In other words, the chain pull for the light bulb might be seeing more action, but marketers wearing blinders still can't see.