Recently we were discussing with our client at Drexel University the phenomenon that higher ed organizations have been wrestling with for the past few years – and which has accelerated lately – called “The Demographic Cliff” (Drexel posted a really interesting piece on it here).
Basically, this is the observation that the number of traditional college-age students in the U.S. is expected to peak in 2025 or 2026 and then decline precipitously – experts are predicting 15% lower. That’s because during the Great Recession of 2008, birthrates plummeted and now, 17 years later, there are fewer kids in the pool to go to college. And as if that weren’t enough, this smaller pool has been exacerbated further by a general trend since Covid of declining enrollments (down 7%) and by the fact that increasingly kids are finding that a college degree is less mandatory for a career. (There’s a terrific article on these additional causes here).
And as concerning as this is for us and our university client, it got us thinking about the broader implications – not just to education (although with a major university as an account, of course that matters to us) but to the wider economy. Because those fewer 17 and 18 year-olds aren’t just going to “not go to college”. They’re also “not going to go into the workforce” which means fewer of them to hire – to, at best, fill roles in an expanding economy, and at worst, replace the Baby Boomers who will – you should pardon the expression – begin dying off about then (the top end of the Baby Boomer generation are, at this writing in mid-2023, 77; median life expectancy for women is 79 and for men is, gulp, 73. You do the “2025-2026” math…)
But wait, there’s more good news.
Because these missing “not go to college” and “not go into the workforce” 17- and 18 year-olds will also “not become consumers”. Which means there will fewer people to buy products. Your products. Which means the fight for customers is about to get more intense – just to stay at par, let alone meet those increased sales goals that your boss just dropped on your desk.
Just like it is right now for colleges and universities.
And if all of this sounds hard to believe, well, that’s understandable. Because America hasn’t faced a situation quite like this in decades (some research indicates in forever – like literally since the founding of the nation). During the post-World War II boom, each year brought more consumers, for a long time in the form of Baby Boomers. And even when population growth slackened a bit, as it did with the Generation X, you still had all those Baby Boomers out there driving sales and you had the Millennials right behind them who there were even more of than Baby Boomers!
But the coming years forecast a significant slowing of population growth. The CBOE predicts that over the next 30 years, the population will grow about a third as fast as it did from 1980 to 2021, and with more than three-quarters of that growth coming from immigration (indeed, by 2043 all population growth will be driven by immigration. Which raises a whole other bunch of questions, which we’ll have to address at another time).
So if all of this sounds like stuff you didn’t see in your brand manager text books back at B-school, well, that’s because it wasn’t there, because as we said, it’s never been like this in the U.S. before, certainly not in the modern era economy.
You’re welcome.
So what do you do? We see three options.
Option 1 is to give up. The problem is too hard, this wasn’t part of the deal when you signed up, see ya later. Not a great option, but hey, it’s an option.
Option 2 is to pretend all that data is wrong and to just carry on as you always have done. Which, you know, also not great, though it may work for a while. It’s kind of like the story Steve McQueen tells in “The Magnificent Seven” about the man who climbed to the top of the tallest building in his town and jumped off, and as he passed each floor on the way down, people heard him say “so far, so good…”.
Option 3 is to double down on the things that have made organizations successful when faced with increased competition for any number of reasons. Because that’s what this really is, right?
Of course, usually increased competition is driven by more actors fighting over a finite number of customers. But a finite number of actors fighting over a smaller pool of customers is fundamentally the same thing. So it makes sense that it might require a fundamentally similar approach.
Namely, to be clear and compelling about what makes you different and therefore better, and derive that difference from a clear understanding of what your customer needs, not what you want to sell.
“Better” of course, as defined by the people you’re trying to attract. It’s not what’s better to you, it’s what’s better for them. And really better, specifically better, not broadly better as just, you know, human beings.
And this “better” will invariably come out of an understanding of what their needs are – not the needs you’ve foisted upon them or even invented out of a wholly inaccurate understanding of them. Needs that will be as difficult for them to articulate as they always have been, made more complicated by the fact that there are fewer respondents available to articulate them. Needs which will likely be about as severely impacted and altered by the demographic changes as yours are.
Most organizations, of course, won’t spend the time, effort and money figuring any of this out, in any meaningful way. As a result, their communications will be what they always are when you don’t do the work - fuzzy, ill-defined, and often, an attempt to appeal to as many people as possible. Which, you know, ends up appealing to no one.
Those that do will have a double advantage – the advantage of doing something that could actually work during the end of the world as we know it, and the advantage of doing it amidst competitors who are doing something that will not.
And that, hopefully should make you feel fine.