Mark: Today on PowerTips Unscripted, we talked to Ken Gronbach , president and CEO of KGC direct. You’ve heard of demographics and in your business, it’s probably been looked at solely in the context of marketing and lead generation. But the power of demographics lies much deeper than that. In today’s episode, Ken will share the subtle yet profound effect of shifting demography in the United States, the Americas and the world.

Mark: And we’ll hear what that means to your business in just a minute.

Ken: The most valuable commodity I know of as information.

Ken: Wouldn’t you be better off just.

Victoria: Hi, I’m Victoria Downing and welcome to PowerTips Unscripted, where we talk about tips, tactics and techniques to help you build a strong, profitable remodeling company. And I’m here with my co-host, Mark Harari. You sure are. And, what load of fun do you have planned for us today? Oh.

Mark: What load of fun do I.

Victoria: Have last year? Fun guy.

Mark: I think Ken’s bringing the fun.

Victoria: Yeah, that’s true too. You know, I had the opportunity to speak briefly to Ken on the telephone a while back, and he made a statement that just made me sit up and take notice. Something on the order of our members. We’re going to be in the catbird seat in terms of business, really, for many years in the future.

Victoria: So that sort of caught my eye or my ear rather. And I knew we had to have Ken on to share that. Yeah. That’s great. Now, what was behind that with everybody that’s listening?

Mark: That sounds awesome.

Victoria: Yeah. So shall we dive in?

Mark: Dive away.

Victoria: Ken Gronbach is president and CEO of KGC direct. He’s an internationally respected demographer who’s been able to forecast societal, commercial, economic, cultural and political phenomenon with uncanny accuracy. Hey. Welcome, Ken. Hey. Thank you to be here. Thank you so much for taking the time to be part of this.

Ken: Now. My pleasure.

Victoria: You know, I don’t think I’ve ever spoken to a DBA, a democ grifter before.

Ken: You know, it’s weird. There’s not many of us made. Probably about a thousand of us in this room. Hey, you want to. I’ll tell you. But just as a curious thing. Go to go. Go put in Ken, just my first name, the moderator, and see what happens. That’s how few of us there are. Oh.

Victoria: Oh, geez. You’re the only Ken out of all those. That’s awesome. So you were in marketing, and now you’re a demographer. What? What happened to make that switch?

Ken: Lost a major client. Lost American Honda motorcycles as a client. We had American Honda motorcycles for, like ten years, and we printed money with them. We had 140 dealers in the northeast. We had the whole northeast region. And in 1986, we ran millions of dollars for the that and nobody came into the dealership. Oh, and so the market Honda called me and said, Ken, did you run the ads?

Ken: And I said, yeah, I don’t like that question. Yeah. So from I said, what’s going on? And he said, well, the Japanese brands Kawasaki, Suzuki, Yamaha and Honda motorcycles were all suffering from zero traffic in their stores. And what the heck was going on? And the slug of a bike called Harley Davidson was selling really well. And, we didn’t we didn’t know.

Ken: We tried everything. We came up with new products. We reduced the price. We changed our marketing. By 1992, the Japanese brands fell 80%. Wow. Yeah. And it wasn’t until 1996 that we discovered that the problem was the baby boomers moved out of the demo. We sold bikes to men 16 to 24. That was it. 25. They sold the Deathwish, bought a ring, got married and, you know, that was the end of it.

Ken: Once the baby boomers exited the demo, the everything changed. And, so that’s what happened. We lost our market. The market right behind the baby boomers. So it’s too small to sustain our market. There’s actually 9 million fewer people in generation X, people born in 65 to 84 than there than there is a baby boomer generation born 45 to 64.

Ken: So yeah, it was a marketing. So I said, man, that can’t be all this generation has done. So we did homework on generation X, born to 65 to 84. And we discovered that they shut down maternity wards. They shut down the toy industry. They shut down bicycles, they shut down motorcycles, they shut down automobiles. And in 2008, they shut down housing.

Ken: Wow. Yeah. So that’s that’s. And I was so overwhelmed by that. And I get out of the marketing business and now I’m, you know, I started writing books and I’ve written for. And, so you want an answer to things? If there are no people in your market, you’re not going to sell a lot of stuff.

Victoria: Yeah. Yeah. No kidding. So who do you work with now as a demographer? You are you, like a consultant to business?

Ken: Is there anybody everybody from organizations like light of Yours, builders to plumbers to, Bain Capital real estate to, the government to, you name it. So if it if it deals with people, if it deals with if you’re issues, deal with people. And that that’s two things, both market and talent that you need to understand the principles of demography.

Victoria: So tell me more about that.

Ken: Okay. Well what’s the most important question in marketing? Most important question in marketing is not how good is my product? Or or what’s the popular colors? Or how do I say this? It is simply how many people are in my best customer end user market. And is that number getting bigger or smaller because that’s going to determine your future period.

Ken: Wow.

Victoria: Okay, cool. That’s very interesting.

Ken: And the same thing with talent because you, you I just dealt with a company in, Wisconsin last week and they are growing like crazy. And they keep on building warehouses in Wisconsin. And I said, don’t do that. And they said, why? I said, you’re going to run. You’re going to run out of talent or simply aren’t enough people here.

Victoria: So even though the market could the demand could be there, the potential market, the people are there to purchase it. They don’t have the talent to produce it.

Ken: Now they’re an international company. So but they they’re not going to have the talent in Wisconsin to, take care of business. That okay. It’s too small. This is victory. This is nothing more than math. It’s not even algebra. It’s not. It’s not geometry. This is math. Simply math. When, When I when our research department dove into this, they came back to me and said.

Ken: The generation X, born 65 to 84, will never measure up to, the baby boomers was born 45 to 64. And I said, why? And they said, because there’s fewer of them. 9 million fewer of them, an 11% free fall, 11% free fall in the market, atomized it. It doesn’t even shrink. It means it means you’re out of business.

Ken: Wow.

Victoria: So, Ken, what effect is the Covid 19 pandemic? What effect does that have on the demographic landscape in the United States now?

Ken: Very, very, very little. Really? Yeah, it’s actually tiny. The Covid and don’t misunderstand, I’m very sensitive to the people that have lost loved ones. I have lost to good friends to have lost a friend died on the phone. Oh, yeah. No, it was crushing my best friend. And. But he had a preexisting condition. When you look at the math in the.

Ken: Let’s just say, for instance, the math of, the world 7.7 billion people, it’s 7,700,000,000 people in the world, and we’ve lost about a million people to Covid. Is that still a good number?

Victoria: I believe so.

Ken: Yeah. Okay. That’s that’s not even one tenth of 1%. And there people with coexisting conditions, I mean, you know, comorbidity it is this is an awful thing that’s happening to us, and I understand it. But when the rubber meets the road, big picture macro 30,000ft, it’s not going to mean much.

Victoria: Okay. All right. Great. I mean, I’m not great, but, you know, I understand where you’re coming from with that.

Ken: Yeah.

Victoria: Okay. So talk to me a little bit about how demographics or how small business people should think about demographics, how they should use the information, how they even find the information.

Ken: Well, one of the one of the questions that I’m going to beat you and, you know, it’s my favorite book and that’s a book called Best Customer, and that’s it would cost you about 200 bucks a copy, but it’s research done on who your best customer is, and it’s for any industry. So if we understand where the best customer is for remodeling, we can make forecasts, based on the size, is it getting bigger or getting smaller?

Ken: Because if it’s getting bigger, you’re going to do more business. If it’s smaller you have you have a problem, better address it. One of the things that that’s happening right now is there are 330 million people in the United States, and let’s just talk to the United States and not in not Canada, Canada’s one tenth of our of our size, but it’s essentially a replication.

Ken: So those of you that are in Canada, you’re going to do very well as well. The half of the population of the United States lives under one roof half. But the that’s the baby boomers and their generation Y millennial kids. But the kids are finally reaching an age where they’re moving out very late because they weren’t welcomed in the labor force very, very late.

Ken: So what’s happening is the kids are moving out and we’re it’s creating a housing shortage. And we are conservatively 25 million houses or housing units short of our needs for the next 15, 20 years. That is going to drive the remodeling business through the roof. So my encouragement to your remodelers is capitalized so you can take advantage of this.

Ken: Don’t be afraid. It’s coming your way and there’s nothing going to stop it.

Victoria: So how would they capitalize on it? What would you suggest?

Ken: I would suggest they expand their businesses. They expand their technology. They expand their equipment, they expand, they hire people. They they hire good HR people. They hire good I.T. people. They hire good technicians to to do the work. They automate in every way that they possibly can. Because this is not going away. It’s impossible.

Victoria: It’s okay. That’s really interesting. Now, what do you say to the companies that are trying to hire and can’t find the people that fit their needs, like the skilled labor force?

Ken: Okay, stop calling millennials names and hire them. That’s what I’m suggesting, you know, and I’ll tell you why. Because the millennials were born in 1985 to 2004. There’s 88 million of them. That’s 8 million more than the baby boomer population. Oh, my. We have the largest potential labor pool in the history of our nation. Period. No question. Hands down.

Ken: The problem is, we think they’re lazy. We think they’re stupid. We think they’re snowflakes. Lose it because these kids are incredible. Can I tell you quick personal, sir? Okay. My my daughter. My daughter just got married two years ago. My daughters drop dead gorgeous, and I want her to marry Tim Tebow. And I was going to set that up.

Ken: So she comes home and says, Kyle proposed to me. So boyfriend and I accepted it. And I said, what does Kyle do? And she told me and I said, how much does he make? And she told me, I said, that’s not even going to cover your cosmetics. So, but Kyle goes a top, comes to me, ask me for a hand.

Ken: And I said, Kyle, you have a four year degree. Yes. What you write what, your four year degree. And he said it, and I said, you ought to utilize that. And so he saw an ad, somewhere and it went up in the Hartford. We, we have a home in Connecticut. And that went to work for travelers.

Ken: They hired him right away. Give him the you know, they paid him a lot of money. And I noticed he’s not going to work. I notice he wears t shirts when he does go to work. And I noticed and I said, what’s going on? And I said, everything okay at work? And he said, yeah, they got me working on this particular task.

Ken: And I said, what is it? They said they lost billions of dollars in the fires in California. Billions. And they want me to solve that problem. So that doesn’t happen again. And I said, what? They said you could do that. And he said, yeah, well, Kyle invented an app for his phone where people in the field can take a picture of a house in California, enter a little bit of information and determine whether they should, insured or not.

Ken: And I said, and he got a patent for it in patent in his name. And I’m thinking Kyle’s hobbies are video games. I can’t identify with that. But this is who these kids are. We have the best crop of millennial, millennial labor than we ever dreamed of. And the cabinet you’re you’re remodeling people need to be aware of that and lose the stereotype.

Ken: Hire them and train them.

Victoria: Okay. All right. Great. So talk to me a little bit. Do you feel that that is the generation that’s going to be the most influential over the next 20 years, or which.

Ken: No, it is the these people, generation Y millennials are currently 16 to 35 years old. Next 20 years, absolutely, positively they’re going to be they can they will shape everything. And keep in mind too, that this generation, such a generation, we thought that we taught them to be against bullying. We taught them to be fair. We taught them to be transparent.

Ken: We taught them all these and they listened. Now they may be snowflakes, but they’re going to be nice snowflakes and they’re going to be wonderful citizens. And right now they could shape this election coming up a week from now. Yes.

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Mark: Ken, I’m curious. You said that the Remodelers are going to be sitting in the catbird seat, so that makes me kind of feel like what what other sectors are also going to flourish and which ones are probably going to suffer in the in the years to come.

Ken: Well, I think the things that are going to suffer, education is going to suffer. But to a degree, aerospace is going to suffer to a degree. But almost everything else is going to flourish. And the reason for that is when generation Y millennials move out of their homes, they don’t take their parents dish dish soap, they don’t take their parents vacuum cleaner.

Ken: They don’t take their.

Victoria: Breaks.

Ken: That they don’t take their parents cars. And so right now, you know, new cars are selling at about 18 million. What’s going to happen to that is going to go to 25. Well, what else is going to happen? Well, everything else that is consumed, including clothing. And do you think that generation Y is not going to have kids.

Ken: Well, they’re going to have they’re having kids late and that may be a complexity but no problem whatsoever. No. So housing, housing, housing. And that’s not all. On top of that, you have the baby boomers who refuse to die. It’s not that pulse rate 75 is the new 65.

Victoria: There you go.

Ken: Yeah. So I they really don’t. And what I wrote in my notes, I said movement equals remodeling. The populations in the United States, the 330 million people you have, the boomers are moving to where it’s warmer. A lot of young people are following them because there’s opportunity there. So you have movement all over the place. You don’t really if you are strictly in New England, I’d be a little concerned, but not much, because what’s happening is the people in New England are recruiting the businesses in, in New England, high tech, aerospace and so forth are recruiting generation Y millennials, and they’re paying them ridiculous salaries and moving them in.

Ken: What do you think that’s going to do to remodeling folks? Remodeling will be off the charts. Just I spoke recently, actually two years ago to, in Oregon to, Foresters Association of Loggers. And they can’t cut trees fast enough.

Victoria: Oh, boy, that is really fascinating.

Ken: Yeah. You’re going to save money. You really are. And I’m. And I’m Mark Levin. Write that down now in two years. Give me a call and say, wow, you were right.

Victoria: So if you if you were a remodeler, if you owned that kind of a business, you would start hiring. You’d start thinking about, again, all the, the automations you could do all the softwares, the technologies, the efficiencies of production and get marketing and start spreading the word.

Ken: Okay. Probably the most important work you just said there is marketing. Let people know what you do and who you are and where you are and what you’re capable of, and make sure that you stand out amongst, your competition, because that’s going to be everything. People will choose you because you’re the best, and there’s going to be so many opportunities to do this.

Ken: In addition, people are more savvy and do more homework. Now on who you are, where you are, what you do, how much you charge. Do you have a problem or are you just simply the best? Whatever. Now is the time to do it. Don’t screw around with it and don’t. Please, please, please be the best at what you do.

Victoria: Yes, really? Right. There’s no point in trying to promote yourself and taking all these opportunities if you can’t do a good job once you get them.

Ken: Precisely. All right.

Victoria: So, you know, it’s really a fascinating topic to me because it looks like sounds like you can predict so much. You can you because you’re understanding people. Do you have any stories or any examples of just some really like wow, that happened because we saw this happening to the population or the shift.

Ken: Barbie dolls and Hot Wheels, Barbie dolls and Hot Wheels. Mattel is in Connecticut. I currently live in South Florida in Bonita Springs, but, Barbie dolls and Hot Wheels. Mattel has its fifth. Excuse me, it’s fourth CEO in five years. Does that. That’s not good. Right? Right. Okay. Wall Street Journal writes about it all the time. And the the the new CEO has decided to take, everything to take Mattel to Hollywood.

Ken: They’re going to do videos about Barbie dolls and Hot Wheels. The kids are going to look at them on their, on their, phones and look at them on our tablets, and that’s going to cause them to Barbie Doll and Hot Wheels sales to come back when she’s down about 25%. And Wall Street Journal writes about this all the time.

Ken: I have articles on it, and I and I read their, annual reports, Mattel’s annual reports, and they say that kids are just more enamored by their phones and by tablets than they are by toys. And we need to reverse that. You know what the real problem is.

Victoria:

Ken: This. Fewer kids.

Victoria: Wow. Really? That many that would have that big of an effect 25% drop in sales.

Ken: Well, you had 25% drop in sales because you have a 25% drop in the number of kids under ten.

Victoria: Oh my goodness.

Ken: Yeah. So yeah. And it is absolutely, positively as simple as that. See in in 2007 we had a record number of live births. We had 4,316,000 live births, 25% of which were Latino. Now Latinos are a separate market, totally separate market. On 2008, here’s what happens. Our fertility drops like a stone and there are fewer parents. And so the the numbers drop like crazy.

Ken: And so we have 25% fewer kids, which adds up to 25% fewer sales in toys for kids under ten. Why can’t we understand this?

Victoria: So what would a company like Mattel do with that knowledge? You know, it doesn’t sound like there’s any any effect they could have.

Ken: No, what what they what they what Mattel needs to do is to go into, different products that you if your market is shrinking and yours and yours is not right, I don’t want to say just for a second to your folks that their market is shrinking because the exact opposite is happening. But if your market is shrinking, you have a problem and you better do something and it can’t be something stupid like, well, if we just, you know, do movies about our product, then it’s all going to return, right?

Victoria: Well, Ken, this is really been interesting.

Mark: Yeah, this has been great, Ken. I have one big question for you. I don’t know if it’s a demographic question, but are you ready for the lightning round?

Ken: Yeah. No. No hard questions. Okay. Just. Oh, and now here’s a reminder. Advantage lightning round. It’s a draft.

Mark: All right. We’re going to put 60s on the clock. Here we go. What’s your favorite business book and why?

Ken: Okay. My favorite business book is Best Customer. It is a you’re not going to find it in a bookstore. You’re going to have to look it up. Best customer. And it’s going to cost you a couple hundred bucks. And you probably have to pay that every six months because somebody is doing incredible research on it. And you need, you know.

Mark: If you weren’t a demographer, what do you think you’d be doing.

Ken: To be a driving race car? Good.

Mark: What do you not very good at?

Ken: I can’t hit a ball. I’m terrible at baseball. I couldn’t create a loud film.

Mark: Your room, your desk or your car? Which would you clean first?

Ken: All right.

Mark: On a scale of 1 to 10, how would you rate your memory?

Ken: Probably a five.

Mark: Describe your high school self in one word.

Ken: Arrogant.

Mark: What’s the last thing you watched on TV?

Ken: West Wing.

Mark: Scale of 1 to 10. How would you rate your memory?

Victoria: So again, this was awesome. Thank you so much for taking the time to share this with us. It’s just it’s a fascinating topic to me. You know, I have to.

Ken: Come and speak to this group because I’ll light them on fire.

Victoria: Oh, I will, I will. We’ve got you on my short list for sure. Hopefully we’ll be able to get back to live meetings one day, because I think that your energy would, on stage would be awesome.

Ken: Very cool. Now, if you guys are all right.

Victoria: Now, before we let you go, though. I need two things. One is if they want to know more about your books, where would they go?

Ken: Okay. You can actually just say Ken demographer on Google. But, Ken. My website is k g c direct.com.

Victoria: Okay.

Ken: Everything everything’s there.

Victoria: Okay, great. And then last. Last before I let you go, I want you to share with our listening audience your five words of wisdom and why they resonate with you.

Ken: Okay. Demographics precipitates economics. Yes. Really?

Victoria: Okay. Do you want to expand quickly?

Ken: Yeah. What? You know, do you have a CFO? If you ever CFO, why do you have a CFO? You ever CFO to count your money? What is money? Money is a product of something else. And it’s called talent. And. And so why don’t you have a chief human resource officer? Because talent is far more important than money. Demographics precipitates economics.

Victoria: I. I got you. That’s awesome. Thank you so much for being here. We very much appreciate it. And we’ll have you on again if you’re game.

Ken: Yeah. God bless.

Victoria: Thank you.

Mark: Thanks, guys. Take care. Bye.

Victoria: I thought that was fascinating. You know, I mean, I said that 16 times on the show itself, but it just.

Mark: It’s so cool. I, you know, I’ve said this before. We have so many different people that that have so many different specialties and disciplines that. And to hear their passion and to see their and feel their passion for the thing that they do, you know, I mean, to me, it’s, you know, I’m walking into the studio thinking, oh, a demographer.

Ken: Excites.

Mark: Yeah. Right. Yeah. You know, but it’s just like you see him just getting so excited, you can hear it in his voice how it’s like, oh my gosh, the stuff. It drives the world. Yeah.

Victoria: Well, but then and then again, for him to say something as simple as it’s math, it’s not even algebra. It’s just right.

Mark: Yeah.

Victoria: And I don’t really know anybody in our world of small business who looks at demographics that way.

Mark: You. Well, you want to know what my favorite part of what he said was? And that was that besides the fact that our members and our industry is sitting in the catbird seat. Right. You need to start investing now. My favorite part was that he said, you need to start the marketing now, and you need to show people how to stand out, how you stand out.

Mark: Right. And as luck would have it. Yes, I have a new book coming out because you just had to do that. It’s almost like we hired him to do that for us.

Victoria: Yeah, that’s the name of that new book.

Mark: That new book is lobster on a cheese plate. Yep. How to stand out. Attract the best clients. And when every sale that comes your way.

Victoria: And it’s an awesome book, I’m very excited for it to come out. Right. Yeah. I’ve tried.

Mark: You know, he said you got to do it right now. You got to start telling people why you’re the best choice. And I thought that, hey, that’s.

Victoria: Cool that I really got a guidebook right here on how to.

Mark: Do it. Yeah. So I can’t I can’t thank him enough for that.

Victoria: And the show notes, too.

Mark: Yeah, well, sure, we can do that. Ken was great. That was that was funny.

Victoria: And that was very generous of him to.

Mark: Do his memories better than he thought. He remembered.

Victoria: It.

Mark: So that was good.

Victoria: Yes.

Mark: So, as always, we want to thank Ken for taking the time to, share these great insights with us and our audience. And, of course, we want to thank you for listening week in and week out. I am Mark Harari.

Victoria: And I’m Victoria Downing. See you next week.