Younger investment representatives have difficulties in selling to older investors.
Research for my bank clients shows that the younger the rep and the older the investment customer, the lower the sales closing ration. The exception is if the rep grew up in a household with older relatives such as grandparents, aunts, and uncles.
In training workshops my firm has conducted for bank investment reps, the reps are typically in their 30s or 40s and the customers in their late 50s, 60s or 70s.
It is crucial that bank reps be able to develop trusted business relationships with older investors.
Today, one American in four is over age 50.
In a dozen years or so, one in four will be over 60.
Households headed by people 50 or over -- including empty-nesters older singles, retired couples, and solitary survivors -- hold more than 75% of the assets in this country.
They own half of all corporate stock and two-thirds of all investment portfolios larger than $25,000.
Host of Problems
Bank reps repeatedly tell me of the problems they face dealing with seniors who:
* Are captive to Depressionera thinking.
* Are extremely conservative in their approach to investing, favoring asset conservation and safety over other considerations.
* Seem to have difficulty accepting the advice of a person the age of their grandchildren. (This is complicated further when a female investment rep deals with an older male customer.)
* Have difficulty seeing and hearing.
* Are inflexible -- unwilling to try things that are new.
* Require more time, attention, and follow-up servicing than younger people.
Recent research in gerontology shows that older people tend to be more subjective than younger ones, generating their perceptions from internal cues such as their own lifetime of experiences.
They often resist attempts at persuasion and are less responsive than younger people to reasoned arguments and sales appeals.
Senior adults tend to be more individualistic than younger people and less subject to the influence of their peers.
Bank investment reps often think an older customer's decision-making is being influenced by some "significant other" -- a brother-in-law, a neighbor, an old fraternity brother.
What the reps may miss is that although older investors may seek out such people for information, they tend not to buy on the basis of their recommendations alone.
They make up their own minds, relying on far more information gathering than the rep realizes.
What are the keys to selling older investors? Among them are:
* Understanding the myths and negative stereotypes of the bank investment representatives versus the realities that interfere with the sales processes.
* Being aware of the physical and sensory changes brought on by aging.
* Understanding that as they age, many people change in the way they take in, retain, and recall information.
The myths about aging are problematic if they get in the way of sales efforts.
There are many myths and negative stereotypes in a society that has been dominated by youthful thinking for several decades.
Actually, while our society is getting older, the old are getting younger.
Among the myths and negative stereotypes are that older people are generally not very active.
This has been disproved by the great numbers of seniors involved in exercise programs, volunteer activities, travel, and college and university courses leading to new careers.
A Time Change
Another myth: All older people are alike.
Gerontologists tell us that, while there are many physical, psychological, and emotional changes from birth to age 40, there are as many changes from age 40 to 80.
Also, younger people too often feel that older people are driven by their limitations. For example, a rep may respond to a customer's need for a walker by acting in a patronizing way, as if the customer were not mentally capable.
But aging does tend to reduce strength, stamina, mobility.
Bank investment reps should avoid asking older investors to walk long distances or offering them inappropriate seating. (An older person sitting in a low sofa or chair may wonder how to get up gracefully.)
Also, seniors tend to be more sensitive than younger people to temperature extremes -- they're hotter when it's hot and older when it's cold.
Cold drafts and blasts of heat make it hard to establish a "feel good" situation for senior adults.
Barriers to Communication
Vision and hearing are major causes of communication and comprehension problems.
With aging, the lens of the eye tends to be dull, flat, and yellowish. The problems this creates are glare, difficulty in judging depth, a need for more light, and slowed reaction time.
A bank investment rep should counter by sitting closer, gesturing more, and slowing down.
Hearing loss is gradual, and sometimes unacknowledged.
When hearing problems are suspected, the rep should sit at the same height as the customer, speak slightly more loudly than usual, enunciate clearly, speak slowly, and not change the topic abruptly.
Making It Concrete
One technique that many people have used intuitively in selling to seniors is to sketch investment concepts for them on paper, using key words and symbols.
The investment rep might draw a tree or stairway to symbolize growth, a lock or bank vault for safety, dollar signs or a chart with an upward trend for income, and buckets labeled "taxes" and "nontaxes" for tax saving.
Remarkably, once such a drawing is completed, the customer may often ask to have it, as a key to understanding.
The rep should run the drawing through a copying machine and give the customer the original, stapled to the sales brochure for the fund or investment in question. The copy will help the rep remember what was said to the customer.
MICHAEL P. SULLIVAN President, Michael P. Sullivan Associates Charlotte, N.C.