Steps to Take as the Population Ages

Many trust department managers are recognizing the significant profit potential of marketing to wealthy, older adults in these times of narrowing spreads and the quest for fee-income business, especially in generating off-balance-sheet profits.

Expert knowledge of senior adults and their buying behavior may well be a major strategic difference separating the average and the outstanding financial service of the future. Some see the handwriting on the wall and are doing something about it.

For example, one major financial service has employed a full-time resident gerontologist to help product development managers and marketing management understand senior adults.

Organizations that take such an approach will tend to dominate the future in financial services. They understand that senior adults think differently from the rest of the population. And they understand that you never know what it is like to be old until you are old yourself.

Growth in Senior Market

Trust departments also are in a unique position to be on the leading edge of maturity marketing - the explosive demographic trend that projects the 50-plus age groups will grow 74% in the next 30 years while the under-50 age brackets will grow 1%.

One might conclude that trust personnel -- after many years of handling the investments of wealthy individuals, their estates, and their children's estates -- are skilled in dealing with the specialized nature of older clients.

But there is little awareness or comprehension about the unique nature of the older customer and what that means in dealing with senior adults.

Further, there is little or no formal training in understanding how to deal with an aging process that results in sensory loss, diminished physical abilities, and changed behavior.

Where client-oriented training exists, it is almost completely trust-product training and does not deal with understanding the cognitive processes of the older customer.

Shifting Priorities

This is not a rap on trust management. It is only an indication of where priorities were yesterday. It also reflects the marketing character of trust operations. In marketing terms, trust departments are product-driven, not market-driven.

Trust business development officers, trust administrators, and investment portfolio personnel have a minimal understanding of the buying behavior of senior adults.

In the 1990s, the strategic battleground for retail and trust banking will be the battle for the financial business of the older customer. It will take exceptional programs and exceptional thinking to be the best.

The Diminishing Senses

Trust training needs to emphasize the physical deterioration of the five senses of an older person. Older adults' declining vision means changing written and printed communication for clients; increasing the light bulb wattage in trust reception areas and offices; installing interior decorations that are functional first and elegant second, the opposite of how it is today; and using contrasting fabric so senior clients can distinguish the chair from the carpet when seating themselves.

Seniors' diminished hearing means examining audio factors - Muzak and other office sounds - that inhibit a client's ability to hear a trust officer. It also means monitoring the telephone voices of trust department personnel. High-pitched voices are difficult to hear, especially for older males whose hearing diminishes faster than females. Because of s-sounds and other factors, words tend not to be heard and drop out of conversations, causing the older person to become confused.

Problems in Reading

More than 50% of adults over age 65 have some form of arthritis, so senior clients will probably have difficulty turning pages of a brochure, particularly one printed on glossy stock. Senior adults may have a difficult time reading if type size is too small, if printing screens are used without adequate contrast, and if certain colors of ink are used.

Recognizing and dealing with physical changes in seniors can help, but that is not enough. What is needed further is training in the buying behavior and the maturing personality of the older adult. The key is in understanding those differences and institutionalizing them through special trust-employee training.

Mr. Sullivan is president of Michael P. Sullivan Associates, a bank consulting firm in Charlotte, N.C.

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