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Selling to the Mature Market

These strategies will help you sell to Boomers and seniors.

By Lucretia DiSanto Jones

It seems that while many marketing gurus have scientifically clustered the Baby Boomers and seniors into neat little groups, the line that separates them—and their personalities—may not be all that clear.

Most of us know when the Boomers were born (between 1946 and 1964) and have become somewhat familiar with what makes them tick. And seniors? They’re the over-65-year-old Americans who control a huge chunk of money.

But there’s more to it than that. The youngest Boomers are still “kids” in their early 40s, while the leading-edge Boomers are careening toward 60. That’s a considerable gap.

What’s more, Boomers are also the “Sandwich Generation”—taking care of their own kids on one side, and their parents on the other. And while many of us still think of seniors as those age 65 and older, the venerable AARP, which many still think of as that group for rocking chair-bound senior citizens, now proudly exclaims on its website that “anyone 50 or over can get all the great benefits of membership in AARP.”

What’s an advisor to make of all of that?

“Seniors have a lot of time on their hands. when they make a decision, they will call you back, and you have to reinforce the information.”
—Bill Haraway

Words of caution
“One of the first things people need to become aware of is that [Boomers and seniors] are heterogeneous,” says John N. Migliaccio, Ph.D., RFG, president of the American Institute of Financial Gerontology. “A lot of people lump those who are 50-plus into the senior marketplace. Yet, the two are really different. And they are different within the Boomers and seniors themselves.”

Obviously, there’s a gray area here—no pun intended—that forces the question: Do I market and sell to Boomers, seniors or both?

Once you’ve chosen your path, how do you navigate through the similar but distinct needs and personalities of these two demographic groups? With open ears, mind and heart, and, perhaps most importantly, the patience to go with the flow.

Aiming at both targets
Chad Karl toggles between Boomers and seniors with little difficulty. An 11-year member and two-time president of Southern Wisconsin AIFA, Karl is something of an anomaly. He started his own mutual fund investments at age 12, and when he was 17 was answering his father’s questions about investments.

As with the other advisors we spoke with, 34-year-old Karl gravitates toward Boomers and seniors because he’s comfortable working with them and understands their mindset. Seniors, he says, “know how to save. Their philosophy is a penny saved is a penny earned.” Boomers, however, are more likely to walk right past that penny. “Boomers don’t know the value of saving yet. Most are maxed out on their credit cards and loans. They are living in houses that are too large for their incomes. They are trying to save for college education and retirement,” he adds.

The challenges of the Boomer and senior markets don’t daunt Karl, who uses seminars as his primary prospecting tool. Karl buys mailing lists and sends 5,000 invitations. Follow-up is key. “Before the seminar,” he says, “when they call to make a reservation, you want someone very positive about the seminar to take the calls. Then call before the seminar to confirm the reservation. Maybe call a third time to remind them, ask them if they need directions, and let them know what will be served. At the seminar, as people arrive, sit down and talk with them before you begin your presentation.”

The seminar presentation runs about 75 minutes. He then hands out an evaluation form just before a 15-minute break. “The evaluation is their meal ticket. Once we get them all, I have the restaurant bring the food out. I then go around and set up appointments with people for free one-hour consultations,” says Karl. He usually draws 25 to 40 couples to his workshops and ends up with 17 to 20 consultations. This translates to about a week and a half of appointments.

The difference between the Boomer and senior seminars is the presentation materials. “We talk about their particular group’s needs,” says Karl. With seniors, the topics are likely to include distribution, making money last longer, long-term care, leaving a legacy, health insurance affordability and protecting assets from taxation. With Boomers, expect to discuss accumulation and growth, long-term care, saving for college, saving for retirement, and planning for caring for their parents—all while trying to keep their own lives on an even keel.

Knowledge and referrals
In contrast to Karl, Bill Haraway, a Suburban Maryland AIFA member for most of his 38-year career, focuses on selling to seniors. “The demographics of the country make it possible; there are plenty of motivated prospects. And they have a lot of work to do: They’ve got estate planning they need to do, businesses they’re still running or have family in, grandchildren. There’s tremendous opportunity,” he explains.

The icing on the cake? The ability to pay. “Seniors have more than half the assets in the country,” says Haraway, “so they have the need and the money to pay for the products to solve their problems.”

The right stuff
An abundance of senior prospects doesn’t a successful advisor make. “You have to have good communication and proactive listening skills. You’ve got to have a lot of patience. Seniors have a lot of time on their hands, and when they make a decision, they will call you back, and you have to reinforce the information,” says Haraway.

Seniors are surfing the web in their spare time, which creates a competitive force of its own that advisors have to work against. “They’ve become internet-savvy, so you have to make sure you know as much as they do,” says Haraway.

Seniors are surfing the Web in their spare time, which creates a competitive force of its own that advisors have to work against.

Haraway can rattle off a litany of other things he believes you need to know when working the senior market: product knowledge, of course; asset management techniques; the rules of Medicare and Medicaid; long-term care issues; a good working knowledge of variable, fixed and immediate annuities; and the tax implications of retirement distributions, IRA distributions and minimum-required distributions.

They come with experience
Haraway’s main source of prospecting is referrals. “I’ve tried to target CPAs and attorneys. I get a lot of referrals from them. I do very little seminar selling or direct mail. But you have to remember,” says Haraway, “I have the luxury of being in the business 38 years. If someone is coming in cold turkey, doing some of that makes sense.”

Haraway also has a few key clients that he puts into action, so to speak, in creating referrals for him: “They are my board of directors, to whom I’ll make a presentation on a quarterly basis. I show them a presentation I’ve developed on new ideas and ask for their feedback and for referrals to people who might be interested in it. Half the time they buy the products themselves.”

A self-described joiner, Haraway also insists that if you join organizations and get involved in the community, things will happen. “I don’t directly solicit,” he says, “but I was on the board of directors of a local hospital, and many board members came to me and asked for help with their financial problems.”

Despite Haraway’s nearly four decades of experience, he still meets up with his share of obstacles. Seniors may be older, but they’re not pushovers. “You have to spend more time to earn their trust than you would in other markets. They are much more cautious. You’ll also have to get around the inertia of not making a decision. Another obstacle is the competition in the upper-income market; it’s very fierce. Banks, stockbrokers, accountants are selling products now, so you’d better know your stuff,” he says.

A market for multiliners

David Kaplan, of Newton, Mass., has built a 23-year career primarily as a property and casualty agent. He has worked hard over the last two years to migrate his profitable P/C business toward a financial services practice, without letting the P/C base slip.

He works the Boomer market because he is a Boomer. “I am the market. They’re my peers, so building the relationship comes much more easily,” he says.

Seniors may be older, but they’re not pushovers.

In addition, Kaplan firmly believes that the Boomer market is great for multiline agents. “The 44-to-59-year-old age group is ideal because they straddle the planning spectrum. They still have a need for short-term insurance protection; many still have college-planning concerns; they’re thinking about buying vacation homes; some are think about retiring; some are thinking about estate planning.”

Kaplan also points out that many Boomers, aka the Sandwich Generation, have parents who are facing issues of the senior market, so they’re receptive to discussions about later-year concerns—namely long-term care issues.

Kaplan’s switch from P/C to multiline was finely calculated. “I spent a year putting away enough money to hire an employee and publish a newsletter, so if I gained nothing I wouldn’t be taking anything from my own pocket,” he says.

Kaplan’s marketing plan calls for him to prospect in two markets: his existing P/C client base and his immediate community. He also works with mentors to review his plan. “You need to have someone to be accountable to. It’s easy to slough off problems if you’re on your own,” Kaplan says.

Squeezed for time
A major obstacle to selling in the Boomer market, according to Kaplan, is the time crunch that Boomers constantly feel. Baby Boomers’ lives are hectic. For some, their morning routine includes dropping kids off at school—or maybe even day care—and then dropping a parent off at elder care. That translates into a long sales cycles for advisors.

“I just placed two policies [in February] that I started working on in July, which I believe is a record time for me to get something issued. They kept apologizing to me, so I think it was their time, not mine. It was all done by phone and email. The ability to do business over the Internet is essential to me,” he explains.

Setting time, trust and buying-power issues aside, what products come into play in the Boomer and senior markets? A number of industry professionals shared their ideas on the products—in addition to life insurance—that you should talk about when meeting with Boomer and senior prospects and clients.

Debie Knowles, CLU, CSA, vice president of marketing for Texas-based Standard Life and Accident, says annuities can serve a number of purposes for your Boomer and senior clients. “How you use an annuity really depends on the client’s situation,” she says. “An immediate annuity may be ideal for someone who needs additional income to supplement retirement or Social Security. On the other hand, you may have older clients who have done fairly well, don’t need the additional income, but want to use a deferred annuity to defer taxes, with the intention of leaving that money to children or heirs. There’s a wide range of ways annuities can be useful to senior clients.”

But, according to Knowles, you should be mindful of deferred annuity interest rates. Once an immediate annuity is put in place, the rate is guaranteed for a certain period of time or for the life of the client. However, if a client is drawing the interest from a deferred annuity, the renewal interest rate may go down, and the client may not earn enough interest to meet his income needs.

Annuities may be ideal for your Boomer clients as well, especially those who find themselves without a defined-benefit plan.

Medicare supplement
Knowles also suggests that seniors consider Medicare supplemental insurance to guard against increasing health-care costs. Likewise, older Boomers may want to plan on budgeting for it in their post-retirement years. “A good Medicare supplemental insurance policy can help seniors control these costs,” Knowles says. “Medicare covers the majority of medical and hospital expenses when you turn 65, but a supplemental policy is necessary to pick up those expenses Medicare doesn’t cover.”

Critical illness insurance
Knowles also mentions critical illness insurance. “It is getting attention in the older market in the United States. Most policies have a huge list of things they’d pay a flat-amount benefit for. That money can be used to pay any expense,” she says. “I think people in the U.S. got used to having health insurance taking care of everything; now they realize that there are other expenses that come with being ill that are not covered.”

Long-term care insurance
Debra Newman, CLU, ChFC, LTCP, owner of Newman Long Term Care in Bloomington, Minn., believes that long-term care insurance (LTCI) should be a priority not only for seniors, but Boomers as well. Newman is a member of the Minneapolis AIFA and president-elect of the Association of Health Insurance Advisors, a conference of NAIFA.

“For Boomers, LTC is a planning tool,” says Newman. “They need to plan it in the same way and at the same time that they need to plan for their retirement. Boomers don’t want to hear of the horror stories, the risk. They just need to be told: ‘You don’t have a choice; no one else will pay.’”

• Accumulation
• Distribution
• Growth
• Making money last longer
• Long-term care
• Long-term care
• Saving for college
• Leaving a legacy
• Saving for retirement
• Health insurance affordability
• Caring for parents
• Protecting assets from taxation

On the other hand, Newman says that advisors must approach seniors on an emotional level; it is more of a medical and care-giving discussion. “The opening question,” she says, “should be: ‘Tell me about your family. Has anyone in your family ever needed care?’” You can follow up by asking, “How did it make you feel when someone in your family needed care?”

“Right in that first 15 minutes,” she adds, “they’ll tell you why they want to own long-term care insurance. The agent needs to be willing to listen and be attentive enough to pick up on the subtle reasons they give.”

Newman suggests an assumptive close: “Would you prefer an unlimited or a five-year benefit?” You should expect seniors, and maybe some of the oldest Baby Boomers, to gravitate toward the five-year benefit, with a shared-care feature.

Fortunately, there’s a lot more chatter about LTCI among Boomers now. Their experiences with family and friends have shown them that long-term care can upset their plans for retirement. “What we’re hearing is that the focus is starting to shift to the folks in their 50s,” says John Hancock’s Michele Van Leer.

Some companies are coming up with creative ways to attract more younger consumers. Van Leer points out that some carriers like John Hancock are offering an option that doubles the benefit if a policyholder needs long-term care before age 65 because of an accident. Or if the policyholder dies before age 65, all premiums are returned. “This appeals to the younger consumers,” says Van Leer, who often ask, “’I’ll buy it, but what if I don’t need the coverage?’”


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