Older adults don't always comprehend logical, linear reasoning because they mis-hear what is said, take in only parts of it, or do not fully understand the concepts. There are three types of techniques for helping customers overcome mental processing errors so that they can follow your linear reasoning.
Managing sound
Some errors occur simply because sounds are misheard or not heard at all. A few tips:
o Identify the hearing deficit and take appropriate measures, such as sitting closer to the client or ensuring other sounds (e.g., music, telephones) are not intruding.
o Raising the volume of your voice is not necessarily the answer. Lower your voice pitch with men; raise it with women.
o Speak slower.
o Rephrase your sentence. Different words have different sounds, and some sounds are easier to understand than others.
o If something is really important, say it three times, each time in a different way.
Managing logic
The longer and more complicated the reasoning, the more likely it is that an older adult will make processing errors. A few tips:
o Keep each step of a linear argument short and simple. For example, it is better to say, "You need more income, and this investment will help produce more income than you are getting" than "You need more income. With a tax-deferred investment you can reduce your taxable income, and that will serve to reduce the taxes you pay on your Social Security income, thereby leaving you with more after-tax income."
When the client asks how the investment will help produce more income, you can then explain that they are now paying taxes they could avoid. When they ask how they can avoid paying taxes, you can then explain that the tax-deferred investment will reduce their taxable income and, therefore, the income they receive from Social Security will be taxed less or not at all. By separating each element of the logic, you make the whole argument easier to digest.
o Separate explanations of concepts from the linear argument. For example, if you need to explain the concept of tax deferral, do it before you make your recommendation.
o Do not introduce new thoughts during linear reasoning. Keep completely focused on the main point.
o Help the client follow your logic by adopting the style news reporters use: Tell them what you are going to tell them, then tell them, then tell them what you told them.
Managing the way information is processed
Linear reasoning calls for the use of what is known as "fluid intelligence," the ability to process information quickly, completely, and accurately. It is in short supply by the time many adults are in their 60s. If the only way in which customers can comprehend your recommendation is through the use of fluid intelligence, many older investors are not going to get it. You need to help them follow your reasoning by giving them anchors as you progress through the logic. A few tips:
o Use relevant analogies. For example, a sports analogy might be relevant for a man, but rarely for an older woman. A sports analogy from the past is more likely to be relevant to your older male client than one that refers to today's teams.
o Use metaphors that transform the topic from being about investments or insurance to being about life. For example, "Investing is like a river. Sometimes it is calm and smooth and everything is easy, and sometimes it is turbulent and everything suddenly seems dangerous and difficult."
o Use references to life experiences. Start a story with "Remember when..." so the client can relate to it. For example, clients who resist equities tend to do so because they think about the market's downside and forget about the market's overall performance during their lifetime.
You might deal with that kind of situation by saying, "Remember when the stock market crashed in 1987? The Dow Jones industrial average lost more than 20 percent in a single day. Remember the dire headlines that made it sound as if the world was coming to an end? Do you remember where the Dow closed at the end of 1987?" (The answer is 1,938.83). "Do you know where the Dow is now?" You are leading the client toward the realization that the market is more than five times higher today. When making your point, use the Dow as an example rather than the Standard & Poor index. Customers are more comfortable with "the Dow" because they hear about it regularly.
Making the sale
Older clients generally take more time to make decisions. They need more time, and they have more time. They're in no hurry. Unlike younger clients who want to get their business done and move on, older clients usually do not have anything else they need to move on to.
In other words, they are going to make their decisions on their schedule, not yours. Often, this means they won't say "yes" at the time you make the recommendation, and they may not say "yes" the next time you talk to them about it. But, at some point they will say "yes" if two conditions are met:
o They do not have a gut reaction that rejects the recommendation
o You do not give up
There's not much you can do if a client has an instinct to reject your suggestion. Instincts are feelings, not rational thought, and you can't overcome feelings using logic. With clients who do not have that immediate negative gut reaction, however, you should be able to make the sale if the recommendation is right.
Here's why:
o Most clients cannot tell a good investment idea from a bad one. They rely on you, as their advisor, to make the appropriate judgment for them.
o If they believe in you, they will eventually say "yes" to your recommendation.
o But, they will only believe in you if you believe in your own recommendation. Artifice won't work. They will sense your real feelings because they are much better at processing emotional information. Or, even worse, they will sense that you don't really care about them, that you are just trying to sell something.
o On the other hand, if you are persistent, it will tell them that you truly believe in your recommendation and that you do care about them. And, in the end, that is why you will make the sale.
Michael P. Sullivan is president of 50-Plus Communications Consulting, based in Charlotte, NC. He is the author of "101 Easy Ways to Increase Business with Boomerplus Clients!" For more information, call 704-554-7863 or visit www.graymoney.biz.
