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Economic Behavior...
Boomer Selling: Emotions Gen X/Y Selling: Social
Jack Marrion
December 2013

You increase the likelihood of selling to someone in their fifties or older if the sale focuses on the emotional benefits of the sale.

You increase the likelihood of selling to someone younger than age 50 if you can show how the product will increase their social interaction or if the sales presentation is made in a setting of social interaction.

People tend to organize their goals based on their perception of the future. If one’s perception of the future is nonexistent—they live in the moment—there may not be any goals and the result is more reckless behavior (if we knew a comet was going to destroy the earth next week, I’m betting the consumption of chocolate and desserts would soar and fewer salads would be eaten). However, the future timeline usually gets sliced a little finer than that.

People who perceive their future time as more limited tend to concentrate on fulfilling emotional goals—they want to feel happy and secure or, at least, not sad and vulnerable.

People who perceive their future time as essentially unlimited tend to concentrate on social relationships—they want to enjoy being part of a group with others who share their interests.

What This May Mean for Annuity Sales

If an agent is talking with a boomer, focusing on the emotional benefits may be better than focusing on the financial ones: Buying the annuity means you won’t spend your future worrying about losing your money in the stock market…or, buying the joint lifetime benefit rider means your widow will always get a check. For this age group the emotional benefits of an annuity—less worry and protecting loved ones—may be more important than the financial ones. Agents have known for years that buying life insurance or annuities often has a strong emotional element; all the new research does is confirm this.

For those in their thirties and forties the goal selling aspect isn’t as tidy because a higher priority is placed on forming or enhancing social relationships. What these ages are looking for is a way to connect with similar people. The implication here is that agents and carriers should try to make annuity buying more of a social event. Here are a couple ideas on how to do that.

Both carriers and agents may wish to establish chat rooms on their websites—open to only current customers and pre-screened prospects who can discuss their financial issues and concerns. The carrier or agent would act as a moderator to answer questions. The hope would be that consumers would create social connections with the annuity being the catalyst, thus increasing the likelihood of an annuity purchase by prospects because owning an annuity helps them become a part of the group.

An idea with a more direct and personal touch is to increase the use of customer appreciation dinners/picnics/events and encourage customers to bring their friends and their own adult children. The friends will see that similar people own annuities. With the adult children in mind, an agent could have a special session for “annuity beneficiaries” which would provide an opportunity for socialization with other beneficiaries (and plant the seed that they should be considering annuities for their own retirement).

The goal orientation of older people tends to align with annuities. Older people focus on the emotional benefits of a decision, and an annuity provides true emotional benefits. Younger people tend to make less impulsive and more far-seeing decisions if they are making greater social connections.

The problem is how do you turn annuities into a social experience? Although a couple examples were given, there are no clearcut answers. However, if we keep experimenting, maybe someday we will make it more likely that a 30-year-old puts that extra $100 into a flexible premium annuity rather than spending it at the club. 

Author's Bio
Jack Marrion
provides research and consulting services to insurance companies and financial firms in a variety of annuity areas. He also serves as director of research for the National Association for Fixed Annuities and as a research fellow for Webster University. In 1994 he wrote a book to help banks market investment and insurance solutions to their small business clients. In 1996 he produced the first independent hypothetical return monthly publication comparing all index annuities on the market, and in 1997 created the first comprehensive report of index annuity sales, products and trends, "Advantage Index Product Sales & Market Report" (quarterly). His insights on the annuity and retirement income world have appeared in hundreds of publications. In 2006 the National Association of Insurance Commissioners asked him to address their annual meeting and teach regulators the realities of index annuities. He was invited back in 2009 to talk to the NAIC about the effects of aging on senior decision-making. He is a frequent speaker at industry functions. Prior to forming Advantage Compendium, Marrion was president and owner of an NASD broker/dealer with offices in nine states. Previous to that he was vice president of a life insurance company and vice president of an NYSE investment banking firm. He has a BBA from the University of Iowa, an MBA from the University of Missouri, and a doctorate from Webster University. Marrion can be reached at Advantage Compendium, 2187 Butterfield Court, St. Louis, MO 63043. Telephone: 314-255-6531. Email: marrion@advantagecompendium.com.















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