Seniors Squarely in the Sights of the Insurance Industry … and Just About Everybody Else

Because American seniors typically transition from employer health insurance to Medicare, it makes perfect sense that a “senior market” exists in the insurance industry’s eyes.

Medicare, it is well known, falls far short of meeting every healthcare need a senior is expected to encounter over the years, and the insurance industry has stepped forward to offer a variety of health plans and services designed to meet senior needs that Medicare does not meet.

There is a lucrative senior market for Medicare supplement and Medicare Advantage plans, prescription drug plans, dental plans, hearing plans, and more … and it makes perfect sense that the health insurance industry is giving so much attention to the earning the trust and gaining the business of seniors.

In any sector, a successful approach to doing business generally can be explained in a few simple sentences:

Locate a need (or a void). Identify a market for that need. Introduce a product or service to meet that need.

Finally, under ideal conditions: Watch the money roll in.

Of course, that’s seldom as easy as it sounds. Many enterprises fall far short when it comes to introducing products and services people are able and willing to spend money on. Such enterprises often are successful at identifying needs or voids in the marketplace that can be capitalized on. They may even have good products or services to offer that address those needs and voids. But for some reason their target markets aren’t buying.

Why not?

Often it’s simply because they don’t know their target market.

Try selling candy to a child, and you’re not likely to have much trouble getting your share of his or her allowance. But what if you decide to introduce vegetable-flavored candy to that same child? Give her a choice of onion-, broccoli-, or carrot-flavored little bits instead of those balls of sugar other businesses are targeting to kids.

Chances are you’ll lose that customer. And a lot of others.

It’s as important for an enterprise to know its target market as it is to have a good product. Target that same veggie candy to kids’ moms and you may have a chance. Target it to those same moms in a way they find appealing and convincing, and you’ve got an excellent chance. But to target any product or service successfully to any market, you’ve got to know that market very well.

As far as the senior market goes, it’s clear people over 65 are squarely in the sights of marketers dealing with products and services in nearly every area of the economy. The over-50 crowd is often lumped in marketers’ minds with the senior market because over-50s will be the next wave of seniors … and people in their 50s who are retired may already match up fairly well with seniors as consumers.

The number of Americans turning 65 has exploded in recent decades, and the explosion is far from over. The United States Census Bureau reports that “the Baby Boomer generation is now turning 65 at the rate of 10,000 people a day.” Or, as the KBM Group, associated with the Wunderman Network of advertisers and marketers around the globe, puts it: “From now until 2025, someone in America will turn 60 every seven seconds.”

Whichever way you look at it, the senior market is growing in a way few target markets have ever grown before—and you can bet almost every entrepreneur or business serious about making money in the current marketplace has noticed.

CSA and KBM/Wunderman are prime examples of a new sort of player in the modern marketplace. Both of these enterprises, along with their competition, are aimed at helping other enterprises maneuver successfully in the senior market. Pointing out that seniors “control 77% of the nation’s wealth,” CSA offers its services to companies wanting to target the senior market and its substantial assets with success.

KBM does much the same thing, and in 2010 published a booklet titled Capturing the Exploding Senior Market: 23 Rules for Targeting Seniors.

Among those rules:

• • • Target females … they make the decisions
    • Don’t use humor about aging
    • Don’t be overly friendly
    • Don’t talk to them like children
    • Be gender-specific
    • Don’t use scare tactics

“Rules” such as these aren’t hard to support. As far as the “target females” rule is concerned, women do tend to make most of the financial decisions in most households, so giving extra focus to them makes sense.

Let’s look at a few of KBM’s other rules:

According to KBM, “As a group, seniors see themselves as seven to 10 years younger than they really are. Think of it this way: 50 is the new 40, and 60 is the new 50.” Speaking about more than 80 million baby boomers, KBM says, “They aren’t their parents. They don’t feel old, they don’t want to get old, and they resent anyone who treats them like they are.” Rightly or wrongly, KBM suggests that reminding seniors about their chronological age is a bad move for businesses targeting the senior market.

KBM is correct in advising potential clients that “there are many seniors who have no income but have plenty of money.” While seniors, according to CSA, do have a per capita income 26% higher than the national average, it is their household net worth that sets them apart. CSA figures show the average household net worth for married seniors is $385,000, while for single seniors it is $152,000. With higher-than-average assets, of course, come higher-than-average expenditures. While Entrepreneur.com suggests “seniors are a tough crowd” when it comes to marketing and selling goods and services, every indication is that seniors are active shoppers for goods and services they see real value in having.

Here, KBM is offering advice useful to marketers targeting any demographic. But, as Entrepreneur.com explains, seniors are particularly shrew buyers who often need convincing. “Puffery is wasted on them. They’ve seen it all when it comes to advertising. Today’s octogenarian grew up listening to radio and watching six decades of commercial television. As we mature, we become much more savvy consumers and are more likely to ask ourselves ‘do I really need this?’ than, say, a 14-year-old.” Most seniors have worked hard for that nest egg, and many want to know exactly what they can expect to get for their money. As KBM’s 23 Rules points out, marketers shouldn’t assume seniors will easily be convinced that a product will benefit them, and taking shortcuts in making those benefits clear isn’t likely to increase sales.

This may not sound like a rule, but KBM goes on to suggest such steps as sparing seniors the indignity of having their phone calls taken by answering systems and not humans, and being sure to “deliver on the promise of a click.” KBM advises, “Don’t la­bel a navigation element ‘get a quote’ and then take the users to a page that requires them to download a PDF, print it, fill it out and mail it via snail mail. The vast majority of them won’t do it.” No one wants to feel tricked, and seniors may be the hardest demographic of all to convince when it comes to putting trust in a product or service. As Entrepreneur.com puts it, “If older Americans are as brand loyal as they’re made out to be, then the American auto industry certainly would not be in such dire straits.”

“Lumping” refers to making assumptions that all members of the senior market share the same market characteristics or tendencies. While the term “senior market” on its own seems to suggest that such assumptions must be valid at least to some degree, KBM and others point out that excessive “lumping” will only reduce a company’s chances of success in marketing products to seniors. KBM advises potential clients that “the job of marketing to seniors is complicated by the fact that no one can clearly define what a senior is. The senior population is wide and varied and is in reality made up of subgroups based on age, attitudinal information and behavioral data. Each factor affects the direction of a marketing campaign — as well as its success.”