Tuesday, June 26, 2012

The Aging Consumer and SST

An idealist believes the short run doesn't count. A cynic believes the long run doesn't matter. A realist believes that what is done or left undone in the short run determines the long run - Sydney J. Harris
In a recent book, The Aging Consumer, Aimee Drolet, Norbert Schwarz, and Carolyn Yoon have compiled a summary of a number of research studies regarding how aging affects decision making.  Given our demographics, insights into how our aging population make decisions could help those who are living it as well as those who advise an aging client population.

In one section of this book, the authors explain socioemotional selectivity theory (SST).  The concept is that as people age, their perception of the amount of life time remaining is shortened.  As a consequence, a more limited time for decision making changes modestly the type of information included in decision making and the way it is processed.  In particular, when time is viewed as limited, people tend to be more present oriented.  They tend to seek satisfaction in the moment and are focused on what can be experienced and enjoyed now.

People with limited time are generally more focused on intimacy and embracing value from their social interactions.  Alternatively, when people view time as expansive, they tend to be more future oriented.  They seek future rather than present satisfaction.

According to SST, as time passes and people’s time horizon perspectives become more limited, goals focusing on knowledge acquisition become less salient and goals focusing on emotional well-being become more so.

A chapter written by Ellen Peters reinforces the above in suggesting that older adults tend to use more selectively the deliberative capacity and focus more on relevance and meaningfulness – perhaps more system 1 (intuitive) versus system 2 (deliberative) thinking.  Bringing meaning or using more affective language and presentation methods for older adults fosters the likelihood that they will understand and make prudent decisions.  Also, positive moods tent to lead to more creative and efficient decisions.

See also Richard's Blog on April 26th regarding a method available for your senior clients as a quick diagnostic to help detect potential impairment of their ability to make decisions.  Click on MEMRI for a full version of this guidance.

The application of these ideas suggest that for aging clients, 
  1. Include an acknowledgement/reminder that time is limited.  (Life is short, let's make the best of it...)
  2. Incorporate more emotional content into the key elements supporting the recommended actions.  (How will they be more able to enjoy life, spend time with friends, help charitable causes, etc.)
  3. Use only minimal statistical and factual data for aging consumers and lead with key relationship aspects.
  4. To the degree possible, create positive moods in advance of a required decision which foster a more creative and efficient process.

In your advising - remember - INTEGRITY is it's own reward.

Mark, The Advisor

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