5 themes to focus on when talking pensions

Successful DC pensions communications from around the world
By Teresa Morgan
|Canadian HR Reporter|Last Updated: 05/24/2011

When it comes to pensions communications worldwide, five common themes make successful campaigns stand out: simplicity, creativity, focus, segmentation and personalization.

That’s according to a 2010 study by a team of defined contribution (DC) pension communication and education experts from Canada, the United States, Australasia and Europe on behalf of Spence Johnson, a provider of marketing intelligence based in London.

They collected and compared examples of excellence in DC member communications that delivered concrete, demonstrable results.

Although many pertinent themes were identified from the analysis of almost 100 campaigns in nine countries, a few key ones — for today and the future — emerged to help the campaigns stand out from the rest:

Simplicity: No matter what the medium used in communications, clarity and concise brevity in the message are still important. The future will see much more simplification in the delivery of plain messages. Jargon and glossaries will cease to exist and non-essential information will become part of secondary communication delivery channels.

Creativity: The ways in which an idea is designed, expressed and presented are vital in conveying a message. Words, pictures, sound bytes and graphics are examples of commonly used tools. Creativity and high-quality communication design will increasingly become standard. Emerging channels such as social media will need to be integrated into the message.

Focus: It’s important to prompt members to take action at key life events such as birthdays or changing jobs. Systems and triggers are used to help identify this type of call to action. In the future, communications will be designed to rigorously influence specific member behaviours, with a focus on moving away from automatic member enrolment.

Segmentation: Segmentation is not merely about age anymore. Other indicators are emerging, such as member activity levels and how often a segment uses a website. The focus is more about better targeting to convey the right message to the right people at the most opportune time. Data will evolve to be mined towards a focus on behaviour and member activity rather than age-based distinctions.

Personalization: Members respond best to information personalized to their specific and unique circumstances. Personalization is the next-best tool in use outside of face-to-face communication. Messages will become increasingly unique to the members receiving them. They will be in control of what they receive, when and through what medium. This will require more skilled resources than currently available.

A look at two successful campaigns illustrates the use of these themes:

Vanguard – personalized profiles

Personalized profiles are targeted education campaigns using participant data such as salary, plan balances, defined benefit projections, social security, tax exemptions and other personal information to generate custom reports designed to motivate participants and promote retirement readiness.

Vanguard, based in Valley Forge, Pa., conducted five types of personalized profiles campaigns:

Enrol: Encouraging eligible employees who were not participating to join the plan.

Save more: Motivating participants to save more money in their employer’s plan.

Asset allocation: Prompting participants to review their fund choices.

Total retirement: Prompting employees to analyze their overall retirement readiness.

Target retirement fund: Prompting employees to review their fund selections in their employer’s retirement plan and recommending a date-specific target retirement fund.

Throughout the campaigns and beyond, Vanguard used mail, phone and the Internet to reach current and potential members. One of the campaign’s most innovative aspects was the combination of personalized analytical tools with life-stage behavioural segmentation — a good alternative to automaticity.

As measures of success, the enrol profiles saw 11 per cent of the target audience joining the plan at an average savings rate of seven per cent.

Nine per cent of the target audience of the save-more campaign increased their savings rate an average of three percentage points. And for total retirement profiles, eight per cent of the target audience increased their savings rate an average of five percentage points.

The campaign was also a success because the profiles integrated plan rules and participant-specific data to provide personalized action plans. In just one page, participants were able to see their progress towards a secure retirement and were provided with the guidance and tools needed to make any necessary adjustments.

Trinity Health – Changes to fund choices, employer match

This campaign was about communicating significant changes in the fund offering of the plan. All of the asset allocation funds offered were being eliminated and account balances were being transferred from the underlying investment funds into the plan’s core funds. Additionally, Trinity Health wanted to promote the tools and services available to help associates save for retirement at a time when the employer match was being suspended.

The campaign consisted of flyers and newsletters but one of the most innovative elements was the combination of face-to-face guidance with clever give-aways, which helped reduce complexity.

Visuals and low-tech posters helped people easily understand the complex changes the plan was proposing. There was little need for call centre support due to the effectiveness of the flyers and newsletters.

The use of lunch-and-learn sessions and one-on-one meetings was helpful in reducing the complex and concerning change message to a manageable one.

Given the broad spread of company locations and the number of members, this was an effective campaign that overcame barriers.

Success was evident in the US$260 million mapped out of the asset allocation funds and 29,935 individual transfers completed after the fund changes were in effect.

Moving to action

Through a renewed focus on member data collection, mining and analysis, there are commonalities, attributes and enablers that emerge and lead communication experts to design, develop and deliver communication strategies at a scalable level, resulting in improved effectiveness and cost-efficiencies in member communication and education.

Increasingly, the communications will involve very complex processes, such as managing message consistency across a multi-channel campaign. They will also involve more technical skills in data mining, segmentation and personalization of messages.

Communications professionals must do a better job selling their abilities to help transform the pensions landscape in the future. To do this, they need to be far more rigorous in measuring the impact they make and the value they deliver.

Many in the U.S. (more so than other countries) seem very pessimistic about the ability of communications initiatives on their own to persuade people to join a scheme, found Spence Johnson. But this project proves communications success is clearly achievable — communications professionals just need to do better at collecting and demonstrating proof.

Members are in fact, unique, with specific, individual needs. To develop and implement a comprehensive and successful education and communications program that leads members to proactive and timely action will require the industry to refocus its communication energies not on general education, but on education and information that relate specifically to a member’s individual needs.

Teresa Morgan led the Canadian portion of this Pension Communications Project study on behalf of Spence Johnson. To learn more, visit http://spencejohnson.com/ PensCommsProj2010.html.

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