Feature | Published in May 2017

Custom Messaging for the Masses

Get better results by personalizing education and communications 

By Judy Ward | May 2017
Art by Yuko Shimizu

Recordkeepers have joined the digital marketing trend so successful for the likes of Amazon and are using personalized data to more effectively engage consumers. In this case, the goal is to sell participants of defined contribution (DC) plans on the benefits of saving more for retirement.
“Fifteen or 20 years ago, participant communication happened [via] these great big enrollment booklets. That was the focus of the marketing and communications for a plan,” says Jennifer Putney, vice president of participant engagement at Prudential Retirement in Woodbridge, New Jersey. “It has evolved since then. Now, there is a huge push to use personalized data to make the communications more specific to each individual and to rely on digital platforms to allow that communication to happen.”
Another firm, Fidelity Investments, is focusing much of its attention on “3D personalization” of its participant education and communications, says Eden Zeek, senior director, workplace marketing at Fidelity in Covington, Kentucky. That means gathering and utilizing personalized participant data along three dimensions: the participant’s current plan participation, including deferral rate and asset allocation; his demographic data such as age; and his current engagement with the plan, such as whether he has contacted the Fidelity call center recently with a question.
That personalization effort “has been a game-changer for us,” Zeek says. “Per­sonalization is what allows us to engage those people who are unengaged: It grabs their attention. When we use personalized data in targeted communications, the ‘take action’ rate of participants is two times the rate [of] when we send more general messages.”
Three Approaches That Get Results
Recordkeepers can utilize individual participant data in several ways in customized communications, to help convince participants to save more. These strategies include:
1. Show the impact. In Prudential’s experience, Putney says, showing participants two specific illustrations of how deferring more will impact what they save will help sway them the most. “No. 1 is the impact on the person’s paycheck. That is usually the first question low-savers have, mainly because they are often lower-income employees, and they have much more competition for every dollar of income,” she says. “Parallel with that is to show the participant the effect over time of that 1%, 2% or 3% savings increase on his projected monthly retirement income.”
It helps to show people how the compounding effect of a savings increase can make a big difference for them in retirement, Putney says. “Most people don’t understand compounding, and they don’t think about the impact in the long term of saving more,” she says. “They think, ‘Another 1% probably is not going to make all that big of a difference.’”
When demonstrating the impact of an increased deferral, reframe the issue for the participant as “less about some future balance and more about the income that balance will generate. The outcome is the income,” suggests Karen Eisenbach, chief business marketing officer at Voya Financial in New York City.
Additionally, illustrating the employer-contribution money that a participant loses by saving under the match level often makes a big impression, says Chrisinda Mowrer, Voya assistant vice president, consumer engagement and loyalty, also in New York. “Show the participant how much money he is leaving on the table,” she recommends. “You can show them how much more they could save over time by making that deferral ­adjustment.”
2. Take cues from trigger events. Wells Fargo Institutional Retirement and Trust has seen good results from personalized “trigger campaigns,” says Jon Graff, senior vice president and participant services director in Charlotte, North Carolina. For example, the recordkeeper can send emails to participants on their birthday, encouraging them to use the occasion to improve their retirement outlook. “With these trigger campaigns, we are seeing [email] ‘open’ rates of 47% on average and ‘take-action’ rates of 17%,” he says.
Wells Fargo’s system also can identify a participant who has just paid off a plan loan. “So we can tailor a message to that person to say, ‘Congratulations, you just paid off your loan. Have you thought about starting to contribute to the plan again?’” he says. “That way, they get their pat on the back. And we don’t want to give them time to potentially fall into a bad behavior, where they just spend that money instead.”
Similarly, participants experiencing a major life event tend to be more open to thinking about how to improve their financial future, says Sylvie Feist, director, financial guidance services strategy at Bank of America Merrill Lynch in Hopewell, New Jersey. “That is a perfect time to reassess where they are,” she says. For example, a participant who contacts the Merrill Lynch call center to add a newborn child as a beneficiary could receive a follow-up email on deferring more salary.
But Feist adds a caution. “It’s really important, if you are going to do a personalized message, that you get the message right,” she says. For instance, a woman who submits a change in her last name to a recordkeeper has not necessarily just gotten married—she may have just gotten divorced. “You don’t want to turn a participant off because you got the data wrong,” she advises.
3. Make peer-group comparisons. Showing a participant data that compares how well he is saving for retirement versus a peer group often motivates people to save more, Transamerica finds. “It’s natural that everybody wants to be successful, and we all have a competitive gene in our bodies,” says Blake Bostwick, executive vice president and chief operations officer (COO) at the firm in Denver. “People are interested to know, ‘Am I beating people in my peer group?’ It’s a powerful tool when participants have that comparison with others like them.”
Wells Fargo recently rolled out its “How Do I Compare?” tool, which allows a participant to benchmark—compared with a peer group saving at sufficient rates—his progress. “We pull data on peers of theirs from across our book of business—people of a similar age and salary makeup—who are on track to replace at least 80% of their pre-retirement income. Then we show the participants, ‘Here is what your peers are saving, and here is what your peers are on track to have in retirement income,’” Graff says. “People want to be like those people who are on the right path. They see this data and think, ‘If somebody my age who is also making $40,000 a year can do it, I can.’”
Participants have a natural curiosity to find out, “What are other people like me doing?” says Steve Jenks, chief marketing officer at Empower Retirement in Denver. “So we show somebody how they compare versus their peer set—using factors such as age, gender and income—not just in terms of the average peer but also the top 10% of people who are similar to them,” he says. “We want to show them not just what the ‘C students’ are doing but what the ‘A students’ are doing.”
The Mechanics of Personalization
Recordkeepers usually include personalized participant education campaigns as part of their overall fee. Beyond helping recordkeepers get the data they need, employers play a big-picture role, while providers do the legwork. “Typically, the sponsor reviews our strategy and content before deciding to opt into the program,” Zeek says. “And sometimes we get feedback from a sponsor on particular groups of employees the sponsor wants to target.” Sources offer several tips for performing a successful personalized campaign:
• The format makes a difference. When conveying personalized data to a participant, Putney says, in-person meetings get the best results. “When participants sit down with one of our retirement counselors, we see better than a 75% action rate,” she says. “A close second is email. We have pretty good evidence from our research with participants that they have a strong preference for getting written information about their plan by email.” Group meetings get the third-best outcome, she says, and home mailings to participants yield the least results.
• Timing matters, too. When participants get these messages affects their willingness to act. “Think about what time of the year, time of the month, time of the week and time of the day are best to contact people with these messages,” Bostwick suggests. “There is a whole science of when and how to best connect with people, from a timing perspective.”
For instance, he says, participants’ receptiveness to emails about saving more varies during the year. “Our ‘open’ rates on emails are strongest in the first and second quarters and the lowest in the third and fourth quarters,” he says. “At the beginning of the year, you have a fresh start, and that also is when many companies pay incentive compensation. Then the open rates taper off in the third and fourth quarters, because life tends to happen.”
• Convey the data’s upshot simply. When Transamerica wants to show participants their prospects for being able to replace 80% of their income in retirement, a symbol of a rainy, cloudy or sunny day accompanies the data, depending on that participant’s outlook. “This is a pretty simple and easy way for people to really comprehend this complex area of retirement planning,” Bostwick says. “And it gets people to react. Everyone likes a nice, sunny day.”
For the plan sponsor to create traction, giving participants personalized data needs to go hand in hand with showing them a clear path to better results. “Make it very simple for them: Suggest one action they can take,” Jenks says. “We have learned that if we do a campaign that asks people to do two or three things, we won’t get as good a response as if we do a campaign that encourages them to take one action.”
Fidelity ideally wants to see participants saving at 15% but realizes that goal may need to be broken into multiple steps and spread out over time, Zeek says. “If someone is contributing, but not enough to get the full match, we encourage that participant to not miss out on the free match money. But if someone is not contributing at all, we will encourage that person to start by saving 1%,” she says. “We’re trying to break down for each person what feels like a manageable next step.”
• Keep the tone encouraging. Tone plays an important role when sharing with a participant personalized data that he could see as discouraging, Jenks says. “We try to emphasize the positive and that people can take action now,” he says. “It’s important to take a tone of optimism, a tone of possibilities.”
The industry’s retirement-outlook tone has evolved over the decades. “Many years ago, in the ’80s, there was kind of a scare tactic approach of: ‘You are not saving enough, and you are not going to be prepared for retirement,’” Feist says. “People don’t like doomsday messaging. People are looking for help, and they like gentle nudges. People like to be told, ‘Hey, you are on the right track, and here are some things to think about that could give you even better results.’”
How Employers Can Help 

Recordkeepers have developed much stronger tools by which to analyze individual participant data and predict the next best step a specific participant could take to improve his retirement-savings outcome, Voya Financial’s Karen Eisenbach says. But recordkeepers need the employer’s help to do that data analysis and then share it with participants.
“One main barrier to all of this has been the ability of employers to provide us with the data we need,” Eisenbach says.
“Sometimes, it’s just an issue of their ability to provide us with the data, and sometimes it’s an issue of their understanding what giving us the data will get them.” Employers may hesitate to share what they consider private data about employees, she explains. She hopes that more talk in the industry about how personalization can help lead to better participant outcomes will help reduce that reluctance.
“From a personalization perspective, we are only as good as the information we have to utilize,” says Chrisinda Mowrer, of Voya. To do good personalized campaigns, recordkeepers need the following key data about a participant from his employer, she says: age; tenure with the company; salary; and email address. —JW