Plan Sponsors: Are You a Dinosaur or a Lizard? The retirement industry is no longer a dinosaur. It’s evolving to become more like a lizard. Let me explain what I mean by that. The reptilian metaphor seemed apropos, in the sense that dinosaurs are notoriously slow-moving, whereas lizards tend to be quick, lithe and nimble. And lizard-like is how we must view our approach to many things in this industry today because they are changing at a fairly rapid pace. Regulations, plan design, participant communications — it’s all continually evolving, and we hope, changing for the better. And we have to be flexible and move fast if we want to keep up.
One area for plan sponsors to keep a close eye on is the increased use of technology in participant communications. Truth be told, printed materials may have a place in your participant communications arsenal, but here’s the rub — your employee population is increasingly living online. Walk down the street. Ride a bus. Spring through an airport. Check out the tables in restaurants. Everywhere you look, people are immersed in their smartphones. In the 1980s, Madonna sang “we are living in a material world.” Today, she might sing “we are living in a digital world.”
Content is king — online content, that is. So if you’re not meeting your employee population — even the older ones — where they are (in the digital arena), you’re missing an important opportunity to connect with them and engage them in your organization’s retirement plan.
There’s concrete data that bears this out. Callan recently released its 2018 Defined Contribution Trends Survey. Can you guess the top two media channels used by plan sponsors who responded to the Callan survey? If you said email (93%) and their recordkeeper’s website (93%), you’re correct. Astonishingly, the postal mail came in third (81.7%). (Huh, perhaps snail mail isn’t a dying breed after all.) Callan also found that 63.5% of employers use their company intranet for plan communications. Three out of four of these are, obviously, digital.
Clearly, participant communications are increasingly moving to digital platforms, which makes sense in a world where most of us stare at some sort of a screen all day, every day. The jury is still out, however, on whether or not social media platforms, mobile apps, and text messaging are effective forms of participant communication. They’re being utilized, but sparingly compared to email and web-based tools. And most of what we have read concludes that it’s still too early to tell if social media works to reach employees with benefits-oriented messaging. In a sense, social media may be perceived as more of a “leisure time” platform, rather than a place to have a meaningful conversation about retirement plan or other workplace benefits. Said another way, social media is where people go to “decompress” outside of work, so they may see work-related messaging as an “intrusion” on their downtime.
Nonetheless, I think social media’s day as an effective participant communication tool may yet come. I say this because we spend an inordinate amount of time “hanging out” on social media platforms like Instagram, Facebook, and Twitter. Repetition is a key part of driving home a message. So if we somehow combine employees’ social media habits with the right cadence of repetition when it comes to communicating about their retirement plan —without appearing annoying or intrusive — we just might have an opportunity to cut through the noise and make an impact. Perhaps the secret to effective retirement plan communications is to treat it like a marketing campaign and keep pounding that drum over and over (in a fun and engaging way) until it is heard.
According to the Financial Brand, messages are more effective when repeated — an average of between six and 20 times. Here are some commonly used slogans that have been repeated for years, so much so, that the brand association is almost automatic: “Just do it.” Nike began using this slogan in 1988 – it’s now a rebel yell for anyone who wants to get off their tush and smash a goal. “What happens here, stays here.” That famous saying about the Sin City of Las Vegas has been used since 2004. “15 minutes could save you 15% or more on car insurance” is inextricably linked to Geico and its famous green gecko. The point is, these messages have stood the test of time, and now they’re a permanent part of our every day vernacular.
It works for marketers and advertisers – why couldn’t it work in the retirement plan realm, too? Just thinking out loud here.
In any case, if you’re not using digital platforms and online content to communicate with your employee population, or if you could be using it more, why not “just do it”? We’ve written a lot about the effectiveness of video in delivering benefits communications, engaging employees, and getting them excited about their benefits, so that’s one key option to consider.
According to a report from Broadridge Financial Solutions, released last year, here’s another idea: many plan sponsors are moving to cloud-based technologies that allow them to deliver customized communications using an “omnichannel” approach, including digital, mobile and print. Broadridge’s research found that retirement plan participation can be increased by 30% by effectively delivering personalized communications through multiple channels and that an omnichannel approach can save plan sponsors between 10%-20% in annual communication costs.
That bears repeating: An omnichannel approach to plan communications can increase plan participation and save you money. Need we say more?
So, are you a dinosaur or a lizard? The retirement plan world is moving digital, and it’s moving fast. It’s time to plug in.
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