Data and Metrics


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The Enrollment Challenge

Retirement readiness decisions are a daunting task for most employees. According to a 2012 Participant Engagement Study conducted by Lincoln Financial:

  • 41 percent of employees are only somewhat engaged or fully disengaged from any retirement plan
  •  7 percent of employees only are fully engaged and interact with their retirement plan on a regular basis.

Plan communication and education can provide people with the financial knowledge needed to better understand their employee benefits and make better enrollment decisions to achieve better outcomes.

Communication Is Key

The U.S. Employee Benefits Security Administration’s ERISA Advisory Council published a key report in 2010 on how plan communication practices and design options impact participation and contribution rates. They researched strategies for tailoring communications to different subgroups of employees through direct communication, and their effectiveness in influencing participants of diverse demographic market segments, including segments categorized by income level, household status, generation, gender, and ethnicity.

The report then provided recommendations of best practices for enrollment that are statistically proven to be effective, including education to plan sponsors on specific proven techniques and communication practices. In evaluating what communication methods are most effective in encouraging participants to save for retirement, the following considerations were made:

  • Cost: an effort was made to balance the need for comprehensive plan communications against cost.
  • Delivery: A variety of methods were explored including the use of current and emerging social media.
  • Plan Design: The study reviewed how plan designs relate to increasing participant enrollment and savings. In particular, the Council studied the use of automatic features. Automatic enrollment plans automatically choose the employees’ contribution percentage and enroll the participant in an investment vehicle. This raises participation rates to close to 90 percent. However employees enrolled at low contribution rates of 3% or less tend not to deeply consider or increase their contributions.

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9 Recommendations and Best Practices

The Council found that effective plan communication and education can provide people with the financial knowledge needed to understand their employee benefits, make better financial decisions, and achieve better outcomes.

Given that the most successful plan communications make use of many channels from print to external websites, online tools, social media, and creative marketing, the Council highlighted best practices that balance personalized, targeted content to help employees evaluate benefit offerings with cost efficiency. They highlighted specific techniques and communication practices that have been statistically proven to be effective in increasing the involvement of employees in saving for retirement. The following are 9 recommendations:

  1. Communications tailored to particular segments drive results
  2. One-on-one or small group meetings increase participation
  3. Immediate “on the spot” communication is most effective
  4. Short, simple and focused communication drives participant response
  5. Multiple “touches” with various creative formats increase participation
  6. Increased technology use is effective and cost efficient
  7. Behavioral economics and “social norming” can increase participant involvement and savings
  8. Incentives given by sponsors and “gamification” help trigger participant involvement
  9. Responsive marketing principles may assist plan sponsors in improving communications

Here is a brief synopsis of these 9 practical recommendations and some best practices:

1. Communications Tailored to Particular Segments 

tailored-skill-development-imageThe Council found that communications that target participants based on their interests, background, and/or economic status were more successful than the “one size fits all” approach.

Understanding the culture and background of the workforce being targeted is key. For instance, since Hispanics will soon constitute one-third of the US population, Council member Donna MacFarland of Lincoln Financial Group stated that in her experience education materials typically are translated from English to Spanish, whereas she recommended that sponsors design the material using the reverse approach, developing  materials first in Spanish to address specific cultural needs and language differences.

Human Resource professionals also have found that allowing employees to map out an action plan rooted in realistic scenarios is an extremely effective tool. Some plan sponsors have successfully used a “three-pronged” approach to reach out to their participants by combining simple income replacement projections, behavioral finance strategies and a personalized message. For example, JP Morgan developed 36 different personas based on three age groups (younger than age 30, age 30-50 and older than 50). The firm also targeted participants based upon their regional median income (e.g., Kansas’ median income is $30,000 while in New York City it is $70,000). The basis for this approach was to enable these groups to compare themselves against their peers and take the appropriate action toward saving for retirement.

By narrowly tailoring their target audience on behalf of the plan sponsors that retained them, JP Morgan subsequently monitored whether employees opened their email communications and took action toward saving for retirement. If the individual took action, that person was considered “active,” while someone who opened the email but did not take action was considered “interested.” Based upon the action taken by the individual, the participant received specifically targeted information. This technique resulted in three to four times the response rate of participants who were not targeted.

However, some witnesses advised that there is a general concern regarding the use of targeted communications because complex data collection may provide gender or ethnic identification. Thus, there is concern over whether specific segments identified based upon race or gender could raise discrimination or deferential treatment issues. The Council heard testimony from Donna MacFarland of Lincoln Financial and Thomas Ryan of Fidelity that the use of particularly sensitive demographic information causes concern among plan sponsors. There are also practical concerns about housing information technology. Nevertheless, the overwhelming opinion received during testimony was that targeted communications work.

Branding helps targeting through the use of communications that include a unique positive image that is the group can relate to.

Here are some best practices of participant-centric communication methods:

  • Best Practice 1 – The Power of Example: Trustees of the Elevator Constructors 401(k) Plan used materials featuring the story of three employees who made different savings decisions during their careers. The narrative of the three employees was used throughout one-on-one sessions with printed materials to demonstrate how a 401(k) contribution would benefit participants in a variety of circumstances including temporary layoffs, hardships and early retirement. As a result, plan participation rates increased from 26.56 percent to 29.82 percent in 2011. The plan also experienced an 85 percent increase in plan activity from meeting attendees.
  • Best Practice 2 – Employer/Employee-Centric Content: M.A. Mortenson Company, an international construction firm, employed construction-related themes in its financial education to engage participants and foster pride in the company. Financial education was made mandatory and workshops were divided by career stage, age, and gender. The plan sponsor focused on participants’ preferences by surveying them after the workshop and making recommendations based on their feedback to yield desired results.
  • Best Practice 3 – Bilingual: Consolidated Citrus Limited Partners wanted to 1) increase attendance at plan educational meetings, 2) increase plan participation, 3) increase deferral rates and 4 encourage participants to maximize their match. Ninety percent of the workers spoke only Spanish, and the majority of their day was spent in the orange groves. An in-language campaign was initiated. The company’s Spanish speaking leaders met with small groups in the orange groves. Straightforward collateral in both Spanish and English Collateral were available on site, including announcement posters. By bringing the meetings to the employees, 95 percent of the targeted group attended the meetings. Plan participation increased from 40 percent to 75 percent and deferrals expanded from 4 percent to 8 percent.
  • Best Practice 4 – Branding: The Animation Guild 401(k) Plan was implemented for artists working at Southern California animation studios. The sponsors worked with the Guild’s representatives to obtain insights and develop a branded communication urging participants to remember to enroll. The response rate increased over eight percent from the previous year, with 135 new enrollees. Another employer cited in the research increased participation by 30 percent by keeping the message fun, simple and “cool” to target younger workers.
  • Best Practice 5 – Multicultural: The Four Seasons 401(k) Plan needed to convey an important plan change to an employer profit sharing employer matching contribution. The sponsor obtained feedback from bilingual meeting presenters in designing the campaign, and provided materials tailored to Hispanics and presentations also were created in Spanish designed to be culturally and linguistically accurate. As a result, the average deferral rate of the targeted group rose from 2.9 percent to 5 percent, and significantly increased beneficiary designations.

2. One-on-One or Small Group Meetings 

OneonOneAfter a study by Lincoln Financial found that 66% of participants prefer one-on-one guidance, Lincoln made it a component of its financial education model. They found that the need for individualized information is particularly acute for groups with low participation rates, including women and minorities.  Various studies have shown good enrollment and contribution results when employees request in-person group workshops facilitated by financial experts.

  • Best Practice for One-on-One Meetings:In 2012, MassMutual representatives spoke with 150,000 employees in face-to-face meetings. Forty-six percent of these individuals took action to improve their retirement readiness and, in one-on-one meetings, 75 percent of employees took action.
  • Best Practice for Small Group Meetings: Costs and timing may prevent plan sponsors from providing one-on-one meetings, but small group meetings and audience segmentation have also been successful. The FINRA funded Nurses Investor Education Project had small group meetings for well-educated nurses interested in taking action toward their retirement. They found that generally, the nurses’ lack of basic knowledge, or their perception that they did not know enough to attend these sessions, prevented them from attending their plan sponsor’s meetings. As a result of using small group meetings as a forum, the nurses perceptions changed and attendance at their employer’s retirement plan sessions improved.

3. Immediate “on the spot” Communication 

onthespotThe ability for participants to take action at the time they are thinking about retirement savings is more effective in increasing enrollment. For example, having computers in the room at the time employees are learning about the plan would allow them to sign up and take immediate action.

  • Best Practice: A US Army mandatory financial management course found that providing the enrollment forms for the Thrift Savings Plan during the financial management course resulted in a sizeable increase in participation, with soldiers signing up for the Plan before leaving the classroom.

4. Short, Simple, Focused Communication 

focusedBehavioral studies show that the most effective communications use simple, straightforward language specific to a participant’s personal situation.

  • Best Practice: Time constraints mean that any impediments to action should be identified and mitigated. For example, on a website, any extra step, such as the need to retrieve a PIN, may prevent employees from taking action. Solutions include sending the PIN directly to their email account or a mobile number, or mailing a postcard with the website’s uniform resource locator (URL).

5. Multiple Touches With Various Creative Formats 

profileConsistent, continuous and on-going meaningful communication can be achieved by repeatedly sending out simplified mailings. Social media can help alleviate the cost of additional touch points, and yet, few companies use social media channels for retirement information.

  • Best Practice: The Council’s Professor Madrian cites a company in which the third mailing of a simplified reply form requiring the checking of a box to enroll doubled enrollment from 22 percent to 45 percent of non-participating employees.

6. Cost Effective Technology 

advancement-of-technologyEvery demographic group is now using the Internet as a preferred source of information, via home computer or mobile devices. In addition, electronic media provides the ability to track responses, which is unavailable when the communication is sent through printed materials and regular mail. Another cost effective technological advance is Dynamic Page Publishing,  reviewed at the conclusion of this article.

A Deloitte study in 2012 that found:

  • 93 percent of Americans place Internet access as the most valued household subscription;
  • 54 percent of Americans own smartphones, and the rate is increasing 29 percent annually.
  • One of three Americans over age 50 has downloaded an application to a smartphone, and 28 percent access their bank accounts via smartphone.

Engaging Millennials: Electronic media is the most effective method of communication to engage younger generations in retirement planning, including Generation X (born between 1965 and 1979).  In order to combat inertia caused by competing financial priorities, such as student loan debt, it is important for this group to be engaged through “YouTube” videos, Facebook forums, Twitter, email and mobile delivery, including providing “one click” transactions and incorporating elements of “gamification.”   Millennials also demand simple, personalized, and action-oriented communications, and prefer human contact for complex tasks.

  • Best Practice – Email: Thomas Ryan of Fidelity Investments testified to the Council that Fidelity makes all channels of communication accessible, and finds that email communications have generated higher response rates than direct mail.
  • Best Practices for Engaging Millennials – Fidelity: Fidelity has studied the preferences of Generation Y, or “Millennials”  for using electronic communication, and found that this group tends to rely heavily on the Internet to interact with representatives from Fidelity, although they appear to be the least engaged when it comes to the frequency of contact. Millennials serviced by Fidelity have the lowest 401(k) participation rate, at 58 percent, compared to 67 percent for all other populations. Design changes made to simplify online interaction with Millennials resulted in a 40 percent increase in web utilization by this group.
  • Best Practices for Engaging Millennials – Putnam: Lori Lucas of Callan Associates discussed Putnam’s roll out of a plan primarily for Millennials that encouraged participants to bring their tablets to an nteractive meeting to log on to the benefits website. As a result, 40 percent of attendees increased their deferrals within 90 days after attending the meeting.
  • Best Practices for Engaging Millennials – MassMutual:: Offering enrollment and savings increases using iPod Touch devices in group meetings resulted in action rates of 85 – 90 percent among those attending. The use of targeted and tested mail and email campaigns resulted in $150 million in new deposits over three years and a 3.9 percent increase in action rates.

7. Behavioral Economics and “Social Norming” 

choiceThe way certain information is presented can have a resounding impact, including the way choices are presented to the participant, a method referred to as “anchoring”

Presenting options in a different order or with a higher default percentage has increased deferral rates. While communications traditionally list contribution percentages in ascending order from one to five percent, studies have shown that reversing this order so that the first option shown is five percent markedly increases enrollment in the five percent option. This method is referred to as “placement.”

 “Social Norming” reflects the fact that people tend to benchmark themselves against their peers. Statistics from the Bureau of Labor Statistics show that participants tacitly compete against peers in similar socioeconomic conditions.

8. Incentives and “Gamification” 

carrotThe use of games (gamification) is an effective tool in reaching  individuals who may not be easily engaged in retirement decisions (“non-savers”). Gamification can be used to reward people if they engage in the correct behaviors. Plan sponsors may also use incentives to provide rewards to participants with who exceed a certain benchmark contribution amount. Other techniques include raffles.

  • Best Practice 1: The NFL’s “Play 60” campaign  incorporates the use of the NFL brand to incentivize children to play a game for at least 60 minutes a day.
  • Best Practice 2: A rug manufacturer in northern Georgia had a series of meetings for people working multiple shifts, giving away lottery tickets to encourage attendance, and experienced standing room only for the meetings.

9. Six Marketing Principles Improve Communications

Communications that are uninspiring and difficult to undmarketing-300x200erstand leave employees confused, bored and unmotivated. The communicator’s “curse of knowledge” is a bias in which the communicator’s knowledgeability makes it difficult to demonstrate it from the perspective of lesser-informed people. The Council highlighted six principles of communication that plan sponsors should consider when drafting documents or presenting to their participants that will inspire action:

1. Show Empathy

empathyTo  determine the relevance of a message to an audience, it is necessary to engage them and ask questions that the content of the presentation or the communication should then be tailored to answer. For example, an energy company developed a program to help consumers understand and lower their energy bills, using this computerized question:

Can I help you with your bill?

  1. Yes, help me understand my bill.
  2. Help me save money.
  3. Both of the Above.
  4. I’m Here for Something Else.

By showing empathy to what the consumer cared about and giving information and tips to help them feel more in control, these questions presented helped raise consumer satisfaction.

2. Use Metaphors and Analogies

analogCommunications also reference a metaphor or visual picture to help the recipient relate to the message. For example, when Ridley Scott presented the screenplay for Alien to his producers he used the popular movie Jaws as a reference, and the metaphor “it’s like Jaws in space,” to frame a concept that the producers easily understood

3. Use Storytelling

icon-storytellingPeople tend to forget facts that are presented but usually remember a story. Stories are easy to absorb when people are overwhelmed with information. They also eliminate extraneous facts to capture the recipient’s interest and relate to him on an emotional level.

4. Use a Conversational Voice

conversationalUsing overly technical information, compliance or legal jargon can loose an audience. For example, it is difficult to convey the benefit of voluntary life insurance individual and spouse buy-up options in which election of coverage for a spouse can equal up to half an individual’s buy-up,  depending on the desired level of coverage. An effective way of communicating this is as follows:

“The company is going to buy life insurance for you. If you want, you can buy extra life insurance. Whatever extra life insurance you buy for yourself, you can also buy up to half that amount for your spouse. Now, depending on how much additional insurance you’d like, one or both of you may need to answer some questions about your health to see if you qualify for it.”

5. Surprise the Recipient

boxing-glove-surpriseUnexpected methods of engaging the recipient get the individual’s attention when a subject is ordinarily challenging and abstract. The use of humor, as shown below, can be considered an example.

6. Use Humor

humorUsing a little humor in the message will keep the audience engaged and make the message easier for audiences to relate to.

 

Plan Design Considerationsicon-design

Automatic Enrollment

A study by Brigitte Madrian and Dennis Shea shows that automatic enrollment increases average participation rates from 65 percent to 85 percent. It is particularly helpful for low-income workers with annual wages under $20,000, where participation increased from 27 percent to 82 percent. Average participation for employees under age 30 doubled from 41 percent to 82 percent, and the best improvements have been among the segments that had the lowest participation rates.  This was corroborated in as presented in the testimony of Lori Lucas.

Mandatory Contributions and Automatic Escalation

Defaults that are too low can  impact workers who would otherwise have contributed more. Since studies have shown higher default contribution rates have not increased opt-out rates, employers should consider recommending higher default contribution rates.

One solution is a stretch match (increasing the maximum amount of pay that can be matched and decreasing the percent matched, to keep the employer’s costs flat.

Another way to increase savings is automatic escalation in which sponsors automatically increase a worker’s contribution rate by one to two percent  of salary at each pay anniversary until a cap, such as 12 percent of pay.

Best Practice – TIAA-CREF: David Richardson of TIAA-CREF found that 403(b) plans typically have much higher contribution rates, ranging from 10 percent to 15 percent of pay compared to 5 percent to 7percent for all 401(k) plans, due to mandatory contributions from both employers and employees as a requirement of employment.  The 403(b) plans TIAA-CREF administers experience much higher annuitization rates — 40 percent compared to 4 percent for all 401(k) plans.

 Conclusions and Implications

red pencilThe Council found that continuous, simplified, personalized communication using multiple channels, connected with humor and empathy, are effective ways to communicate with plan participants to encourage participant engagement.

Benefit Program Marketers seeking to increase employee plan participation need to be more flexible, customizable and responsive than ever to introduce, present, promote and clarify the particular offerings and choices the employer has agreed to sponsor. Dynamic Publishing platforms are becoming a key tool in executing this strategy DPP is a way of designing publications in which layout templates are created which can contain different content in different publications. In cases where the same content is being used in multiple layouts, the same layout is being used for several different sets of content, or both, dynamic page publishing can offer significant advantages of efficiency over a traditional system of page-by-page design. Future articles will explore Dynamic Publishing in greater depth.

Related Blog Article:

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The Flip-Side of Cultural Diversity?

A study conducted by Harvard political scientist Robert Putnam finds less civic activity in diverse communities.

The study is the largest ever on civic engagement in America, based on detailed interviews of nearly 30,000 people across America. Putnam surveyed residents in 41 US communities, sorting residents were into the four principal categories used by the US Census: black, white, Hispanic, and Asian. They were asked how much they trusted their neighbors and those of each racial category, and questioned their civic attitudes and practices, including their views on local government, their involvement in community projects, and their friendships.

The Findings: Lower “Social Capital”

The study found that the greater the diversity in a community, the fewer people vote and the less they volunteer, the less they give to charity and work on community projects. In the most diverse communities, neighbors trust one another about half as much as they do in the most homogenous settings. The study found that virtually all measures of civic health are lower in more diverse settings.

Putnam has studied the problem of declining civic activity for quite some time, finding that the US has experienced a pronounced decline in “social capital”  – which refers to the social networks — friendships, religious congregations, neighborhood associations and so on.  He states that when social capital is high, communities are better places to live, neighborhoods are safer, people are healthier, and more citizens vote.

Putnam writes that those in more diverse communities tend to:

distrust their neighbors, regardless of the color of their skin, to withdraw even from close friends, to expect the worst from their community and its leaders, to volunteer less, give less to charity and work on community projects less often, to register to vote less, to agitate for social reform more but have less faith that they can actually make a difference, and to huddle unhappily in front of the television…People living in ethnically diverse settings appear to ‘hunker down’ — that is, to pull in like a turtle.” 

These findings challenged the two dominant schools of thought on ethnic and racial diversity, the “contact” theory and the “conflict” theory. Under the contact theory, more time spent with those of other backgrounds leads to greater understanding and harmony between groups. Under the conflict theory, that proximity produces tension and discord. But Putnam’s findings reject both theories: In more diverse communities, there were neither great bonds formed across group lines nor heightened ethnic tensions, but a general civic malaise, with levels of trust lower even among members of the same group.

The “Diversity Paradox”

In a nation that is inexorably becoming increasingly diverse, how are we to interpret these findings?  

First, it is important to note that there are also some very positive recent findings about diversity, While ethnic diversity may, in the short run prove a liability for social connectedness, other research suggests it can be a big asset when it comes to driving productivity and innovation. In high-skill workplace settings. Scott Page, a University of Michigan political scientist and  author of “The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies”  finds that the different ways of thinking among people from different cultures can be a distinct advantage:

Because they see the world and think about the world differently than you, that’s challenging. But by hanging out with people different than you, you’re likely to get more insights. Diverse teams tend to be more productive.”

Page calls this the “diversity paradox.” He thinks the contrasting positive and negative effects of diversity can coexist in communities, but we must be wary of civic engagement falling off too far.

Putnam’s Take

When he published a detailed analysis in the journal Scandinavian Political Studies, Putnam argued that the negative effects of diversity can be remedied, and that history suggests that ethnic diversity may eventually fade as a sharp line of social demarcation.

In the final section of his paper, Putnam discusses how social identity can change over time, stating that experience shows that social divisions can eventually give way to “more encompassing identities” that create a “new, more capacious sense of ‘we.”

He also points out that increasing diversity in America is not only inevitable, but ultimately valuable and enriching. To help reduce divisions that hinder civic engagement, he suggests programs such as expanding support for English-language instruction and investing in community centers and other places to foster meaningful interaction. Putnam states: 

I think over the long run, as we get to know one another, and as we begin to see things that we have in common with people who don’t look like us, this allergy to diversity tends to diminish and to go away. So this is not something that I think as an argument against immigration. On the contrary, actually, I think in the long run we’ll all be better. But I don’t think that progressives and integrationists like me do our cause any service by hiding from ourselves the fact that it’s not easy.

Putting It Into Perspective

I believe it is important to remember that social diversity is a rather recent phenomenon, and the American consciousness is still evolving as is plainly demonstrated by the obvious dog whistle racism of the anti-Obama crowd.

What is also important to note is that Putnam does not extrapolate some universal principle that heterogeneous societies have any less potential for social cohesion than homogeneous ones -only that it takes time for people to look past their differences, and the American experience demonstrates that over time society can change.

For example, one of the remarkable aspects of the study is that it focuses on diverse communities. In fact, 50 odd years ago diverse neighborhoods were unheard of. I recall the changes in my old neighborhood, Bedford Stuyversant, Brooklyn. There was “white flight”following the construction of the subway line between Harlem and Bedford in 1936, as African Americans left overcrowded Harlem for more available housing in Bedford–Stuyvesant. But today, my daughter lives right near my old home in Clinton Hill, which is now a diverse neighborhood.

So it would not be fair to overgeneralize based on a study of diversity given such a short time frame.

Our Polarized Society

I believe that it would also be mistaken to lay off the problems of American polarization on attitudes about race on the part of the members of society themselves. To put this in perspective, bear in mind that even as America’s oligarchical structures have tightened over the  past few decades, society as a whole has nonetheless managed to trend toward a more diverse perspective.

This has occurred despite increased political polarization. When there is a demonstrative and concerted effort by the wealthiest class – including the media and politicians it controls- to manipulate people’s thought processes such that they devolve into a divisive, polarized mental framework, we should avoid the temptation to simply cite racial attitudes. While this is a contributing factor, alienation has much deeper roots, and It takes a great deal in such a divisive environment to take the bull by the horns and overcome the mental conditioning that is damaging the cohesiveness of American society,

I observe that change is inspired by trauma and shock. And given the increasing disparity in wealth distribution, mistrust of our leaders, expanding unemployment and the decline of the American middle class, we have a very interesting opportunity as a society today to evolve – together.

The key is to see past our differences, and Putnam agrees with me here. The only thing holding us back is that we submit to the mechanisms of control.

By guest blogger, Mark Weishaar
 
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Today’s smart, marketing-focused organizations realize the value of communicating with their customers using the channel of their customers’ preference. More and more, that preference is mobile.

It’s commonly reported that over 87% of Americans (90% of Canadians) own a cell phone, and most of them won’t leave home without it. For many, checking their mobile device is the last thing they do at night and the first thing they do in the morning. Almost 80% of smartphone owners use their device more frequently today for mobile email and texting than to actually make phone calls. Mobile marketing is dominating the media landscape, and mobile users are lapping it up.

  • 82% agree it’s a good way to learn about new products and brands;
  • 80% believe it can influence them to investigate a product or service;
  • 71% accept that it can change the way they think about a product or service; and
  • 65% report that it has the power to influence them to BUY a product or service.

Given this proliferation and mainstream acceptance of technology solutions, one would think that insurance companies and financial services organizations would be among the first to provide their customers and prospects with cutting-edge, lightning-fast applications. But one would be quite wrong. The fact is, only about one-third of marketers report having a defined strategy for mobile marketing! And the insurance industry, in particular, is lagging at the back of the pack when it comes to offering engaging mobile experiences. This sector must explore mobile websites, mobile applications and SMS text messaging campaigns to effectively respond to emerging consumer behavior.

Maximize the efficiency of your Customer Service efforts

One of the easiest and highest-ROI considerations should be your company’s website. Google reports that a good 50% of mobile users become frustrated when they encounter a site that is not mobile-friendly. It seems unnecessary to say that annoying your clients, especially those who may be experiencing an emergency, is not very smart. A mobile application is essentially a tool to make it easy for your customers to connect with you. It can be fun and useful, informative and interactive; it can be a short-cut to service. A Customer Service-specific mobile app might feature

  • Talking to a live agent
  • Dealing with an accident on the spot
  • Requesting a live call-back
  • Filing and managing a claim

Implementing these mobile options can help reduce support costs and call center overhead, reduce customer churn and even increase customer lifetime value. An app can enhance brand advocacy and promote upsells and cross-sells. What’s best, all of these benefits are entirely measurable in terms of ROI.

Building a Useful Database

The success of a mobile marketing strategy is going to depend on the power of your database. No program is complete without an Acquisition Model to cost-effectively harvest and manipulate prospect information. An advertising plan combining online, SMS and traditional channels is vital to drive traffic and promote downloads of a mobile app, with a clearly defined conversion funnel from prospect to customer.

Growing Pains specific to Mobile Payments for Insurance and Banking

Although Juniper Research reports that mobile payments are expected to reach $630 BILLION by 2014, remittances such as insurance premiums are not included. The issue does not lie with the technology of the Mobile Application, but rather with the capabilities and guidelines of mobile carriers, such as AT&T, Verizon and Sprint, among others.

Bill-to-Carrier US Obstacles

  1. Each carrier must approve each program based on their own guidelines. They demand a 2-3 week beta test, during which they review an online-hosted version of each app for flow, usability, bugs, and terms of use acceptance.Your customers choose from among many Carriers, so you need to be compliant with all of them. The degree of speed, complexity and cooperation varies from one Operator to the next; they are however consistent in requiring 20-30% of each purchase amount.
  2. Operators are strict and favor big brands; legitimacy is important given the number of bill-to-carrier scams. As a alternative, they look for a guaranteed minimum of $50,000 in monthly bill-to-carrier revenue, proof that is often first generated in Canada or Europe.
  3. US Carriers prefer micropayments to the tune of $2. They are reluctant to approve monthly fees of $15 or $20 due to the higher risk of complaints or accidental enrollment by children.

Their preference for lower price points, non-recurring fees and virtual goods over outside services can all be hurdles for monthly insurance premium billing.

In addition to carrier complexities, success can depend on the various device operating systems. Currently, only Android supports bill-to-carrier within a native application. iOS will only use its IAP API (In-app purchase) using iTunes to make a purchase.

Retention and Loyalty – in a Mobile Environment

It is possible to truly integrate mobile into your existing strategy and better measure increased retention and loyalty from your customers. It’s all about convenience and real-time communication. Give them instant fingertip access to source and share critical data:

  • Review the latest product and service offerings
  • Manage personal “MyAccount” files on the go
  • Provide 24/7 emergency access to processes and forms on a handheld device
  • Enable immediate accident claims reporting and supporting photo uploads

These are just a few of the exciting, dynamic Mobile solutions that will propel your further differentiation from the competition – with measurable results.

Yet there are many complexities surrounding the development of mobile apps and mobile websites for insurance premium payment processing and lead generation. Any such strategy requires an in-depth understanding of the various Carriers, government regulations, operating systems, user demographics and data availability. This calls for the experienced insights of seasoned experts.

Today’s technology does not allow “catch-up” time. But it’s never too late to adjust your marketing focus onto those channels that are proven to build connections with your customers. They will reward you with interest, participation and brand loyalty.

Mark Weishaar is VP, Business Development with Direct Access Marketing, based in Burlington, Ontario, Canada and Philadelphia, PA.

 

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Who Do You Trust?

 notes in HealthLifePro, that Americans’ trust in advisors has declined. A study by Hearts & Wallets, Hingham, Mass titled “Trust-Building Practices: Updated Empirical Analysis of What Drives Trust,” gauged trust on a scale of one to ten (one signifies very little trust and ten very high trust.) The study’s findings:

  • Just one in five Americans fully trusted their financial advisor in 2012 – a four-point decline since 2010.
  • Those awarding their advisors 9 points declined from 18% in 2010 to 13% in 2012.
  • Those awarding their advisors 8 points declined from 21% in 2010 to 17% in 2012.

The most trusted advisor practices are full-service brokerage and insurance practices versus self-service brokerages and banks:

  • 74% rate  insurance and full-service brokerages a 9 or a 10 (37% each.)
  • Only 60% rate self-brokerages and banks a 9 or a 10.

What Drives Advisor Trust?

The top trust drivers of trust were ranked as follows:

  • improving investor understanding of how the provider earns its money (by a wide margin)
  • the perception that an advisor is unbiased
  • clear and understandable fees
  • responsive
  • understands and shares the client’s values
  • has made money for the client
  • has produced a “positive experience” for friends and family members.

Takeaway:

Transparency, responsiveness, understanding the client’s values and putting the client’s interests above one’s own are all core to trust in an advisor.

HubSpot’s Inbound Internet Marketing Blog’s 30 Amazing Marketing Tools, Tips & Tricks We’re Thankful For, by  Amanda Sibley lists some of the tools, tricks, and tips that marketers say help them do their jobs better. Here are a few:

Social Media Tools

Facebook Global Pages – This newly developed tool tool allows marketers to create one central maintenance location with better targeting options instead of having to choose between a single Facebook page for an entire global audience, or multiple pages to target specific audiences.

Audience Targeting in Facebook Advertisements – Facebook’s ad platform audience targeting allows marketers to create ads for a specific target audience. This makes your ads more relevant and allows you to target custom audiences from email addresses in your database

Content Creation Tools

Evernote – Note-taking apps are helpful for writing or brainstorming content on the go.

Factbrowser  helps you find compelling stats or data points as you create content. It breaks down data by topic, source, format, region, and/or demographic.

CreativeCommons – This gives you another option for finding images for your marketing content. Instead of using stock photography or creating the images yourself, you can use CreativeCommons to search for free photos that are that are allowed to be used commercially, provided you give credit to the artist.

PowerPoint for Design – Marketers can create professional looking calls-to-action, ebooks, and infographics without hiring the services of a designer by using PowerPoint as a design tool.

Snipping Tool – This Windows tool lets you easily take screen captures. Hubspot provides an  overview.

Hubspot’s free template to help you easily create infographics.

SEO Tools

Free Site Crawl Tools – Free tools like Xenu and Screaming Frog crawl your entire site, and provide you a spreadsheet of all the pages, URLs, and broken links on your site.

Analytics Tools

VLOOKUP – You can use VLOOKUP in Excel to search for and identify particular sets of data, allowing you to analyze data quickly.

Statistical Significance Calculator – When you’re running tests in your marketing, statistical significance calculators can tell you when your test’s results are actually meaningful.

Collaboration & Planning Tools

Google Drive (Google Docs) – This tool helps everyone on a team to see and update information in real time.

Sales & Nurturing Tools

Landing Page Creation Tool – It can take a long time to get landing pages created working with IT.  to get landing pages created. Easy landing page creation tools like HubSpot allow you to create a landing page in minutes, making it easier to launch offers and lead generation.

Top 5 Challenges Marketers Face

Hubspot’s analysis of the top Challenges for B2B vs. B2C shows that the most common challenge across both segments is driving awareness and traffic, in other words, optimizing the top of the funnel to grow their reach. Here are the top challenges:

The top 10 challenges across both B2B and B2C companies are:

  1. Awareness/traffic (22.5%)
  2. Lead generation (16.2%)
  3. Social media (6.3%)
  4. Targeting (5.4%)
  5. Branding/brand recognition (4.5%)
  6. Converting leads to customers (3.6%)
  7. Keeping up with marketing trends (3.6%)
  8. Increasing/proving ROI (2.7%)
  9. Content creation (1.8%)
  10. Budget (1.8%)

The top 5 B2B marketing challenges are:

  1. Awareness/traffic (22.5%)
  2. Lead generation (16.2%)
  3. Social media (6.3%)
  4. Targeting (5.4%)
  5. Branding/brand recognition (4.5%)

The top 5 B2C marketing challenges are:

  1. Awareness/traffic (19.6%)
  2. Social media (17.9%)
  3. Targeting (10.7%)
  4. Budget (8%)
  5. Lead generation (8%)

The HubSpot Inbound Internet Marketing blog’s Sarah Goliger identifies 5 Major Challenges Marketers Face (And How to Solve Them). While we all face different challenges, there are some areas that any marketer can improve on. HubSpot’s quick 3-question quiz – “What’s Your Biggest Marketing Opportunity?”  can help you hone in on where you might best focus your efforts to improve the effectiveness of your marketing more effective.HubSpot’s analyzed their results to identify some of the most common challenges marketers have told them that they face, and suggests solutions.

1. Generating Awareness and Driving Traffic 

Challenge: To beging generating leads to convert into customers, you need to get your audience’s attention. This means generating a large enough volume of interested prospects by understanding which channels can get you the highest return.Solution: You first need to determine if you are using the right social networks where your natural audience is.  Some suggestions include using tools to “widen the top of your marketing funnel, such as:

2. Targeting Effectively 

 Challenge: Hubspot recommends that you identify your buyer personas. In other words, make a clear determination of who it is you should be marketing to:

Offer some sort of value to them (fulfill a need or desire – for instance, to learn or understand something about your industry or alleviate a problem that your product aims to solve.)

Make your message relevant to your audience.

Solution: Start by developing a detailed picture of your target audience, building buyer personas through a 3 step process:

  • Segment by demographics.
  • Identify their needs.
  • Develop behavior-based profiles.

Then determine what each buyer persona is looking for for and how you can provide value to that persona and tailor your content to make your message relevant to every individual lead.  Hubspot provides  and developed a  to help you research and create detailed buyer personas.

3. Using Social Media to Generate Customers and Revenue

Challenge: Increasingly, companies understand the business value in social media marketing. The problem is, they don’t know how to convert social engagement into dollars – the science of targeting, engaging, and nurturing a social following that can be a source of quality leads for conversion.Solution: Managing media marketing requires that you:

  • Recognize influencers.
  • Segment groups of users based on their social activity and interests.
  • Properly time and manage appropriate follow-up communication.

Social media lead intelligence about a lead’s behavior and interaction with your company in social networks will enable public facing representatives to have more meaningful and targeted conversations with specific, tailored information about that person’s activity. Personalized conversations based on information that is personally relevant to the customer lead to higher conversion rates.

4. Keeping Up With Marketing Trends and Strategies

Challenge: Marketing has increasingly shifted its focus from print media to online media, and social media is becoming a dominant platform for two-way communication and feedback collection. How can you keep up with new technologies, trends and strategies in this quickly changing environment?Solution: Effective marketing means investing in consumer research and ongoing marketing resources to know:

  • Where your audience is.
  • How to provide value to them.
  • What the best tools and methods are for doing so.

5. Proving ROI

Challenge: The proliferation of advanced analytics tools means that marketers are held to a higher standard. You must be able to measure the value of your efforts in terms of leads, customers, and revenue, tying every single lead, customer, and dollar back to the marketing initiative that created them.

Solution: Some suggestions Hubspot presents are as follows:

  • Closed-loop marketing cuts through the vagueness of marketing myths and assumptions and reveals real data about the results of your marketing efforts.
  • Advanced marketing analytics can track which marketing activities are generating leads, customers, and revenue.

Closed Loop Marketing means developing a loop of two-way messaging with customers. Done effectively, messages are pushed to the customer based on insights on customer preferences, or accessed in a self-service model. Data is gathered during the interaction leading to a cycle of continuous improvement. Enhanced knowledge about the customer and customer preferences allow you to refine the message or content to improve subsequent interactions.

In other words, it is about relationship building using data gleaned from customer interactions through various communication channels to support the continuous refining of relationships:

  • Selection of the channels and messages are driven by customer preference and receptivity.
  • This provides an improved customer database for refined segmentation by behavioral attributes.
  • Data about which content was presented, duration, frequency,which customers, feedback, responses to surveys, and click stream data, along with additional data sets such as sales, market share, sales growth provides you with the analytics to compare data sets for cause and effect in order to recommend corrections to the next approach.

In Closed Loop Marketing, when the insights gained during a customer interaction are used to make a change in the sales and marketing approach in order to improve a subsequent interaction, the loop is closed. Additionally, this intelligence can be extended to:

  • Multichannel Marketing – closed loop marketing with multiple interconnected channels.
  • Continuous Loop Marketing – allowing for improvements to happen on an ongoing basis, rather than one time only.

The Economist article, “Data, Data, Everywhere” discusses the fact that the digital universe is growing faster than the capability to store this information. In the graph below you can see a representation of this phenomenon measured in Exabytes. (5 Exabytes = all of the words ever spoken by mankind.)

To attempt to deal with all this data, Oracle, IBM, Microsoft and SAP have spent more than $15 billion in the past few years buying software firms specializing in data management and analytics – an industry  estimated to be worth more than $100 billion and growing at almost 10% a year, twice as fast as the software business as a whole.

This produces a significant problem for Marketers as well.

More Data Than Talent = Bad Marketing

 writes in New Media Media and Marketing that brands, like consumers are overwhelmed with too much data to know what to do with. And when it comes to Marketing, a new study shows that companies don’t have enough talent to know how to use it.  Rich sums up the problem:

With too much data, a lack of funding and resources and a scarcity of talented individuals and it’s not hard to understand why there is so much bad marketing out there.

The Problem: A Shortage of Marketing Talent

A study by MarketingSherpa conducted among small, medium and large businesses found that the most significant challenges facing marketers are:

  • Lack of funding or resources.
  • Lack of skilled individuals.

Here’s what the companies surveyed said were the major marketing problems they faced:

The Causes: Old Paradigms

Corporate politics:  A majority of respondents said that “there is at lest one wrong person in a critical position.”

Traditional Marketing Mindset:   Companies are still throwing money at traditional marketing tactics that are don’t engage today’s empowered consumers who don’t want to be interrupted with irrelevant ads.

No Clear ROI: Companies continue to do elaborate “branding” without demonstrating “a clear path to ROI.” In today’s cost-conscious environment, executives therefore see marketing as an expense rather than an investment in the brand.

The Solution: 5 Steps to Better Marketing

Companies need to find real marketing talent real fast. And Rich provides 5 steps to do so:

1: Hire Different:  If you want to “think different” then hire different. Instead of hiring people based on a close fit for a job description put together with the help of Human Resources, hire people for their passion and commitment to creative solutions.

2: Hire Outside the Boxers: Seek out those who question the status quo and adopt to them, rather than bring in those who fit in too well.

3: Hire Influencers: People who are creative and engaged and can influence others within your organization can get others excited about using data creatively to market to micro segments.

4: Hire Ego Challengers: As Rich puts it: “always hire someone smarter than you.”

5: Hire Non Technicians: Hire someone who knows how to use technology to maximize business objectives rather than someone who is just great at technology.

Do you want to read a 647 page report on data deluge?

Don’t be ridiculous. Rich Meyer’s last piece of advice is this:

Finally hire someone who can take a 60 slide Power Point deck and condense it down to one page of actionable recommendations against key brand objectives.   Either your organization is going to change or you’re going to become more and more irrelevant to consumers.

End of Story!

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