Benchmark Your Results
Once a subset of plan participants has been identified for a
messaging campaign, there exist myriad tools and strategies to get a handle on
what participants already know—from the latest data-tracking software to pencil
and paper employee surveys.
The important factor is finding a way to set accurate
benchmarks against which campaign progress can be planned, executed and
measured, says Ben Acquario, director of communications, education and advice
for Newkirk, a DST company specializing in retirement plan communications, in
Albany, New York. Benchmarks of this type serve a dual function, Acquario says.
First, when set at the beginning of a campaign, benchmarks
provide a sense of where the most effort and energy should be expended. Second,
setting benchmarks can give plan sponsors a way to generate buy-in among
executives who must approve spending on more formal internal communications.
“Before you put forward any sort of strategy, you want to get a pulse on the
health of a plan,” Acquario says. “We first analyze a whole list of statistics,
such as participation rates, deferral rates, income replacement ratios, asset
diversification rates. All of these are important.”
Pophal says she often sees a tendency to avoid this type of
quantification, mainly out of clients’ fear of failing to meet predefined
targets shared with company executives. Her advice is to not be so concerned
over missed targets, but instead to use the results to identify and address
challenges that persist for a firm or company. “I think communications folks
can improve their credibility quite a bit within an organization if they’re
willing to come forward with data that may not be as good as what they hoped
for,” Pophal says. “The key is pitching the data in a way that shows that
you’ve identified problems for the organization and that you’re the one with a
Carol Waddell, managing director and head of product and
marketing at J.P. Morgan Asset Management in New York, echoes many of those
sentiments. Waddell says she has seen the focus of internal communications
shifting in recent years from increasing general awareness around a retirement
plan to actually moving the dial on important retirement readiness metrics.
These can include a plan’s average 401(k) contribution percentage, income
replacement ratios and click-through rates on digital communications materials.
“Obviously, retirement income is a core component of any goal of any retirement
benefit, so what we do out of the gate is sit plan sponsors down and talk about
their goal for generating income in the plan at the participant level,” Waddell
says. “Then we identify what communications programs will enable them to plan
for and pursue that success.”
J.P. Morgan encourages plan sponsors to tailor
communications materials not only for general factors such as age or gender.
Instead, develop a full investor profile for each plan participant that also
factors in current investing behavior, asset levels and a participant’s
understanding of the investment process, Waddell explains.
In the past, the development of accurate investor profiles for
all participants in a large, employer-sponsored retirement plan would have been
a monumental task, Waddell says. However, new technologies have radically
simplified the process.
By Waddell’s account, plan sponsors that have taken
advantage of J.P. Morgan’s Audience of One engagement program have seen their
plan participants’ income replacement ratios grow by 35% between 2005 and this
“Those are the kind of figures that retirement
committees get really excited about—when you can see that you’re implementing a
campaign that’s actually driving the changes you want,” Waddell says.