The Bottom Line | Published in December 2013

Sending the Right Message

By John Manganaro | December 2013
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Data Visualization

Seeing participant data clearly

The biggest developments in retirement planning communications strategies have come with evolving technology, experts say. Strategic Communications LLC, for instance, frequently engages with clients on improving employee engagement through social media and digital communication pathways. These approaches change the equation from a one-way effort by plan sponsors to a two-way conversation on retirement readiness that would be impossible through physical mail, says Linda Pophal, the firm’s owner and CEO.

Ben Acquario, of DST company Newkirk, stressed the importance of new automated reporting technologies that can compile external data from recordkeeping and custodian systems for comparison within a specific employer-sponsored plan. “We’re giving sponsors a chance to see the macro-level data,” he says. “They get to see how many of their employees are falling behind the wider averages. We have the ability now to break out each participant for a sponsor and tell them exactly what each participant has to do to close the gap.”

According to Bruce Focht, a research manager and vice president of business intelligence at J.P. Morgan, new data visualization technologies, in particular, are changing the way plan sponsors design and target communications materials.

A new visualization platform J.P. Morgan released earlier this year allows plan sponsors to review participant data that is automatically collected and presented graphically. Sponsors can interact with the data to identify trends and benchmarks on such factors as individualized rates of return and asset allocations—all broken down by age, salary range and a list of other characteristics.

“The new technologies have really given plan sponsors a chance to generate more insights into what’s happening in a plan than ever before,” Focht says. “Based on what a participant’s behavior is, we can automatically group him into a category and see how the different categories stack up in terms of the retirement outcomes.” That data, in turn, can be used directly during the planning of communications campaigns to identify what information needs to be communicated to which participants.

According to Waddell, data-tracking technologies also support another important point in internal communications: It is less about sending a message every single month and more about having a message that is relevant to an individual and comes with a follow-up plan. Take, for example, a plan sponsor that wants to encourage participants to contribute to their 401(k) accounts at the maximum company match level; it sends out a piece of messaging that highlights the benefits such behavior can have on improving retirement readiness.

In the past, that was likely the end of the story. But today’s technologies allow sponsors to determine, with very little effort, whether a participant’s investing behavior has actually changed following the message. They can then develop and send follow-up information on an individual-participant basis.

“We can now see their data instantly, and if they haven’t made a change, we can follow up with another tailored message that builds on the original,” Waddell says. “So it’s an iterative, response-based, sequential strategy that is most effective.”