One Size No Longer Fits All

Washington, DC, January 7, 2002 ( - Mass-production employee communications programs are fast outliving their usefulness in 401(k) education efforts - and will increasingly fall prey to more targeted efforts.

That was one industry official’s conclusion at an American Banker’s Association conference Sunday, who told the audience that truly effective investment education needs  to be customized for each participant. A trend she notes is part of the move to ‘one-to-one marketing’ demanded by plan sponsors.

“It’s not mass marketing anymore and the only way to get at this one-to-one technology is through the Web because, with any other way, it won’t be cost effective,” said Linda Stinson, Wells Fargo senior vice president and director retirement plan services.  “The only way to get at effective communication is through very targeted, very specific messaging. Those who crack that nut will (stand) in very good stead.”

Cost “Plus’

Stinson said that plan sponsors can take advantage of recent Web technology to base educational messages on each employee’s financial picture such as their total savings/ investment balances and amount needed for retirement, as well as event-based communications, such as pay increases and participation anniversaries.

In particular, “push” technology – where sponsors can direct certain electronic messages to certain participants – can help educate the employees about other available financial products, she said.

Stinson cautioned conference participants not to forget how important technology can be generally in meeting their business goals, but how carefully such technology initiatives had to be planned and priced. A detailed return on investment has to be a critical part of any technology proposal, Stinson insisted.

She said industry executives shouldn’t count on management approval of a their technology bell(s) and whistle(s) “without showing how you’re going to make (its cost) up and make it up quickly.”

The ABA conference continues through Tuesday.