September 12, 2012

Keep Retirement Saving Relevant, MassMutual Says

Consumers need personalized, relevant messages to encourage saving

Engaging individuals and kicking them into retirement-saving gear has always been a tough proposition. In today’s world, where consumer mind-sets are shifting more rapidly than ever because of the continued advances in technology, grabbing people’s attention is even harder, says Kris Gates, assistant vice president of participant and interactive marketing with MassMutual Retirement Services. It’s become clear that the standardized outreach programs of yore have little or no impact at all.

That’s why MassMutual’s Retirement Services Division decided to kick things up a few notches by leveraging the fundamentals of behavioral finance for its 2012 RetireSmart program. The national campaign simplifies retirement planning by reaching out to individuals in a targeted and focused manner, encouraging them to enroll in retirement plans, save, consolidate and allocate their retirement plan savings in personalized ways that are meaningful to them.

“Historically, the [retirement savings] industry would treat everyone in a plan the same way,” Gates says. “All the employees in a particular company would get the same campaign, but we have seen that this kind of approach isn’t relevant to everyone. If we’re going to succeed in getting more people to save, we’ve got to get down to personal needs and what matters at the individual level.”

The RetireSmart program is all about relevance, Gates says and creating relevance based on the differences between people. The population the program targets are broken up into gender groups first of all and then segmented into four different age categories, taking into account that different groups think and act in different ways.

“A decade ago, we’d go out and dump the same postcard on 300,000 people, and that would have no effect at all,” Gates says. “Today, I have 32 messages and each one creates a great deal more relevance.”

A message that goes to a 20-year-old, for example, would be quite different from one going out to a 40-year-old. Women and men of different age groups behave in totally different ways, Gates says, and one person’s sense of humor may not be another’s, so messages are constructed very carefully and individually. The program also takes into account ethnic backgrounds and how they can impact investment behavior.

The program is a work in progress for MassMutual, Gates says, and it’s constantly being tested and enhanced to figure out what works and what doesn’t.

“We have multiple catch points because something may not work the first time around, and we may need to try again to catch someone’s attention,” he says.

The company’s already noted that clichés don’t work: “The image of the retired couple walking on the beach – that just doesn’t fly because no one thinks of their retirement that way anymore,” Gates says.

Although green is the way to go, MassMutual has seen that print actually has greater value for the younger generation, since snail mail is such a rarity for them.

The 2012 Save campaign reached more than 308,000 participants across all age groups, and the combination of motivational participant messaging and imagery used in the mailings resulted in a 4.23% response rate, which more than doubles the 2.06% industry benchmark.

Thus far, participants increased their deferrals by 3.33 percentage points on average, MassMutual said in a release, with average deferral rates for women rising by 3.53 percentage points compared to 3.34 percentage points for men. Deferral increased by 8.75 percentage points for the 55-plus age group, but participants in both the 18-to-34 and 35-to-54 age groups also substantially increased their deferrals by 5.25 percentage points and 6.62 percentage points, respectively, the company said. 

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