Knowing Customers
Knowing the answer isn’t enough. You have to know the customer.
We know that education and engagement are the keys to creating successful retirement outcomes. And most people will tell you they want to know more about saving and retirement. There’s no shortage of available information. So where is the disconnect? Why do so many struggle to adequately save and prepare?
Is it the mind-numbing complexity of financial topics? Is it fear of making the wrong decisions? Is it the momentum of real life? Or is it something simpler – that can be understood and resolved to help our customers move forward? Something as simple as short attention spans?
Imagine engagement as a conversation
Our behavioral finance research revealed that many customers don’t engage for long with financial education. They prefer quick answers, simpler decisions and timely alerts personalized to their needs.
So in 2015, we introduced My Virtual Coach, an interactive enrollment tool that helps people to save for retirement – one short, simple step at a time. In 2016, we expanded its capabilities with an annual Checkup and other tools to help people explore options when changing jobs or transitioning to retirement, streamline retirement income planning and see at a glance if they’re on track for retirement. My Virtual Coach is available 24-7. It’s mobile and designed to meet people where they are. Most importantly, it works. In 2016 participants who used My Virtual Coach deferred, on average, nearly 20% more than our active participant base.1
Respect and serve cultural differences
We also noticed that retirement plan participation among U.S. Hispanic employees was lower than among other employees – especially among first-generation Hispanics in the early stages of acculturation. Our research revealed several cultural issues in play. A tendency to rely on family for retirement income. Unfamiliarity with financial concepts. And a healthy skepticism of government and financial institutions.
Using these insights, we created a customized Hispanic enrollment program that includes bi-cultural educational experiences online, at home and in person. The program is already producing promising results. More than half of Hispanic plan participants enrolled or increased their deferral after meeting with a bi-cultural specialist.
Better knowing the customer helps the customer know better. Who knew?
1Principal reporting from 01/01/2016 to12/31/2016 for the following conversations:
Enrollment, Checkup, Welcome to Principal, and Retirement Income.