Discovering the known knowns, the known unknowns and the unknown unknowns
This is the second of a four-part series of articles, considering what can and should be done now to get your communications into shape, ahead of the Pensions Reforms.
It is not often that I find myself quoting Donald Rumsfeld (George W Bush’s defence secretary, often ridiculed for his pronouncements) but when considering your scheme communications, I think it is worth acknowledging that ‘There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know.’
In terms of pensions communications, the known knowns are the deliverables and the audience. We know what we produce and, broadly speaking, we know who the audience is – actives, deferreds, pensioners. The known unknowns usually include the reaction of the audience to our communications and the effect the messages have. The unknown unknowns include future government plans, attitudes to savings etc…And new, as yet unimagined, ways to get the messages across. Having accepted the need to communicate with members and prospective members, and started to determine what it is that you want to communicate (see my previous article), the next step is to do research – to discover the known knowns, the known unknowns and the unknown unknowns both in terms of your existing communications and your audience.
Your existing communications
The 2012 Pension Reforms, and the review of pensions in general planned by the Coalition Government, together with the growing acceptance of the general public that pensions is an issue, means that it is an ideal time to take a long hard look at your existing pension communications. Whether you simply comply with the minimum required by the legislation or are exemplars of good practice, you need to sit down and look at the materials you produce, the messages you are giving and the rationale behind it all.
Depending on the nature of your scheme, you are likely to produce at least some if not all of the following for the members:
· Benefit statements
· Report and accounts (full or ‘popular’)
· Summary funding statements
· Scheme booklet
· Joiner and Leaver forms
· Leaver statements
· Retirement packs
· Newsletters
· Website.
As well as the set of standard letters your administrators use.
Gather these materials together and review them. Regardless of whether they are produced for publication online or offline:
· Are they clearly identifiable as coming from the same source or would the uninitiated not be sure that they all came from the pension scheme?
· Are they issued regularly, according to a planned and agreed timetable or randomly as and when the need arises?
· Is the language used clear, direct and easy to understand, or obscure, remote and authoritarian?
· Are the communications tailored to specific audiences, or do you use a one size fits all approach?
These three elements are key to helping get your messages across. Consistency of look and feel helps build up a clear identity for the scheme, helping members to recognise instantly communications from the scheme. Issuing regular communications to a planned and agreed timetable means members start to expect certain communications at certain times, and watch out for them. It also means that you are not simply communicating when you have news of changes to the scheme. Using language that is clear, direct and easy to understand helps your audience to engage with their pension arrangements and therefore appreciate what they have. Finally, tailoring the communications, even slightly, to specific audiences leads to greater engagement – pity the member of a DC section of a DB scheme who each year receives the formal Report & Accounts for the scheme – only a tiny part of which are of direct relevance to them. And look at the images (if any) you use – are they likely to have any relevance to the audience?
Don’t forget to examine the rationale behind your communications. Are you simply sending out stuff because you have always done so? Is there scope to deliver the message in different ways?
Your audience
Assuming that you now have a better understanding of what you have and why you have it (the known knowns), it is time to turn to the known unknowns – to find out the affect of your communications on your audience, and, more importantly, what makes them tick – so that you can determine how you can make your communications more effective.
Who are your audience? Traditionally they have tended to be segmented between ‘active’ employees, deferred members and pensioners. But within each group are wide variations of age, earnings and lifestyles. You’ll know the age and earnings profile, of course, and you may have a rough idea of how many of them have families or other dependants. Without research, this quantitative information is all you’ll have – and this is insufficient to help you produce effective communications.
Take the time to survey your various audiences in more depth. What is their current level of knowledge or understanding around pensions? If not yet retired, what are their goals for retirement? How aware are they of the need to take some control over their future plans? Ask them where, if anywhere, they go to for advice on financial matters and find out why. Look at the sort of information they do read, and see if there are lessons that can be learnt there to make your scheme communications more effective.
Focus groups – well planned and well-run – provide the most valuable feed back, but telephone or online surveys also provide valuable evidence of the nature of your audience and how well you are reaching out to them. Even a ‘quick and dirty’ survey enclosed in a communication can yield helpful results.
There is more quantitative evidence that you could also gather – for example, the number of queries received after a communication has been sent. But such evidence is ambiguous – for example, if the number of queries reduces after a benefit statement has been issued, you could deduce one of two things – that members understand the benefit statement and it answered their queries or they didn’t understand it but were not sufficiently engaged to make contact and try to improve their understanding.
Remember that providing a pension scheme in the first place can be a costly business. For the sponsoring employer to benefit from its outlay, the scheme needs to be appreciated by its members. This means that members need to understand and appreciate the benefits of the scheme. So taking the time and spending the money, occasionally, to work out how better to communicate with the members to help them to understand the scheme better is well worthwhile.
For example, recently I helped a client issue benefit statements that were, for the first time anyone could remember, actually read by the members. I did this by determining what was the most important result the trustees wanted from sending out annual DB statements, looking at the existing statements and identifying where I felt the statements were lacking, testing my understanding with some of the audience, and then reinventing the statements so that they got the message across. In this client’s case, the trustees wanted to make the statements as simple as possible for the member to understand, without falling into the trap of talking down to the audience or sacrificing accuracy for simplicity. The result? A colourful, engaging statement, with the information clearly broken down and ordered in terms of relevance, expressed in direct language. And the client has received evidence that the statements are actually being read once they are received, rather than being filed away.
Develop your strategy
Only now that you have examined your existing communications and gone some way to a better understanding of your audience can you develop your strategy. Define your overriding objective – for example helping members adjust to the new pensions landscape, or increasing member understanding generally - and devise an action plan that will help you to get to that objective within a reasonable amount of time. As with any strategy, be clear as to what the success of that strategy will look like – for example, if looking to engage with members more effectively, you could set as a target the number of people who answer a specific call to action – for example signing on to your website, or asking for information on investment choices.
For the strategy to succeed, it is vital that it is treated in the same way as, say, a move to select a new investment option. In that case, a plan would be drawn up with the trustees’ objectives and key steps in the process identified, such as researching the market, drawing up a shortlist etc; the trustees would put aside time in advance for reviewing the results of the search and then for reviewing the success of the new option against their objectives; and, crucially, a budget for doing the work would be allocated. Setting a communications strategy should be no different.
Typically, a strategy to increase member understanding, for example, would consist of a progression of clearly measurable campaigns to bring members from their current state of understanding, as indentified by your audience research, to a state where they are able and willing to make informed decisions about their various choices, as measurable by the actions they take. The campaign deliverables would be designed to resonate effectively with the audience, using a variety of marketing tips and techniques, which I’ll be considering in detail in the next article in this series.
Company Profile
Ferrier Pearce, one of the UK's leading providers of employee communications, has over twenty years experience of working with pension schemes, blue-chip employers, investment providers and consultancies
Always at the cutting edge of technology, our comprehensive service and individual approach ensures your investment in communications reaches its full potential irrespective of size. Ferrier Pearce combines consumer customer-focused techniques with internal communications to create award-winning integrated online and offline solutions.
Understanding of the world of pensions, balancing the needs of trustees and maximizing objectives are crucial elements to the success of any communications programme. Ferrier Pearce is aware of this delicate balance and is constantly keeping abreast of the shifting trends and legislation whilst adapting to the changing landscape.
Ferrier Pearce
Maybrook House, 97 Godstone Road, Caterham Road, Surrey CR3 6RE. 01883-342682
hello@ferrierpearce.com www.ferrierpearce.com
Managing Director: Jon Pearce (Tel: 01883-332283, Email: Jon@ferrier-pearce.com)
Ferrier Pearce
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July 2010