Even a market leader has to continually find ways to stand out. And in a commoditized industry, often the best differentiator is customer experience.
That’s the situation MassMutual Retirement Services found itself in. MMRS is a profitable division of Massachusetts Mutual Life Insurance Company (MassMutual). The 401(k) provider has more than 3 million plan participants, and has achieved record plan sales for the fourth year in a row, experiencing a 15% sales increase year-over-year. MMRS also has a 96% record plan retention rate, 5% higher than the industry average.
Despite these successes the company faced a perception problem. MMRS is often perceived as a commodity business, says Heather Smiley, CMO and SVP of marketing. So, it had to find new ways to differentiate its retirement plan services from its competitors’. In addition, as a B2B2C company, it sells retirement plans to employers through financial advisors and then the employees have to decide whether to participate in their company’s plan. Having to differentiate itself in all of these markets created an additional burden. As Kris Gates, VP of consumer experience marketing at MMRS, says, “The only thing that you can do to differentiate yourself with now is service and experience.”
For MMRS, in large part improving both meant communicating with all of its customers with more relevance.
According to Gates and Smiley, several long-held misconceptions had prevented MMRS from doing so. For example, there are fallacies about customers’ occupations. “Things like, people who work on a manufacturing line don’t have access to a computer,” Smiley explains. And while many employers view participating in a 401(k) plan as an employee decision, Gates says it’s actually more of a family decision. MMRS decided to look at the data and analyze what customers were actually saying, instead of basing its marketing strategies on misconceptions of what it thought they believed. So, MMRS worked with Ernan Roman Direct Marketing Corp. (ERDM) to conduct voice of the customer (VoC) research beginning in December 2011.
Data trumps opinion
Rather than tackling all three customer segments at once, MMRS focused on its B2C group first. Smiley says MMRS’s consumer population was the group that the company interacted with the least.
“You don’t hear from a really large representation of your participants,” Smiley says, “and you don’t have the opportunity to have in-depth conversations with them like a salesperson does with a financial advisor or a relationship manager does with an employer.”
Based on industry quantitative data, MMRS knew that 42% of consumers won’t be ready to retire by age 67. Using that as a focal point, MMRS aimed to identify the barriers that prevented people from planning for retirement across different age groups, what tools and services it could provide to make learning about retirement easier, and how the company could form deeper relationships with its customers that would turn them into customers for life. The VoC research comprised 156 one-hour phone interviews conducted by a professional interviewer over the course of 12 weeks. The interview questions included queries about consumers’ perception of the brand, their relationship with MMRS, where they were in their retirement planning, and what they thought MMRS should prioritize.
After conducting the research, Gates says, MMRS discovered four key reasons why people don’t save for retirement: They don’t know where or how to start planning; they’re not engaged with their retirement planning process; they don’t create a focused goal or structured plan; and “life happens”—meaning many consumers would like to save more, but events like buying a home, having kids, getting divorced, and paying for college get in the way. Gates and Smiley say that the VoC research provided the company with qualitative and life-stage data that helped them identify where customers are in their journey to retirement. This life-stage data helps MMRS map out its programs, services, and messaging over the course of five key stages in the customer lifecycle: enrollment, new customer welcome program, proactive ongoing touches, annual review and anniversary program, and next steps (i.e. when someone is terminated or changes jobs).
Life’s a journey
The first step in the customer journey to saving for retirement is enrollment. Before the VoC research, MMRS would look for key 401(k) triggers that signaled when they should contact a consumer, such as starting a new job. But during the research respondents told MMRS that they often feel overwhelmed on their first day of work, so the company should contact them a few weeks later. Consumers cite other preferences when they enroll (using a paper form or an online preference page) for how much they want to save, how they want to invest that money, and how they would like MMRS to contact them. Doing so ensures that MMRS representatives tailor the conversations to each individual’s needs.
Two to three weeks later MMRS initiates the welcome program, which entails scheduling an initial call with the consumer, setting up a meeting with an MMRS representative, providing follow-up information for reference, and having individual or group onsite meetings with a representative. What MMRS didn’t realize before the VoC research was that consumers have different preferences for each of these stages. For instance, Gates says that MMRS makes outbound calls to welcome its customers, but customers interviewed said that they won’t answer their phones if they don’t recognize the phone number.
Ernan Roman, president of ERDM, says that consumers have different definitions of “meeting,” as well; for example, a face-to-face encounter, phone call, or online chat. In addition, Gates says MMRS’s Gen Y consumers surveyed asked the company for free reading materials so they can come prepared to the group or one-on-one onsite meetings.
Based on findings from the VOC research, MMRS now ensures that its representatives also are ready for those meetings—by being prepared to talk about what end customers actually want to discuss. When MMRS notifies those customers about an onsite visit, it includes a survey in the email so they can reveal what they’d like to discuss in advance, rather than having the employer dictate the conversation.
Throughout the year MMRS provides content across various channels to keep end customers engaged during the “proactive ongoing touches” stage of the customer lifecycle. One of the most successful is the company’s webisode series, “The Smart View,” which mirrors a daytime talk show. The nine episodes comprising season 1’s two- to three-minute videos covered a variety of topics, including “How Much Should I Save?” “Refinancing the Mortgage,” and “Pre-retirement Jitters.” In addition, the show featured actual end customers, such as a system IT professional and a billing administrator. The videos also included calls-to-action to one of MMRS’s websites, retiresmart.com (which provides consumers with tools to start planning for retirement according to age range or life stage), to the company’s customer service number, and to the RetireSmart Facebook page.
“We’re talking about retirement and money, and 99% of the people couldn’t care less,” Gates says. “[So], how do you make it more interesting, keep their focus, give them that little nugget quickly without [boring] them?”
To generate interest for the series, MMRS launched an opt-in email pilot. Gates says MMRS sent its customers an email informing them of the video series with a call-to-action to opt in to receive future notifications. The following week MMRS sent the opt-in list an email about the video; to form a control group, MMRS also sent the email to a selection of people who didn’t opt in. Compared to the control group, customers who opted in had a 94% higher open rate and a 1,062% higher video-view rate. In addition, MMRS experienced zero unsubscribes within the opt-in group and 100% deliverability.
MMRS launched season two of “The Smart View” last September, and has brought on Gen Y money coach Farnoosh Torabi to appeal to its younger customer base.
As for other stages of the journey, Smiley says MMRS is still developing its annual review and anniversary program. Currently, an MMRS representative follows up with customers, reminding them why they’re doing business with the company, thanking them for their business, and talking them through improvement opportunities. As for “next steps”—the phase that occurs when customers are terminated or switch jobs—Smiley says MMRS presents them with the choice to stay in the plan or leave. Gates adds that MMRS sends campaign mailings for that stage to encourage a live interaction, either in person or over the phone, because consumers are often dealing with a large sum of money.
Getting to know the real you
In addition to developing its life stages, MMRS is expanding its targeting capabilities. The company now segments its customers using personas. For example, by combining attitudinal, behavioral, and demographic data, MMRS is able to identify three kinds of investors: self-assured (those who use MMRS’s tools but don’t ask for help); unsure (those who look at the educational resources and ask for help); and the apathetic (those who don’t visit the website or call).
MMRS also uses different creative and messaging for customers of various ages and genders. For example, a female in her 20s might receive an email with an image of a young woman about why it’s important to start saving for retirement.
The company’s new segmentation capabilities were evident in its 2012 RetireSmart Save campaign, which reached more than 308,000 participants through targeted postcards and emails. The recipients were segmented by gender and divided into three age groups: 18 to 34, 35 to 54, and over 55. The messaging and imagery aligned with each gender and age group. As a result of the campaign, the average deferral rates—the percentage of salary participants put into their 401(k) each pay period—increased 3.53% for women and 3.34% for men. In terms of age, consumers over the age of 55 had the highest deferral percentage increases (8.75%), compared to those in the 18 to 34 and 35 to 54 age brackets, who increased their deferrals by 5.25% and 6.62%, respectively.
As a result, Smiley says, MMRS wants to deepen its end-customer segmentation through predictive modeling.
Looking to the future
After seeing its successes from the first VoC research study, MMRS worked with ERDM to conduct VoC research for its employer and financial advisor customer segments, which were completed last year. “By doing the ‘C’ first, we were able to bring that knowledge to the next conversation and challenge what we’re hearing based on what the customer is actually saying,” Gates says.
Along with the VoC research, MMRS conducts ongoing client satisfaction surveys by means of phone interviews every quarter to determine why the company won or lost a piece of business, Smiley notes. She says having actual conversations with its customers is a significant differentiator for MMRS.
“We go in and have a conversation with our customers—that’s just not how our industry grew up,” Smiley says. “We have a very big competitive differentiator there.” The next challenge, she says, is to communicate this advantage to its 40,000 employer customers: “How do we convey the huge [benefit] that this competitive differentiator is?”