9 December 2021
I want you to imagine that we have wound the clock back 40 years: to the days before Defined Contribution pensions were so prevalent in the UK.
Picture the entire DC Pensions industry in a room thinking about the future, asking themselves “What do we want the workers of the distant 2020s to think when they are asked about pensions?”
This is what they came up with:
- It’s flexible
- It’s great value for money
- It will help me enjoy retirement
- My employer gives me a generous contribution
- There are great tax breaks to help me save
Everyone agrees there are lots of great features to DC pensions and even though member engagement is low, there’s 40 years in which to achieve this level of positive recognition. That’s got to be possible, hasn’t it?
At exactly the same time, a German car manufacturer is trying to boost sales of its luxury car in the UK. It’s also got a challenge for many varied and complex reasons, and they have myriad features and benefits which might distinguish their product in the mind of their consumer. In many ways, it’s a similar challenge to that faced by our fictional pensions meeting. So let’s take a look at how they each did. Let’s roll the clock forward to today and explore how successful each has been at moving the dial of popular opinion. First of all, pensions…
What does the average member today think about DC pensions after all those years?
“It’s really complicated and it’s boring”
Perhaps not a roaring success. And I have to take some responsibility for this. I’ve worked in pensions communications for about a quarter of a century, and yet that comment comes from an actual member of an actual DC scheme. It’s dawning on me that the industry I work in hasn’t been quite as successful as I might have hoped.
And how has our car manufacturer done by way of comparison?
Bear with me while I conduct an experiment - if I was to say “name the brand of car which is the ‘ultimate driving machine’”, which company would you name?
Probably BMW. even though You might not believe that a BMW is the ultimate driving machine, but that phrase is certainly one that comes to mind when you think about their brand. And that’s because of two things:
- They came up with a simple concept that they wanted their audience to understand. Call it ‘market positioning’, call it ‘key message’, call it ‘brand essence’ or simply a ‘tag line’ – there was a simple phrase that captured a key idea.
- They repeated it so consistently for 40 years that it has become top of mind for anyone who thinks about BMW cars. Even (and I’ve tested this) young people in the office who weren’t thinking of buying cars when that tag line was last used.
I know what some of you are thinking. “They had a big budget and TV advertising on their side. How can my pension scheme do that?” It can’t. But also, it doesn’t need to. Unlike most advertisers, who are trying to reach an audience they don’t know, a pension scheme is generally communicating with a specific audience – one that not only has some connection to the scheme, but whose contact details are recorded and usable. There’s no need to produce a high-quality advert and pay for it to appear during ‘I’m a celebrity’ – you are already communicating with your audience via a much more personal medium. This is about making the most use of the comms you already produce.
The lesson? Pick your message and stick to it.
If you want people to think of your pension scheme in terms of a key benefit, then you need to include that message on your communications. On all of them. And, if you don’t do this, in the absence of you communicating your clear, key message, you’ll probably find that your members fill that gap with thoughts and biases of their own. Or, even worse, with thoughts and biases from someone else who happens to be talking to them about pensions.
A key message will be different for different schemes and different organisations – it might be ‘helping you save for life after work’, or ‘the best benefit you didn’t know you had’, or ‘creating more flexibility in your retirement’, or just ‘because we care’ – but every scheme exists for a reason, and that reason can be summarised neatly into a phrase, and that phrase can be used as a foundation for engagement.
And if you aren’t sure what it could be or how to hone your broad idea into something usable, speak to your communications provider who will be more than happy to help. For a start, it might mean that in 40 years when we try this experiment again, we’ve finally moved the dial on member engagement.