Richard Butcher has a communications problem, but does anyone have the answer?
So here’s a problem I’m grappling with.
I sit on a number of DC boards, including a couple of mastertrusts, and a couple of IGCs.
In total I am responsible (or jointly responsible) for communicating with several thousand people about some pretty complex things.
These include whether to join a pension scheme, how much they should contribute to it, how they should invest the money once contributed, and what to do with the money as they approach, reach and potentially, pass retirement.
This is, of course, bread and butter for pension communications specialists – whether working for a boutique firm or within a composite setup like an insurance company – and many of them do it very well.
”We need to be able to measure whether communications are attractive and engaging”
They research what tone, language, presentation, delivery method and/or action will get a reaction in a variety of ways, and then communicate appropriately.
All good so far.
The trouble, though, is that while this may produce material that we and those in the research lab find attractive and engaging, we don’t know if real members of real schemes feel the same way.
We’ve got the added problem of scale – we’re dealing with millions of DC members. This means we need to be able to measure whether our communications are attractive and engaging in an automated way.
Let’s start at the other end of this process. What are the success criteria for pension engagement? In other words, what does success look like?
At a very high level, success is all my DC members having an adequate income in retirement.
But this is the amalgamation of several objectives – for example: good admin, good investment performance and optimised value-for-money.
It’s also a detective control; in other words, by the time I receive feedback, it’s too late to engage.
Understanding different types of controls
A detective control is a control that identifies a problem after the event – allowing you to correct it (if that’s possible). A financial audit is a detective control.
Proactive controls are better than detective controls because they seek to avoid the problem before it occurs.
For some problems it’s worth having both. And sometimes it’s not possible to have a proactive control - for example, when the cost is disproportionate.
So are there proactive controls and objectives we could use?
At a simple level it should be possible to measure some basic metrics – click rates or whether members have viewed a webpage, for example – but I’m not sure that gives a full enough picture.
Neither of them proves engagement. In fact, they may indicate mere idle, passing curiosity.
It’s also possible to measure actions – such as how many people have increased their contributions as a result of an email suggesting they should but, again, this is simplistic.
The level of inputs doesn’t speak to the quality of the outcomes; is the member’s rate of contribution now adequate to achieve their objective?
Nor does it capture the positive inactions – the member whose contribution is already at the appropriate level and so actively decides to do nothing further.
We need to know about both things to judge whether we’re on track to providing adequate incomes in retirement.
So here’s the problem (or problems):
- What are the success criteria?
- What do we want to measure and what are the metrics (i.e. what system or standard of measurement do we use) for assessing progress against these criteria?
- What management information can we specify and obtain to demonstrate progress against the chosen metrics?
Any ideas welcome…
Richard Butcher is an independent trustee and managing director of PTL