Ian Sheridan has a sign on his door that reads: "How will you change the world today?" The vice president of marketing and business development for MassMutual Retirement Services is serious about answering that question. He wants to change the world by motivating more working Americans to save for their retirement. "Talk to me a year from now and ask, 'Ian did you move the needle?' I hope we can make a difference-because the system needs help."Sheridan has been on the job for a little more than a year, and already he's changing the world-at least for people whose employers sponsor MassMutual retirement plans. In November, Sheridan's group launched a new behavioral-based communication strategy to encourage employees to participate in their company-sponsored 401(k) plans. His goal: To exceed industry averages for enrollment and participation.
"The industry average is 74% participation in employer-sponsored, defined-contribution plans," says Sheridan. "And, while I'm not going to give you a specific number for our goal, I will say that's the floor for us. The tools and environment we've created are designed to help us exceed the industry average."
It's too early to tell, but Sheridan-and his boss Frederick Castellani, who heads the Retirement Services division of Massachusetts Mutual Life Insurance Co.-believe the division's new behavioral-based approach to investing-called Prepared USA-will move the needle well beyond the industry average.
Aided by print-on-demand, personalization technology, real-time analytics, campaign management and wireless enrollment, the Springfield, Mass.-based retirement services company is rolling out Prepared USA, which is based on three ways people interact with investment information:
- "I Know the Way" is designed for confident investors who are comfortable analyzing information for themselves. MassMutual offers these employees research and fact-gathering tools and directs them to their plan's investment options.
- "I Need a Map" is customized for people who know about investing but need some guidance with their choices. MassMutual provides guidance for these investors from Morningstar Associates, a risk quiz and custom portfolio options.
- "Show Me the Way" is the path prepared for people who don't have the time or confidence to design their own investment portfolio. MassMutual makes the process easier by providing simpler choices, including its "Destination" horizon-based funds, which are designed by retirement year.
"The premise we had in designing Prepared USA was that humans like to interact with information in a variety of ways, but as an industry, we have tended to over-complicate the delivery of that information," Sheridan says.
A fresh approach
A fresh approach to investor communication was necessary, he says. The U.S. population is aging and the huge demographic bubble of baby boomers will be retiring soon-many of them ill-prepared financially.
Nearly half (45%) of the U.S. workforce does not believe it will have enough money set aside for a comfortable retirement, according to a recent survey conducted by professional staffing firm Hudson Highland Group Inc. Similarly, 44% of working Americans surveyed by Allstate Insurance Co. in its fourth annual "Retirement Reality Check" said they're likely to work after retirement because they'll need income to make ends meet.
Given the fact that so many Americans aren't saving enough for retirement-and Social Security was never designed to bear that burden-Sheridan thought it was imperative to analyze how MassMutual was marketing its retirement plans and come up with a way to make it easier for people to enroll and make sound financial decisions.
With the Prepared USA platform in place, the division's next challenge was to market it effectively. How can a company motivate people to enroll, first of all, and then encourage them to continue to be active investors?
Sheridan's answer: Using innovative technologies that enable the company to personalize investment materials rather than sending generic brochures; to analyze plan and participant data to design appropriate campaigns; and to measure whether the company's actions are actually making a difference in the marketplace.
Winning or losing
"We come to work every day with the attitude: How are we going to make a difference to the customers we service?" says Sheridan. "And the only way we can answer that question is if we have the tools and technologies in place that enable us to understand if we're winning or losing every day. Then, we can have an impact."
MassMutual was already using print-on-demand and document personalization technology prior to launching Prepared USA.
These technologies are effective in reducing inventory costs and in targeting print, electronic and face-to-face communications to participants by using their name, citing their company's matching contribution, and including each plan's specific investment choices.
Print-on-demand and personalization are a step above using only standard brochures and storing them in a warehouse or mailroom. But these technologies alone won't change the world-at least not according to Sheridan.
Data mining, real-time analytics and campaign management technologies, on the other hand, just might.
"Generally, as an industry, we provide historical information to our clients," says Sheridan. But to effectively implement MassMutual's Prepared USA program-which is based on human behavior-the company needed real-time information about that behavior.
"If we do our jobs right, and people save the right amount of money, the benefits of that planning will cascade back into our economy in all kinds of ways," he says. "That's what's empowering to us. That's what keeps us motivated. And technology gives us the information to continue to be smart with our customers."
Specifically, MassMutual Retire-ment Services enhanced its Siebel customer relationship management (CRM) system by adding real-time analytics to run up-to-date reports on plan data, participant data, and aggregate data for the division's entire book of business.
"This is data mining to the nth degree," says Sheridan.
In addition, MassMutual also recently rolled out Siebel campaign management, which provides the tool for Sheridan's group to execute customer communication campaigns that are designed specifically to encourage people to take specific actions.
For example, the company can send a mailing to a group of employees in their 20s who have not yet enrolled in their employer-sponsored plan and describe how much more they'll save for retirement by investing now. Similarly, the company can send a brochure to people in their 30s whose assets are invested in a stable value fund and tell them about the benefits of having a diversified portfolio.
Whether the message is printed, sent electronically or delivered at an on-site meeting or during a call to the participant information center (PIC), MassMutual can track in real time the results of every message it sends and thereby more intelligently determine the next step it should take.
"Five days ago, we launched a campaign to a universe of 332 people who are eligible to participate in this particular plan," says Sheridan. "We sent a flyer, and of the 332 people who received it, 7% took action and enrolled. Of those who enrolled, 14 people enrolled on our Web site, one person enrolled through our plan sponsor Web site, and two enrolled through our voice response unit," he says.
"Now, our relationship manager who works with this particular employer can go to the plan administrator and say, 'Okay. We still have 293 people to go.' The next step is to send a postcard, for example."
The next step
Depending on the response, the next step after sending a postcard might be an on-site visit by a MassMutual communication specialist equipped with new technology designed to get people to enroll or make changes on the spot.
At press time, MassMutual Retirement Services was pilot-testing its new e4 wireless enrollment system, which stands for electronic enhanced enrollment experience.
The technology, developed with San Diego-based Ameranth Wireless Inc., creates a secure wireless network at an employer's office, enabling participants to use specially programmed hand-held pocket PCs, pre-populated with their personal information.
Simulating the experience they would have if they enrolled in a plan on the Internet, the information participants enter into the hand-held device is fed wirelessly to a laptop computer operated by a MassMutual specialist.
The specialist can monitor participants' actions in real time and tailor the instruction accordingly.
For example, the specialist can see the breakdown of participants' investor profiles and deferral percentages and talk about those topics. Or, the specialist can see which employees are having difficulty completing specific steps in the enrollment process and help them along.
If people embrace this new technology, MassMutual might just make a difference in driving participation upward. On-site meetings are by far the most effective way to get people to enroll or make a change to their retirement plan, according to company studies. Roughly 54% of Mass-Mutual meeting attendees enroll, increase their deferrals, or roll into a plan within 60 days of attending, and they attribute that action to attending the meeting.
With a device that enables MassMutual specialists running those meetings to better understand participant behavior and address their real concerns immediately-as well as to make it easy for people to take action by simply punching a button-the company may actually change the world of retirement investing.
"When I was on the sales side, and I conducted these enrollment meetings, I would gauge the audience," says Sheridan. "You can look into someone's eyes and know whether they get it or not. But now we have technology that can eliminate any blind spots."
Whatever happens as a result of his actions, Sheridan isn't wasting any time moving forward and learning from the real-time information the company is now collecting.
While attending a sales conference shortly after he assumed his current position in October 2003, he read an article about a restaurant chain that was considering using hand-held devices for its wait staff to take orders-and he was inspired to develop e4.
"I was in front of some of the top salespeople in the country, and I literally drew e4 on a paper napkin," says Sheridan.
Then, on the plane ride back to Springfield, he drew the e4 suitcase, the hand-held device, the wireless network, and the router. Back in the office, he handed the idea on a paper napkin to his product solutions group.
An absolute joy
Eight months later, the company had a working prototype, he says. "It's very exciting. To be here only a year-and-a-half and to draw something on a paper napkin and see it out in trials in the field-it's an absolute joy."
A year from now, MassMutual will have learned a lot from using real-time analytics, campaign management and e4, he says. The information the company gathers may change its view of the world.
"We may understand some additional behaviors that we didn't pick up on-and that may require us to serve the data to our customers a little differently than we have in the past."
But the fact is, "we now have real-time knowledge in a company that's committed to making the investments in real-time innovation."
The Importance Of Facetime
When asked what constitutes good customer service, M. Dale Janes says, "First and foremost, it means listening to your customer." And the most effective way to listen to your customer is to have face time, he says.
The senior vice president of institutional and participant relationship management at MassMutual Retirement Services describes how he and the company's relationship managers visit their clients on a regular basis. These are employers who offer MassMutual retirement plans to their employees. "As much as the client wants us to be there-and as much as we need to be there-we spend time getting to know them, talking to them, and touring their offices and factories. That's how we connect and build relationships," says Janes.
MassMutual also recognizes the importance of face time with participants in their retirement plans. "We put our specialists in front of almost 65,000 participants last year," Janes adds.
The company also recently formed a client advisory committee composed of approximately two people from 10 client companies in a variety of industries and company sizes. MassMutual so far has held two on-site meetings with this group, and several conference calls to get feedback on various issues and initiatives.
"For example, we're rolling out new defined benefits financial reports," says Janes. "So we showed the prototype to a group of these clients and asked, 'What do you think? Does this work for you?'" Similarly, MassMutual asked for the client advisors' feedback on a new hand-held enrollment device the company was developing.
These interactions are a way to ensure the company's investments in customer service improvements are sound-while also engaging MassMutual customer service staff with the people they serve.
"Our staff has learned that the people they're dealing with every day are just normal, regular people," Janes says. "They're people who have a job to do. They're trying to help their employees prepare for retirement-and they're just looking for help to make that job easier."
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