Psychology combined with technology and the moments that matter

Unless you have been living under a very large rock for the past few years, right now you are probably suffering badly from regulatory reform fatigue. FoFA, MySuper, SuperStream…. It is exhausting just to write about it.

These regulatory levers being pulled by government are precipitating enormous change to our industry, not just from an operational perspective, but also from a competitive perspective. And this is where it gets really interesting.

As a consequence of SuperStream, the number of accounts in our industry is going to reduce dramatically and as a consequence of MySuper the differentiation between superannuation products is reducing. With these factors at work it is imperative that funds turn their attention to proactively engaging with their members if they are going to survive. Perhaps more importantly, there is an opportunity embedded in this shift of focus to deliver a new level of service that will delight customers and help them better prepare for an adequate lifestyle when they stop working. And so we now see the “Next Big Thing” in superannuation coming over the horizon – member engagement – but not as we know it. As our attention turns from the burden of compliance to enhancing member services in the increasingly competitive superannuation environment, a new definition of member engagement is emerging.

Defining member engagement

Our research has demonstrated that many organisations are yet to define member engagement, and as a result they have no way of truly measuring the success of their efforts in this area.

Some funds felt that acquiring the customer was a reasonable measure of successful engagement, while others felt that there was a need to receive rollovers or contributions before it was achieved. Others suggested that making an investment choice was a clear indication of engagement; however this measure can be problematic, particularly if there is too much switching or moving into inappropriate investments. In fact, I would argue that, when viewed in isolation, these steps represent a largely reactive perspective and a flat-footed view of member engagement.

I would offer the following definition of engagement: Each member demonstrating behaviour, at an acceptable frequency, that actively contributes to the enhancement and protection of their lifestyle when they stop working. This definition may not fit every business but the important point is that it must be clearly defined so that you have something to work towards and measure success against – if you’ve got nothing to aim for you’ll never know if you hit it.

At the end of the day, it is not the range of investments you offer, nor is it having an iPhone app that will differentiate you from your competitors and deliver the best possible outcome for your customers. To achieve these twin goals you must understand the behavioural preferences and patterns of your members and be able to find and act upon the trigger points when a member is ready to engage. If you find these points then you can be there for your members at just the right time with the just the right capability using the just the right method of interaction to make a real and significant difference to their lives. These are The Moments That Matter.

Finding The Moments That Matter

Today we have access to all sorts of tools and methodologies that can help funds identify and understand these behavioural patterns. There is so much data floating around both inside (e.g. customer interactions and decision making patterns) and outside the organisation (e.g. publically available government statistics, social media analytics) that can be harnessed and analysed to better understand members and more accurately predict future behaviour.
Big Data
To provide an example from outside of the industry, the [above] screen was taken from the Oakland Crimespotting website. It geographically depicts criminal events at a selected point in time. If you combine the information shown on this website with – for example – weather data, sporting results or political movements you can start to draw comparisons, find correlations and identify trends that will help predict future behaviour.

Once you find these behavioural patterns, you could effectively deploy resources at just the right time. Just imagine being at the wrong end of a violent crime and having a police car roll up because the data suggested there was a good chance there would be an incident in your area at around that time?

Coming back to our own industry, the same concepts can be applied. The data held about members by superannuation funds is significant. If this is combined with data from other sources, such as Sensis data, geographic data, micro or macro-economic data, we can find correlations between these sources and reach out to members when the time is right. As an example, a fund could combine member demographic data (age, postcode, assumed salary) and switching frequency, and find that people in certain suburbs, between certain ages, earning similar salaries had a tendency to switch more frequently than others.

What this analysis doesn’t tell us though is WHY they switch. What is happening in this population that leads to the behaviour occurring? Combine this internal analysis with external data sources such as investment market events, weather patterns, global news events or social media trends and we may find correlations that allow us to predict the behaviour of members in the future. Once we find these correlations we can deploy resources more effectively to make a positive difference to members’ lives. In this example it may be a simple email campaign to members within this micro-segment that encourages them to seek advice before switching. So you’ve got their attention, now what?

In the example above the imaginary fund has created a situation of relevance for the member. The call to action that they have received is carefully targeted to their particular situation. This is important because a member will only engage if the communication with them is relevant at this particular point in time.

The next thing to focus on is immediacy. Once you’ve reached out to the member – and because you did it at just the right time, using just the right words, they are ready to take action – it’s important that they have a mechanism to take action in a way that suits them. Increasingly this means providing more direct and immediate access, in a real-time manner, when it is convenient for the member.

Imagine a scenario in which you’ve observed a pattern of behaviour through real-time analysis of your data and as a result you have reached out to a member with a highly relevant call to action. As a result they have logged into their account through your website and used a calculator to see their retirement income projection. This is the critical point – providing an ability to immediately take action on that information. This could be allowing them to alter their investment profile in real-time or something as simple as pre-populating a letter for them to provide to their employer to start salary sacrificing into super.

Regardless of what capability you put in place, it must provide the ability for the member to act immediately. If you fail to do this then there is a very good chance that you have lost the opportunity to effectively engage with the member.

Psychology intersecting with technology

These scenarios provide an illustration of what is possible when we combine an understanding of the behaviour and underlying psychology of the general population with modern and capable technology system. In the increasingly competitive world of superannuation it’s not enough to just understand consumer behaviour. It’s also not enough to have cutting-edge on-trend technology. The competitive advantage of the future is accessed at the point of intersection of these two domains. It is here that we are able to create experiences that surprise and delight our members and provide outstanding retirement outcomes for them in the long term.

About the author

John Burke

John Burke

Head of Strategic Accounts

John Burke is the Head of Strategic Accounts for Bravura Solutions and is based in our Melbourne office. With more than 12 years of experience in financial services, he has built a deep understanding of the market and the operational environments of businesses competing in this industry. John’s responsibilities include identifying and pursuing opportunities to address business issues for organisations in the wealth management industry.