Author Archives: Anthony Nygren

Cheese, Financial Advisors, and Tipping Points

Professionals today in the Retirement Industry operate in a market characterized by seismic change and turmoil.   With global stock markets almost back to pre-recession levels and moderately re-surgent developed-market economies (albeit through life-support stimuli from central banks and treasury departments), some Retirement Industry professionals may think their cheese has come back to where it was pre-2007.

In a recent Retirement Intelligence Report, Campbell Edlund and I make a case that someone has indeed moved the industry’s cheese…and it’s not coming back.   Job insecurity (blue and white collar) driven by accelerated global competition(e.g. India, China, Brazil, South Korea, Singapore)  and Americans’ un-sustainably poor savings behavior,  have collided with long-term trends in rising dependency ratios (ratio of working to non-working population) and longevity, and the gradual decline of the defined benefit system that ensures continued income for many households when their work activity declines and eventually stops (retirement).

These macro-trends are now magnified and perhaps hard-coded in the consumer’s  and the advisor’s psyche by the recent Great Recession.  The current financial crisis is un- precedented and represents a traumatic experience for the baby boom generation.  And after exposure to this and the dot-com bust, many financial advisors and consumers who survived the last ten years may have a mild case of post-traumatic stress disorder – a state that will influence  future advisor  behavior with clients and the behavior of their clients.  And this is the key point.  The dynamics of the market that financial advisors serve – the end-consumer – have changed.  Some of these changes are emotional in nature, and some mirror long-term demographic trends that create “tipping points”.  But make no mistake – we do not believe these changes are cyclical in nature.

To defend and grow market share in the future, manufacturers of insurance,  investment and retirement products must align their product and marketing strategies with the changes their distribution and intermediary channel are witnessing from the end-consumer.  The good news: advisors, Plan Sponsors, and consumers want your help in demystifying the path foward.  They want a trusted source that can solve what is in most cases a retirement income problem.

For more on marketing  best practices for adapting to these changes and capturing your share of this $5 Trillion opportunity, send me an email at dehrenthal@emiboston.com and request a copy of our just published Intelligence Report on helping retirement professionals capture $5 trillion in motion.

Email Re-Engagement Strategy #4: Looking for Answers and the Last Chance

Recent EMI blog posts discussed the growing importance of email engagement and the roles of preferences and pursuing new tactical and multi-channel approaches in re-engaging customers. But even after you deploy all of these tools, some customers will inevitably remain unengaged. Typical engagement best practice advice will tell you that this is the time to pull out the ultimate arrow in the re-engagement quiver: the Last Chance email. But this is a scary step, especially if you are a company that nurtures a relatively small email list. A Last Chance is, after all, the end of the road—a non-response shuts down all email communication.

For this reason, if the number of remaining non-responders is great enough to justify the investment, we recommend conducting primary research among the unengaged to learn:

  • Are they chronic non-responders? That is, do they sign up with other companies as well and then not view or click on emails?
  • If not, what are the content, messaging, and media elements that drive their response to other companies’ emails?
  • What is their actual, current level of interest in your product and their position in the buying process? 

If this research indicates that there is little hope that changes to the re-engagement program would deliver a strong return, then the Last Chance is an appropriate next (and final) step. If you do implement this tool, think of the Last Chance as a series of emails rather than a single one. Over the course of two or three emails, introduce the recipients to the idea that you will be ending their email communications and then incrementally increase the pressure on them to respond. With the final email in the series, you close the book on the non-responders and treat them like unsubscribers, secure in the knowledge that you have done everything you could to re-engage them.

PNC revamps credit card portfolio to focus on relationship rewards

Earlier this week, PNC introduced three new rewards credit cards, with bonus rewards tiers for cardholders who also have specific PNC checking accounts. This relationship rewards approach builds on PNC’s existing PNC Points program, which enables customers to combine points earned on credit card and debit card spending, as well as on various banking activities. Two of the three new cards are also in the PNC Points program; the other offers a cash rebate.

While Citi’s ThankYou Network is frequently cited as the archetypal relationship rewards program, PNC’s bonus rewards concept has more in common with the Chase Exclusives program. Both programs provide bonus earnings for their checking account customers, and underscore the primacy of the checking account as the key relationship product for banks. It is also notable that all three banks have built their relationship rewards programs using a card-based points architecture.

With the Federal Reserve’s proposed cap on debit card interchange, many leading banks have announced the discontinuation of rewards on debit card spending. From a relationship perspective, this means that some banks are refocusing attention on the checking account itself, rather than the plastic attached to it. In the case of PNC, it is telling that the level of bonus reward is based on the checking product owned, each with different minimum balance requirements (e.g., 50% bonus with PNC Performance Checking Account; 75% bonus with PNC Performance Select Checking Account).