“The problem is we try to unravel the Mighty Infinite using a language which was designed to tell one another where the fresh fruit was” Terry Pratchett
Fine, I’ll admit it. Most financial services providers we work for are not necessarily trying to ‘unravel the Mighty Infinite’ for customers. Even they would admit that that is a little beyond their purview. However, they do have to try and communicate about a complex and technical subject to an audience that often does not have much motivation to engage with what is being said, nor has a great deal of experience in the subject matter. And they are not always doing a great job.
This is not a new problem for the industry, but it is one that is getting an increasing level of attention over the last year or so. Research briefs we have been receiving from the pensions sector focus on communications, and how best to attract the interest of customers without scaring them away with reams of jargon and a deluge of regulatory fine print. Clarity of language is of the upmost importance; especially now automatic enrolment has brought so many more consumers into the industry.
Firstly, the positives. financial providers are acutely aware that communications must align with the FCA’s consumer outcomes guidelines. The industry as a whole is obviously doing a lot of work around making communications more accessible, and this is starting to have an impact. Our recent 2017 ‘Retirement Choices’ research gave us the opportunity to ask DC pension holders (aged 55+) what they thought of recent communications from their pension providers, and on the whole they felt that both the presentation and content of direct mail has been improving. The increased use of graphics, higher production values and increasingly tailored content means communications are noticeably better than they used to receive.
However, there are still issues to be addressed:
1) Too much information. When a customer receives a letter or annual statement where much of material is related to financial regulations, often it is going to end up in the bin or filed away, never to be seen again. The overwhelming amount of information completely short circuits any desire to engage with comms material, especially if customers do not think it is an ‘urgent’ matter (e.g. they are retiring very soon).
2) See things from the customer’s perspective. There are complaints that the communications material can be overtly from the perspective of the company, focusing on brand heritage or individual product offers. Customers want a different message hierarchy, one where the focus is on their needs and why services and products are helpful for their specific situation.
3) Not bespoke enough: Few customers pay much attention to generic content anymore. There is an expectation that, as a provider that has access to their savings data, you should be able to provide something more tailored to their situation. Expectations are increasing, and customers are now expecting personalised material, which goes beyond simple graphics of their expected savings growth.
4) Less jargon, more clarity. There are still issues around trust in the pensions sector, mainly due to industry scandals (e.g. BHS) and the wider financial crisis. This is not to the extent of lack of trust in the banking sector, but as pensions are a lower-touchpoint industry than banking there are fewer opportunities to impress. When customers do not fully understand what you are saying, for instance if you start using jargon or technical language the default is that you are trying to pull the wool over their eyes. The moment words such as ‘crystalise’ or ‘UFPLS’ are used, you run the risk of creating a barrier between yourself and the customer.
While ideally you are going to need to tailor your research approach for each individual piece of direct mail, we recommend testing the following areas as a matter of course:
• The simplicity of language used. Do your customers fully understand what your products and services offer? Do they fully understand the risks and benefits? Have you fulfilled your TCF requirement?
• Messaging hierarchy. Do your customers feel the focus is on getting them the best deal or most helpful product, rather than just trying to make money out of them? Have you demonstrated you are considering them as an individual?
• Behavioural impact. Are your customers clear about what to do next? Have you communicated a clear call to action? Could the structure of your material be better arranged to prompt a behaviour?