Times have changed for superannuation brands. Renewed regulatory changes have empowered members to make more informed and active decisions about how their retirement savings are managed. Superannuation brands must consider not only their performance but their corporate social responsibility credentials and member priorities. How well funds understand their members’ needs has never been more critical, and beyond these capabilities, a unique and differentiated offering is essential to help superannuation brands stand out from the crowd.
A powerful way for funds to differentiate themselves is via enhanced and more effective member communications and engagement. According to Mercer Australia, only 54% of superannuation executives believe their member offering is unique and sets them apart from the competition.
Superannuation brands must find a way to connect and remain consistently present and relevant to members throughout their careers. They need to be considerate of member needs no matter what age – 18, 36 or 50 years old, member needs will constantly change and the new choice world that funds find themselves in is more likely to promote consideration amongst members about whether the fund they started with at 18 is the best fund for them at 36, 50 and beyond.
In overall terms, to respond to these new challenges and build more distinctiveness into both brand and market offering, superannuation brands will need to have a deeper understanding of their members’ needs, wants, motivations and concerns. With change comes both risk and opportunity. How informed you are in relation to your members will determine whether you win or lose members and subsequent fund flows.
Brand research allows you to distil your brand down to its pure essence, finding the unique space your fund’s brand can occupy that will dramatically separate you from the similarity of other funds across the category. A strong brand shapes perceptions and influences decisions such as whether to stay with an existing fund or leave for a different offer.
By using research, your brand will be able to inform the development of a growth-focused plan that can help tighten marketing communications and strategy. By understanding your brand and members more clearly, you can ensure your communications are more effective and consistent, across both internal and external stakeholders.
Apart from the efficiency benefits that research can provide, it can also allow your fund to avoid the wrath of the regulators in their ‘sole purpose’ tests. These tests are in place to ensure that all activities and investments being undertaken by a superannuation fund are to safeguard and grow retirement savings for members.
The industry came under significant pressure and criticism as part of the Financial Services Royal Commission for the volume and percentage of member returns which were being invested in advertising and sponsorship activities, neither of which directly benefited their members.
The marketing of superannuation brands has always been a contentious issue, given their legislated sole purpose to generate investment returns for members. But with greater marketing, superannuation funds can achieve greater economies of scale, increasing the pool of capital they have to invest for their members.
In superannuation, performance obviously matters, and pointing to the scoreboard has long been an effective defence used by brands when asked about ethical and transparency concerns. It was a line adopted to great effect by AustralianSuper Chief Executive Ian Silk at the Financial Services Royal Commission, for example, when he said the outperformance of industry funds over retail funds justifies their multimillion-dollar TV advertising campaigns.
Regardless, through research data and analytics, you will be more easily able to demonstrate how your marketing investment is improving member outcomes by highlighting the key benefits of your brand in the market, whilst also warning your members of the weaknesses inherent in the competitive environment.
For a number of years now, the superannuation industry has been awash with talk of change. Every year, the calls grew louder – underpinned by new developments that, at times, have been both startling and game-changing.
We are likely to see fewer overall brands in the sector, headlined by some very large funds, some moderate sized funds, and those in niche markets. There will be increasing competition, but likely more improved benefits for members with greater engagement between themselves and the brands they choose to align with. Understanding the unique makeup of these audiences is critical in this period as superannuation funds look to carve out a distinctive and sustainable position in the market.
It’s fair to say the level of change currently impacting the superannuation industry is unparalleled and likely to be the most significant it has ever faced. David Knox, Senior Partner and Global Pension Expert Mercer Australia said it best, “what happens over the next two years is expected to shape the industry for the next 20 years.”
At BrandMatters, our business is to help financial services organisations navigate their brand through the changing circumstances and uncover the insights that will guide a successful path forward. Now is the time to learn more about what will make your superannuation brand unique and compelling to your members. Feel free to reach out to BrandMatters to discuss your unique situation.
This article and insights are part of a larger deep dive into the trends impacting upon brands in the superannuation landscape. To learn more, feel free to download Part 3 of the Outlook for Financial Services Branding, where we explore the changing expectations for superannuation brands in greater detail.