Managing Director, Paul Nelson talks about the major changes affecting the superannuation industry that were announced in this month’s budget. How will your brand positioning and marketing be implicated? How can brand research help in navigating these changes?
In the recent budget, we saw some of the most fundamental changes to the superannuation industry we have seen in many years. These changes came as quite a shock as the industry was really expecting an extension of the early withdrawal scheme, which remained largely untouched. This overhaul is significant, especially to marketers and brand owners relying on the easy growth in members and funds that previously came through new members when they were changing jobs. Organisations who relied on the easy growth that was previously available will find this is now largely extinguished.
Let’s briefly run through the changes before we make some suggestions on how brand research might assist you and your brand as you work to navigate through this new operating environment.
The changes have come in under the title Your Future, Your Super and they set out the Government’s claim to save Australian workers an estimated $17.9 billion in fees, when they commence on July 1 2021. The Government’s changes come with bold promises to “create more competition, which will drive down fees, weed out poor performers and increase retirement savings”. These changes include:
What are the implications of this on brands and marketers and how might research help?
The need to understand your members, needs, wants, motivations and concerns has never been greater. With change like this comes both risk and opportunity. How informed are you in relation to your members will determine whether you win or lose members and subsequent funds flow. Included here is a detailed understanding of what’s not just important to your members, but how well you are performing against these same attributes and drivers.
Brand research allows you to distill your brand down to its pure essence, finding the unique space your brand can play, dramatically separating you from the superannuation category’s sea-of-sameness (insert stock shot of retirees and footprints on the beach). A strong brand shapes perceptions and influences actions to whether you stay or leave your fund. Research can inform the development of a growth focused plan and tighter marketing communications. By understanding your brand and members needs more clearly, you can more effectively communicate externally too. Focus groups can inform breakthrough creative that separates your brand, captivates your audience and triggers actions that grows member numbers and funds inflow.
Apart from the efficiency benefits the research brings, it can also avoid the wrath of the regulators around the “sole purpose” test. This test is to ensure that all activities undertaken by a super fund are to safeguard and grow retirement savings. The industry came under heavy criticism as part of the Hayne Royal Commission for the volume of members investment returns being invested in advertising and sponsorship activities. Through the research data and analytics, you may be able to more easily demonstrate how your marketing investment is benefiting members by highlighting the key benefits of your fund whilst identifying the weaknesses inherent in competing fund performance. Obviously, the last thing any member wants (along with the regulator) is to be stapled to a non-performing fund for life.
In the context of employer branding
The requirement for superannuation funds to meet an annual performance test has been discussed for some time, but now as a result of these changes has now effectively been brought into sharp and immediate effect. There is no avoiding poor investment performance, and nor should there be, so the brand’s role and the role of brand research is to ensure the business has the best and brightest fund managers connected to, or part of the organisation.
Increasingly the most celebrated and coveted services brands all share one thing now more than ever – their emphasis on culture. And one of the primary reasons for this is that employees are more indiscriminate than ever. Strong services brands treat employees more like customers and less like resources. But how do you understand what it takes to attract and retain the best and the brightest – culture and climate and employee brand research. Insights through this research allows all services firms to reap the benefits of a highly engaged and passionate workforce. By understanding your internal or employee value proposition through research enables you to attract and retain the best people within the industry. It helps the firm attract and more than its fair share of the most talented recruits at all levels.
For funds considering consolidation or merging
It is well known that the regulator has a view that smaller funds should consolidate, or merge and the Government may have initiated some of these changes with a view to enable this. For these funds, there needs to be a research informed focus on being very clear on your narrative, especially around the member and to a lesser extent employer value propositions to ensure they are credible, relevant, unique and sustainable. The alternative suggests that without this their proposition will simply be subsumed within the larger, merged entity or fund.
A clear brand purpose matters more than ever
Understanding who you are, what you stand for and why this matters has never been more important and these changes highlight this fact. Given the turbulence of 2020, even if you thought your brand was clear, this may well have well changed. Being clear on purpose, vision, values and what your stakeholders need, want and expect from you has never been more critical. Again, if you’re not sure of this, or you believe it has changed, then research will be hugely beneficial.
At BrandMatters, we have a deep understanding of financial services and has completed more than 400 individual projects in financial services including work completed for AMP, Aware Super, Tasplan, and Legal Super.
Contact us to learn more.
