SRI 220: RETIREMENT MARKETING AND BUSINESS ACQUISITION

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1 A u g u s t 6, P a g e 1 Associate, Secure Retirement Institute (ASRI ) Fellow, Secure Retirement Institute (FSRI ) SRI 220: RETIREMENT MARKETING AND BUSINESS ACQUISITION SRI 220 Retirement Marketing and Business Acquisition introduces students to the participants in the marketing process and takes them through the general steps in the business acquisition process for both institutional and retail markets. MODULE 1: INTRODUCTION TO RETIREMENT MARKETING Describe the primary stakeholders in the retirement marketplace and the role each plays in providing retirement solutions Understand customers needs for retirement solutions, their purchase behaviors, and how provider companies create and maintain relationships with retail and institutional customers in order to satisfy those needs Understand the strategies provider companies use to segment markets, differentiate their brand or products to gain competitive advantages, and monitor changing market conditions to ensure long-term success Understand the role of promotion in retirement marketing and describe promotional tools including advertising, promotion, publicity, and personal selling and strategies provider companies use to generate business Lesson 1: Retirement Marketing Overview Complexities of the retirement market: distinctive needs, markets, and products that require coordination of activities and information across multiple entities Market stakeholders: plan sponsors, sales facilitators, service providers Marketing principles: marketing mix, marketing function, marketing environment

2 A u g u s t 6, P a g e 2 Lesson 2: Customer Selection and Management Market and competitive intelligence, data mining, and predictive analytics to identify market opportunities The importance of comparative advantages and market positioning in market selection Types of market segmentation: geographic, demographic, benefit, behavioral, psychographic, and firmographics, and how each is used for target marketing Relationship marketing to create value for customers that results in loyalty and retention Lesson 3: Retirement Marketing Communications The communication process Marketing communication objectives: to educate, create relationships, and build brand equity Establishing and maintaining a company brand Integrated marketing communications strategies Types of media used: print, digital, broadcast, and social media Compliance Lesson 4: Distribution Strategies Distribution channel strategies Benefits/advantages of various channel options Interrelationships among channels Distribution intensity and channel management MODULE 2: PRODUCT/PLAN DESIGN AND DEVELOPMENT Learning Outcome: After completing this module, students will be able to Describe the steps in the new product development process and the major types of new products Understand how provider companies design, develop, and implement retirement savings and income products/plans for institutional and retail customers Describe how insurance companies develop annuity products Lesson 1: New Product Development The product development process: product planning, comprehensive business analysis, product design, product implementation New product strategies: innovation, improvement, immitation

3 A u g u s t 6, P a g e 3 Lesson 2: Institutional Retirement Savings Plan Design Qualified retirement plans: review of requirements (ERISA, DOL, IRC), benefits, plan features Pension plan design: nondiscrimination requirements, Social Security integration Plan Selection: RFP process Creating a Plan Platform: investments (goals, risks, selection), plan administration/recordkeeping systems, asset management models, maintaining plan assets Plan Features: basic definitions, operational features Plan Documents: application, basic plan description and adoption agreement, SPD, etc. Plan Installation: disclosure documents, participant enrollment, strategies for encouraging participation Lesson 3: Retail Retirement Savings Plan Design Small employer plans: 401(k)-based and IRA-based options Pre-approved plans: types, elements, advantages/disadvantages, plan selection Plan installation Individual retirement options: IRAs, self-directed plans, prohibited transactions Lesson 4: Annuity Development and Design Structural features: premiums, guarantees, ownership rights, tax treatment Contractual features: provisions (surrender, nonforfeiture, beneficiary, loans), payout options Financial design: costs (operational, distribution cost of benefits), contract guarantees, interestcrediting rates, revenues (fixed/variable) Design testing Design review Regulatory approval: contract provisions, disclosure documents; IRA requirements New business processing MODULE 3: BUSINESS ACQUISITION Describe the business acquisition process for both institutional and retail markets, including the roles and actions of major participants in the process Describe the personal selling process, its benefits, disadvantages, and unethical sales practices Describe compensation methods Lesson 1: Business Acquisition in the Retail Market

4 A u g u s t 6, P a g e 4 Personal selling in retail retirement markets Developing a value proposition The personal sales process Suitability requirements and fiduciary standards Ethics and unethical sales behaviors Commission-based and fee-based compensation methods Lesson 2: Business Acquisition in the Institutional Market The roles of plan advisors and service providers in business acquisition Types of plan advisors and desirable characteristics Types of service providers and typical services provided Organization of marketing operations The steps in the business acquisition process Retirement plan costs and how service providers are compensated MODULE 4: EVALUATING SUCCESS Describe the steps involved in measuring performance and the metrics service and product providers use to evaluate customer satisfaction and product/plan performance Describe how provider companies develop customer experience management (CEM) programs, how they use those programs to create, maintain, and manage long-term relationships with retail and institutional customers, and how they measure program success Lesson 1: Measuring Marketing Success Measurement process: identifying indicators of success, setting goals/objectives, linking success to business processes, creating internal metrics, evaluating performance Measures of customer success: customer satisfaction levels, retention rates, profitability, LTV Measures of retirement plan success: participant outcomes (participation rates, satisfaction, deferral/contribution rates); retirement readiness (replacement ratios, cash flow forecasts, security thresholds); plan health (costs, benefits) Reporting & tracking performance: dashboards, balanced scorecards, heat maps Measures of plan investment performance: Treynor, Sharpe, Jensen ratios Lesson 2: Customer Experience Management

5 A u g u s t 6, P a g e 5 Challenges and benefits of CEM programs CEM requirements: shifting focus of people, processes, and systems from products to customers CEM architecture (technical architecture, application architecture, data architecture); data analytics Comprehensive customer profiles: content, uses Customer strategies: satisfaction/loyalty (service/fee variance, mass customization), profitability (cross-selling/up-selling), LTV (retention, development, nurturing, reallocation) CEM program implementation: direct conversion, parallel conversion, phased conversion, pilot conversion Measuring program success: standard measures (ROI); new customer metrics (likelihood to recommend, NPS)