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Low retirement confidence, decline in satisfaction among Super fund members

Tue, 11 Oct 2022 20:50:46 +0000

Sam Monteath

The customer experience of Super fund members declined in all key measures, and retirement empowerment weakened, the latest results of the CSBA FEAL Superannuation CX Benchmarking report has found.

The report, comprising surveys of 5,426 individual fund members from 20 Superannuation funds conducted in July and August 2022, also found that only 59% of those aged 55 and over had a high degree of confidence they would have enough money for a comfortable retirement.

Net Promoter Score (NPS) for All Funds included in the study dropped 11 points from +26 to +15, compared with the same period in 2021.

Overall Satisfaction fell from 8.1 to 7.7; Ease of Dealing fell from 8.3 to 8.0; And the Likelihood to switch funds rose from 17% to 23%.

One in three members disagreed that their fund empowered them to plan and prepare for retirement, compared to one in four members in 2021.

And the confidence of having enough money for a comfortable retirement was low, scoring 6.6 out of 10. This dropped to 6.3 for females (6.9 for males) and 5.7 for members without recent fund contact (6.6 for members with recent fund contact).

CSBA CX Director of Finance, Sam Monteath said that while it was no surprise to see current market volatility negatively impact member sentiment, it was now crucial for funds to proactively offer members reassurance using timely and meaningful interactions.

“Acknowledging members’ specific concerns in the current climate; transparent communication around investments and fees; and age-appropriate communication using their channels of choice, are key to building trust and loyalty,” she said.

“Especially since ‘Trust’, ‘Excellent Financial Returns’ and ‘Making Members Feel Valued’ continue to be the top three key drivers of Overall Satisfaction and NPS.”

Intention to switch is on the rise

When asked about their past switching considerations and intentions to remain with the fund in the year ahead, 25% of members with recent fund contact said they had considered switching funds in the last 12 months. And of those who considered a switch, 63% said they were likely to complete the switch in the next 12 months. Compared to the same period last year, 18% of members considered a switch, and 49% of those intended to switch in the year ahead.

The 35-44 age group is at the highest risk of switching, with 30% indicating they were likely to switch in the next 12 months, compared to 22% in the same period last year. The 25-34 age group is also a high-risk group, with 26% indicating they were likely to switch in the next 12 months (unchanged from last year).

Trust featured heavily as both a key reason to stay with a fund long-term (24%) and as one of the most apt descriptors of one’s fund (29%) – “I trust them to act in my best interests.”

Retirement empowerment has weakened

In the area of retirement empowerment, 33% disagreed that “The fund empowers me to plan and prepare for my retirement” compared to 27% in the same period in 2021.

Across the demographic groups, under 55s, females, shorter term members and those in a default investment mix were more likely to disagree their fund empowered them.

The power of making meaningful interactions

Timely and meaningful interactions are critical in adding value, building trust and loyalty.

“Be proactive. Use the right customer insights, personalise your approach and create timely opportunities to engage each customer,” said Ms Monteath.

“Members want relevant information and reassurance that they are with the right fund for them.”

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Trust and loyalty for Super funds hit new low: CSBA benchmarking

Sun, 07 Aug 2022 21:45:01 +0000

Sam Monteath

The customer experience of Super fund members suffered a substantial fall, the latest results of the CSBA FEAL Superannuation CX Benchmarking report has found.

Customers were impacted in part by the announcement of the failures of the APRA performance test of MySuper products, and increased merger activity in the sector, said CSBA CX Director of Finance, Sam Monteath.

The report, comprising surveys conducted in February and March 2022, found that the Net Promoter Score (NPS) for All Funds in the study dropped 11 points to +15 from July 2021. Overall Satisfaction fell to 7.8 – its lowest since February 2020 (when the pandemic hit, and sentiment deteriorated). And Ease of Dealing saw a similar pattern.

The survey responses were collected from 5630 individual fund members from 20 superannuation funds. Online surveys of members of large funds were also completed to provide further benchmarks.

The impact of negative news and merger plans

Explaining that uncertainty among members and the use of the media and third-party sources impacted Sentiment, Monteath said it was more important than ever before, that funds communicated directly and clearly with members.

“With members continuing to rank Trust as the key driver of Overall Satisfaction, it was no surprise to see a decline in Sentiment across key metrics across the sector,” she said.

“Loyalty was also in decline. Switch consideration in the past 12 months, as well as likelihood to switch in the next year increased by five and six percentage points respectively.”

All demographic groups, except for longer tenure members, saw at least one in five being likely to switch funds in the next year, though for female members, and those under 55, this rose to one in four.

Key drivers

Trust and Excellent Financial Returns remained the key drivers of Overall Satisfaction and NPS (advocacy). However, the average member rating for Trust fell sharply by 0.5 points, from 8.4 to 7.9, compared to July 2021.

The relative importance of Trust (15%) and Excellent Financial Returns (13%) as key drivers of Overall Satisfaction increased by one percentage point each; while the relative importance of Trust as a key driver of NPS (advocacy) increased by three points and is now equal to the main driver, Excellent Financial Returns (17%).

Making Members Feel Valued remains the third key driver (12%).

Retirement empowerment

In the area of retirement empowerment, female fund members had the lowest agreement across all the demographic cohorts, with over one-third (35%) disagreeing with the notion that their fund empowered them for retirement. This rose sharply from 27% in the previous survey (July-August 2021). Agreement among younger fund members also fell further; 34% disagreed their fund empowered them to plan and prepare for retirement (from 31%).

Younger members rated lower than their older counterparts, with the average satisfaction at 7.6 out of 10. Younger members are typically more difficult to engage as retirement is often considered too far in the future with action appearing less tangible due to the long-term nature of super and retirement investments. Younger members also often have competing priorities, cost of living pressures, and lack of knowledge regarding superannuation, which all contribute to less loyalty.

The importance of Reassurance

Effective communication is key to rebuilding trust and loyalty among members.

“Don’t shy away from discussing trust in a climate of volatility,” says Monteath. “Put a human lens on the topics that are important to members. Be specific – use relatable examples that engage with your different member cohorts.”

“Members want proactive information and reassurance that they are with the right fund for them.”

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Customer sentiment for Super funds improved, but only for top CX performers

Thu, 28 Jul 2022 21:35:05 +0000

Sentiment – how the interaction made the customer feel – rose for the Super funds performing best on customer service, according to the latest SenseCX benchmarking report^[1] published by CSBA. (See Figure one)

Figure One

In the 12 months from July 2021 to June 2022, the top five sector performers’ Sentiment score climbed an average of 3.4 points from 62.5% to 65.9%. However, the median benchmark for Sentiment was flat, at 62.2%. The score for the lowest performers, at 61.5%, was also flat.

SenseCX is a Quality Assurance framework that measures the quality of customer interactions with organisations, based on three indices – Success, Ease and Sentiment.(See Figure two)

Figure two

A total of 203 major Australian companies from seven sectors, including 20 super funds, were covered in the study. The results, comprising 11,590 independent assessments using 30 key customer-focused behaviours for each interaction, were completed via anonymous telephone conversations.

Wake up call for under-performers

Meanwhile, the Super sector continued to struggle with Ease – the effort a customer expends to achieve their goals.

The top five performers scored an average of only 33.5%, the Median benchmark at 32.6% and the lowest performers at 26.6%.

And the Ease scores for the lowest performers have continued to slide. From 32% in June 2019, to 29.5% in June 2020, to 28.4% in June 2021, to 26.6% this year.

Their biggest challenges included offering ownership at the start of the call; seeking permission to ask questions as part of the discovery phase; and going above and beyond by answering unasked questions.

For the overall SenseCX score, the top five sector performers improved an average of two points, from 55.8% to 57.8%. However, the median benchmark was flat, at 53.2%, due to the lowest performers dropping half a point on average, to 50.1%.

Managing Director of CSBA, Paul van Veenendaal, said the latest results show that the poorest performers have slipped compared to 12 months ago, and will continue a downward trend without intervention.

“When organisations focus heavily on compliance and process, it’s usually at the expense of human engagement.”

“Our research shows that empathy and emotional connection drive customer satisfaction and behaviour,” he explained. “Providing a pathway for further assistance at the end of the call is a simple way for funds to improve.”

“Emotional connection – how a customer feels – is critical to building trust, which ultimately leads to brand loyalty. But it’s going to take a cultural and mindset shift to make an impact.”

The Super sector is outranked by the education, commercial and water sectors

There was a disparity in the overall SenseCX scores among the top performers across the sectors. Ranked #1 is Water with a score of 82.8%. Followed by 81.6% (Higher education), 75.5% (Local government), 73.7% (Energy), 63% (Superannuation), 62.8% (Commercial) and 61.5% (Banking).

While the top five Super performers improved by two points, the top performers of other sectors also improved an average of 1 to 2.7 points for the Water, Local Government and Commercial sectors.

And while the overall quality of customer interactions (median benchmark)³ remained unchanged, other sectors⁴ made gains. (See Figures three and four)

Figure three

Figure four

Education improved 2.8 points (from 58.7% to 61.5%); Commercial increased by 3.1 points (from 54.3% to 57.4%); and Water gained 0.7 points (from 56.1% to 56.8%).

Time for action

As van Veenendaal puts it simply, those at the bottom are getting worse at a time where customer expectations are rapidly increasing.

And with investment returns becoming more normalised across funds, the need to differentiate on member experience becomes pivotal – starting with member engagement.

“The importance of implementing a continuous cycle of improvement using regular analysis and independent feedback on customer interactions cannot be overstated,” he said.

“Pleasing your customer has got tougher. The pandemic raised the bar for customer expectations. And organisations must work harder to make each interaction count.

“Because your customer will be comparing their experience with you, to their last best experience – and that could mean the likes of Amazon, Uber Eats and Air BNB.”

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