This theme is something we discussed during our June 2017 Food for Thought event because, when it comes to pensions, many people aren’t saving enough for the future. How do we influence behaviours, change perceptions and encourage people to start thinking about where they want to be when they stop working?
Psychologists say we have two people living inside us; the ‘present me’ and the ‘future me’ and many of us struggle to relate to the latter. Most people tend to favour the ‘present me’, acting on the now for instant gratification and the ‘future me’ can be a bit of a stranger. It’s easy to feel disconnected from the future-self and it’s this mindset that can impact on the way long-term decisions are made.
Visualising the future is difficult for most of us, because it can seem so far away. It’s too easy to adopt a ‘think about it tomorrow’ attitude. As we know, tomorrow may never come! Maybe we need to think about bringing the future closer and rewarding people along the way. Creating smaller milestones to celebrate can be a way of motivating people to act on long-term saving plans.
Breaking time into more manageable chunks, such as including a ‘how many pay days until retirement’ figure on your employees’ benefit statement, can also make it easier for people to visualise their future. Previous research has revealed that people react more to time that is measured in days rather than months or years. In one study, participants were told to imagine they had a newborn child, and that the child would need to go to college in either 18 years or 6,570 days. The researchers found that those who measured in ‘days’ planned to start saving four times sooner than those who measured in ‘years’ - pretty compelling evidence! All in all, we need to ‘engage, educate and excite’. Organisations need to step into the shoes of the consumer and change their outlook to understand what people want, not what people need. Creating personalised content and delivering the right message to the right person is vital too. Generalised content and talking to the masses doesn’t work. To really engage and get people to think about their own future, companies need to segment data and deliver personalised communications.
There are a number of other ways to engage employees with long-term savings, and overcome inertia and a natural bias towards the present. Recognising consumer habits, breaking down barriers and making it as easy as possible to take action is crucial. Imagine receiving a stack of paperwork, having to read through it, manually complete forms and then walk down to the post office, buy a stamp and post it back. That’s a lot of effort, isn’t it? You might be inclined to do nothing. But if you received this communication online and could simply click a button to respond, wouldn’t you be more driven to take action? Making the customer journey as seamless as possible and removing obstacles can automatically lead to better engagement.