The efforts of plan providers to control costs by shifting service delivery to plan web-sites and voice response systems means that many of the interactions that do occur are handled on an impersonal basis. In addition, many plan sponsors strongly discourage any “marketing” efforts directed at their employees, inhibiting the ability of plan providers to broaden and deepen the relationship they have with plan participants.

Despite these facts, plan providers recognize that in the normal process of plan turnover, job change and retirement there is a window of opportunity to establish relationships with plan participants and convert them into customers. Considerable effort has gone into trying to facilitate this transformation. These efforts include: account statements that are easy to use, available on-demand and contain personalized rates of return and other information; participant newsletters; re-enrollment and education meetings; as well as advice and planning modules available on the plan web-site. Many plan web-sites also contain links to information regarding other products and services available from the plan provider.

To date, however, these efforts have met with limited success. Spectrem research indicates that over three-quarters of plan participants who roll their balance into a personal IRA after a job change or retirement continue to select a firm other than the plan provider. In addition, a forthcoming Spectrem Perspective™, How to Cross-Sell to Participants, shows that the proportion leaving their balance behind in the previous employer’s plan has continued to fall (but more slowly) to 13% in 2007, compared to 16% in 2004 and 23% eight years ago.

Efforts to cross-sell other products and services to plan participants have been even less successful than capturing rollover IRAs, with only 14% of participants owning additional products or using other services offered by their plan provider (data will be updated in the new perspective).

With most participants saying they are very satisfied with the services received from their plan providers, the opportunity still remains to fine-tune and focus on cross-selling opportunities.

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