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R&D on Messaging: Getting and Staying at Top of Mind Jonathan Zinman Dartmouth College. CFSI Miami. June 10, 2010. Overview of Talk. What we know. Getting from cutting-edge social science research…. …to value-added development in messaging to customers. What we don’t know.
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R&D on Messaging:Getting and Staying at Top of MindJonathan ZinmanDartmouth College CFSI Miami June 10, 2010
Overview of Talk • What we know Getting from cutting-edge social science research… …to value-added developmentin messaging to customers. • What we don’t know • Concepts for dealing with those unknowns • How we prove and refine those concepts
Messaging: What We Know • Consumer attention is limited • Sometimes profit when attention is low • Bank overdraft fee • Sometimes profit by grabbing attention at key moment • Debt “on demand” • Savings at 401(k) enrollment
What we know:Challenges to effective messaging • KISS: avoid information overload • Most people undervalue value-added in personal finance • The customer is not always “right”, especially at first • Many people lack clear goals • Even more people lack clear tasks • Even those with tasks struggle to stay “on”
Messaging: What We Don’t Know • Message what: optimal content? • Message when: optimal timing? • Message how much: duration, frequency? • [customization] • Message + what else: bundle? • Product (features)
Messaging: How We Learn • Take concept based on • Cutting-edge research • Business intuition/experience/constraints • Test it using randomized-control field trials • “gold standard” in direct marketing, retailing (both finance and goods), medicine • Evaluate and refine • Virtuous cycle
Experimentation & the Learning Organization:A Virtuous Cycle Experiment Innovate Evaluate
From R to D: Example • Phase 1 R&D project with 2 banks • Concept: bundle SMS reminders with programmed savings accounts • Test: randomize SMS reminders to save among new programmed-savings customers • Randomize content too • Evaluate • Balances increase; reminders that mention client goals are particularly effective • Reminders cost-effective for 1 bank
From D to R: Example • Consolidate, refine, build on Phase 1 • Phase 2 projects with several banks • Expand what worked in Phase 1 • Test new concepts • Timing • Duration • Bundle with goal-setting & planning tools • Different approaches for “auto-pilot” vs. “hands on wheel”?
Thank you!! • [extra slides follow…]
Message What?Thoughts on Crafting Content • Objective: salience • Tension: information overload • Strategies • Mentioning specific goals probably helps • How elicit those goals? • Need plan too? “A goal is not a plan” • What else, if anything? • Remind of plan? • Progress toward goal? Distance to goal?
Message When?Thoughts on Timing Right • Get people when they’re (il)liquid • Depending on what you’re selling • Get people when demand is high • Messaging, not education • Get people around task due dates • Get a captive audience
Message How Much?Breaking In, Wearing Out Tension: habit formation vs. tuning out • Early and often probably helps • But for how long? • Need to vary content over time to mitigate “tuning out”?
Message + What Else?Thoughts on Features, Bundles • Goal-setting tools • Plan-making tools • Linked accounts • Pathways to other products • Customization • Customer is not always right
From Research to Development: Impulse Saving • How critical are features that streamline saving? • Automatic transfers (“pay yourself”) • One-click transfers • If critical do we make these a strong boilerplate in the signup process? • E.g., how much do you want to auto-transfer from checking to saving the day after each paycheck deposit date? (click here if you do not want to auto-transfer) • If someone doesn’t sign up for auto-, do we remind them? • When, how often, and what’s the message?
From Research to Development: Pricing • Pilot testing can help pin down optimal pricing, given a bank’s strategic objectives and revenue-model • Free? • Fee? • Teaser pricing?
