Eyes on the Prize

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An educational program cracks the women's financial services market.

The Memo The phone was ringing off the hook for Jane Taffe, a marketing director at American Express Financial Advisors. In rapid succession, the complaints were pouring in from the company's 10,000 U.S. financial advisors. Although women were making an increasing number of major financial decisions, the company's marketing department didn't have an effective strategy for targeting the women's market with a retirement planning message. "You guys are missing the boat, you're missing the opportunity," Taffe heard repeatedly.

It was 1996, and while the company wasn't exactly ignoring the women's market, it certainly didn't have a cohesive strategy, says Taffe. It had a hodge-podge of unrelated programs: Brochures that had been "modified" to be more female-friendly, a series of educational seminars, and a speakers' bureau of female executives who could talk about their own financial planning experiences. "We had little individual pieces of things going on, but we needed to pull it together," she says.

Taffe started by compiling existing research about the women's market. She found that women control an increasing percentage of the nation's wealth. Today, for instance, women currently control 60 percent of the wealth in the United States and make up a full 40 percent of the population with assets of at least $500,000. She also found that 90 percent of women will be solely responsible for their financial decisions at some point in their lives. Her research findings created a convincing business case, and American Express Financial Advisors decided to design an initiative to focus their retirement planning message to women. But how to do it?

The Discovery Taffe started by bringing in the Harris Marketing Group, a Michigan-based company that specializes in designing integrated marketing programs for the women's market. Harris developed initial concepts, and by 1997, Taffe and the team were ready to start qualitative research. Hannah and Associates, a Minneapolis-based firm, moderated six focus groups in Boston and Minneapolis.

An educational kit which pulled together the best information about women and retirement generated the most enthusiasm. Respondents reacted to various brochures, pamphlets, and other information resources that would go into the kit. One clear winner: A paper slide-calculator called the ProcrastiMeter, which figures out how much of a hit your retirement account takes if you skip just one year of saving. (For example, if at age 30 you fail to put aside just $10 each week for one year, you'll have $8,194 less for retirement at age 65, assuming an 8 percent return on investment.) On the other hand, the women were less enthusiastic about including an offer to donate $100 to charity in the kit. "They told us, `You guys are the experts in financial services stuff, but we'll handle our donations on our own,'" says Taffe.

In 1998, Taffe commissioned a phone survey of 1,016 women over 18 years old. (American Express declined to disclose the name of the vendor.) A whopping 91 percent of women felt that financial services companies were failing to meet their needs.

Taffe now had the information she needed. She hired the Sandcastle Group in Minneapolis to develop a name for the program: Smart Choices. She tapped Foley Sackett, also in Minneapolis, to design a logo and create the tag line: Your Money, Your Future. This helped convey the essence of the program: Action-oriented advice that encouraged women to plan for the future. Foley Sackett also developed the overall look of the program - purple as the primary color, accented with a goldenrod yellow and green. "We wanted to create more of an emotional, warm feel," says Taffe. "The look and feel is not financial-services boring." In August of 1998, they were ready to launch.

The Tactics Today, women can enroll in the Smart Choices program in two ways: Through their advisors, or by responding to an unsolicited kit that the company sends to select female prospects - American Express card holders, for example. (To make sure the clients are serious, the company requires a $2,000 initial investment to enroll in Smart Choices, or a commitment to invest $100 a month.) The welcome kit includes a coupon for a free, personalized, retirement profile, which can be redeemed by making an appointment with a financial advisor, as well as a bundle of fact sheets. A particular crowd-pleaser: "Organize Your Financial Records in Ten Easy Steps."

Every other month, enrollees receive a Smart Choices oversized educational post card with a quick retirement planning tip from their American Express financial advisor. For example, one post card's face featuring a collage of women at different life stages says, "Fifty-nine percent of women have saved for retirement. That means more than 40 percent have not." On the back are 10 brief lines with information about a Roth IRA, signed by the client's personal financial advisor. The post cards keep a financial planning message in front of women on a continual basis, says Taffe. "Financial planning is an easy thing for everyone to put off, but it's especially easy for women," she says. "In women's very busy lives it's hard to get their attention, and the times when you can typically get their attention is not the best time to make financial planning decisions - usually when there's some type of crisis."

The Payoff After two years, Smart Choices has started to make a difference in the number of American Express' female clients. In 1998, 38 percent of its clients were from single women households. By 2000, that percentage had climbed to 46 percent. When American Express distributed the Smart Choices kit to the National Association of Female Executives, they received twice the response rate from NAFE's members than they would have expected based on prior experience with organizational marketing efforts. Also, about half of Smart Choices enrollees are over the age of 50. That's a significant achievement, because "in that generation, there's the perception that someone is taking care of financial planning for them," explains Taffe. To date, 15,000 women have enrolled in the program, and American Express awarded Taffe's team with a Tier 1 Quality Award, the company's highest honor.

Taffe's not resting on her laurels, however. Considering that American Express Financial Advisors serves nearly 1 million clients , "there's huge room for growth," she says. "But I think it's on the right track. We did our homework and are providing what women are looking for. We're off to a good start, but there's a lot of work to be done."

What the Critics Say Carrie Coghill, senior vice president at D.B. Root and Company, an independent financial advisory firm in Pittsburgh, says that through its post cards, the Smart Choices program does a good job of keeping financial planning on women's minds, not something they tend to think about in good times. "I'd venture to say that 80 percent of my single women clients have just come from some tragic experience - death or divorce," she says. On the other hand, single men are less likely to wait for a crisis, she says. They visit a financial advisor when they accumulate enough money to warrant it. This may be why women tend to lag in retirement planning. According to the "2000 Retirement Confidence" study from the Employee Benefit Research Institute, in Washington, D.C., women are less likely to have personal savings for retirement than men, less likely to have calculated what they'll need for retirement, and more likely to say that they're behind in their savings schedule.

But, as financially-savvy Boomer women and Gen Xers start to plan for retirement in earnest, says Coghill, this will start to change. Even today, "We never know what level of financial sophistication we're dealing with," says Coghill. The information that Smart Choices shares today may be too basic for sophisticated consumers tomorrow.

Jennifer Ridley Hanson, director of financial planning for Financial Finesse, a San Francisco-based women's financial education company, says that customization is increasingly important in the women's market, a feature that today's Smart Choices program lacks. Hanson points out that married women have very different concerns about financial planning than single women do. And, she says that women who are financially savvy may be offended by a "special" basic information program for women.

As women become more experienced at retirement planning, programs like Smart Choices will have to step up to their level of sophistication. But as a centerpiece for a women's marketing strategy for American Express Financial Advisors, the program fits today's bill.

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