TIAA-Cref Crafts Boomer Social Networking Site
Article published on Dec 19, 2007
TIAA-Cref hopes to make a connection with its baby boomer clients by encouraging its retirement plan participants to make connections with each other.In February, the firm plans to invite 20,000 customers over the age of 50 to participate in a social networking site, Myretirement.org.Rather than focus strictly on investments for financial planning, participants will be invited to post their musings across various channels including family and life, health and fitness, travel and relocation, work and money, volunteering and social activism and “redefining retirement.”Each area will be moderated by a “Role Model,” or a retired TIAA-Cref customer whom the company has deemed to be an expert. About 500,000 of the 3.3 million TIAA-Cref customers currently collect retirement income, according to the company.And while TIAA-Cref compliance representatives will also monitor the site, none of its products or services will be advertised, according to Jamie DePeau, senior vice president of marketing at the firm. The goal, she says, is to help TIAA-Cref customers adapt to the ever-changing concept of retirement and to present a holistic set of tools.“We have a longstanding relationship with these people and we are interested in building a lifelong relationship,” she says.Building such relationships can also engender loyalty, analysts agree, potentially resulting in assets rolling out of the retirement plans into the retail product line. More importantly, analysts agree that the social networking site is a savvy use of the interactive marketing opportunities unique to the Internet, and they expect other firms to soon follow suit.“Consumers like to be empowered,” says Dennis Gallant, principal and founder of Gallant Distribution Consulting. Consumers’ expectations have been shaped by their experience in the retail market place, where the explosion of blogs and other online tools has created a forum for people to exchange their views on practically everything.The Internet has diluted the power of the consumer brand, says Ray Villares, interactive marketing managing director at Acquity Group, a Chicago-based digital marketing firm.Companies that provide a portal that speaks to consumers’ needs and offers objective or peer-generated advice will have an advantage, he says. “It’s about convenience,” Villares says. “Your website can subliminally communicate how customer-oriented you are.”The more complex the topic, the more assistance and feedback people crave, and there are few topics more nerve-racking or complicated than figuring out how to spend — and finance — the rest of one’s life, Gallant says.TIAA-Cref’s customer base lends itself naturally to such a community-driven mind-set, since the company’s 90-year heritage comes from delivering retirement plans at low cost to educational institutions and nonprofits, he says. To help engender that close-knit sense, TIAA-Cref plans to recruit heavily among participants in Lexington, Ky., Pittsburgh, Pa., and Ann Arbor, Mich., according to company spokeswoman Abby Cohen.TIAA-Cref has faced its challenges in attracting new assets, says Morningstar analyst Christopher Davis. Despite efforts to broaden its retail reach, most of the company’s $430 billion under management is locked into qualified retirement plans. Competitive pressures in the nonprofit retirement plan space from companies such as Vanguard and T. Rowe Price, along with outflows, subpar performance and the loss of some large state-sponsored 529 college saving plans programs, have proven to be difficult challenges for TIAA-Cref.Still, Davis notes, while the company has struggled to boost its retail brand recognition, its retirement plan customers consider the company “one of the good guys” and “an advocate.”By and large, asset managers have underutilized such Web 2.0 tools, says Lee Kowarski, a managing director at consultancy kasina.“The idea of community is so important, particularly around retirement planning,” he says. Although social networking may be most readily associated with the school-age set, Kowarski says those over 50 years of age are online too.In fact, of the 34.7 million Americans between 50 and 64 years old who went online last month, a whopping 20.2 million of them visited social networking sites, according to data from comScore, a Chicago-based firm that tracks online consumer behavior.On average in November, each of those boomers spent 142.8 minutes, or nearly two and a half hours, on such sites, comScore data show.Sites such as AgingHipsters.com3, GenPlus4, IRememberJFK.com5 and Saga Zone6 each testify to the appeal of social networking among boomers. Eons.com7, for example, has registered 600,000 users since it launched in July of 2006, according to a company spokesman.It’s not only boomers who are motivated by peer communication and online communities. FRC research shows that retirees and those over the age of 50 command about 59% of the industry’s marketing attentions when it comes to retirement income planning. Meanwhile only 12% of such efforts are geared toward those between 30 and 40 years old, and 7% at those under 30.