Friday, December 4, 2015

Is using social proof the secret to getting people to save more for retirement?



For years now we've seen stories about the fact that Americans aren't saving enough for retirement.  In fact it seems like some aren't saving at all.  It's a conundrum for financial services firms.

To get people to save more, for the past four years, Prudential has been trying to educate people about behavioral barriers that are getting in their way, such as procrastination and optimism bias.  No wonder they weren't effective.

Now they have announced that they are moving on to "urging them to act now by taking steps toward retirement readiness. "  Not much of a strategy if you ask me.

But, they may actually be onto something.  What they have done is to create a "Race for Retirement."  They have introduced a specific goal -- saving an additional 1%, and have created this website, which encourages people to take a pledge to achieve it.  And, it is keeping track of how many people take the pledge and how much money would be saved if they actually follow through.

Oh and did I mention that they are capturing names and email addresses when you sign up?

Interesting approach.  Take a look at the website and tell me what you think.  Would this approach encourage you to save more?



Gazdik, T. (2015, December 4)  Prudential Effort Encourages More Retirement Savings.  mediapost.com.  Retrieved December 4, 2015, from

9 comments:

  1. I think using social proof is brilliant in getting more people to save, especially since there are a good number of Americans who do not trust the financial industry. So, if insurance companies/banks show how others are saving as well as giving you an idea of how much you can actually save, the recommendation doesn’t appear to come from the financial institutions.

    I have to agree at first it didn't really look like a strategy, but they are using all of Cildani’s principles of persuasion, which I have listed how they accomplished this below:

    Consistency or Commitment – Prudential’s commitment is the “Race for Retirement” and they ask people to commit to saving by giving the person an actual scenario. In addition, Prudential kicks it up a notch by displaying names and email addresses to cement the commitment.

    Reciprocation – Prudential offered the challenge and once a person fills out the information, they feel obligated to follow through.

    Authority – Prudential is clearly an authority in financial planning.

    Liking – The “Race for Retirement” is a way to influence others by showing other like-minded people who want to save.

    Scarcity – Prudential cleverly reminds people that if you don’t save, you won’t have enough money when you’re ready to retire.

    This approach would definitely get me to save more.

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    1. I agree with Claudine here, and think that their approach is intersting and good. I like the website, it looks very professional and nice. The images and videos are very nice. I think the idea of making it like a challenge is great and will motivate people to join.

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  2. After looking at the website, it encouraged me to support the cause. The design and the graphics look nice, but in reality it didn't actually encourage me to save for retirement. The idea of the website is interesting and gives some facts about retirement but it doesn't really show me the real reasons why I should be saving. So, if I feel this way I can only imagine what other people must feel when they see the website. I think we will need something more powerful to the extent that shows the serious issues people could face if they don't save. Using a celebrity figure to talk about this serious issue of not saving money for retirement could also be another way to entice people to begin saving at least a little.

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  3. This website has use many persuasion principles such as social proof and consistency. However, I think this approach can be more effective if they can create a section in this website where they can put commons on it, and see how others achieve their goals.

    One thing that I do not like about the pledge is that the goal of saving 1% more is not specific. many people actually do not have a retirement plan, which means that they don't have an idea of how many percentage they should save, and therefore this 1% more does not make sense for them.

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  4. For me, this pledge is non-committal and reminiscent of "I pledge to not text and drive" and similar online campaigns. That being said, we know that if people commit to something - particularly in writing and publicly - they are more likely to follow through with their word. In this regard, it is an interesting approach.

    I'm not sure how they're reaching their prospective target, however. What is the incentive (besides a retirement fund, of course)? Is that necessary for this generation? Truthfully I am not in touch with this demographic or business so I cannot speak to how effective it may or may not be.

    -Gabi Wuhl

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  5. I think Prudential's campaign to encourage people to save up and commit to 1% is a very interesting approach and effective – at least for me this tactic will encourage me to save more. We all know social proof from our discussions in class specially for Millennials works. Hard numbers are very effective – they have a calculator where when you plug in the numbers (percent of contribution, salary, and the years until retirement) it will calculate for you approximately how much your retirement savings will increase. Seeing it in print makes it more realistic and convincing.

    Also as we learned from Cialdini’s 6 Principle of Influence that if you get people to commit even verbally there’s a better chance that they will follow through. And Prudential did one-up by getting people’s names and email address – great marketing scheme!

    Girlie E. Gaviola

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  6. This ad is clearly using social proof as well as some scarcity tactics to persuade people to save. The website was nice but nothing special in particular stood out. I think its a good marketing tactic to get the people's names and email address and offer the option to show your name.
    This ad does not persuade me personally to save.

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  7. The website seems to be using social proof through scarcity and authority. The approach seems motivating and comes from a good place but I do not find the need to pledge to a website who takes my name and email address to be a part of a community or group of people who want to save more than what they've saved before. I look at my own finances and spending habits and think about the lifestyle that I want when I retire and gathering all that information and more is motivating enough to spend wisely and save frequently. To me, this ad is not as effective as it could serve to someone else.

    -Sweta P.

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  8. While reading this I thought back to the smoking advertisement we had analyzed in class. When discussing that article we explored how instilling fear in consumers can be a powerful persuasion tool.
    I believe that what Prudential is doing can be compared to the fear being used in smoking advertisements. They are informing consumers of a fear that could become reality if they do not draw a pledge.

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