Member Onboarding – Our Thoughts a Year Ago 

Throughout November IQ Group is going to take a look at some of the issues we identified in 2015, and felt were important enough to comment on. In this week’s blog we take a look at the issue of member onboarding. In a year which saw checking super fund balances come to the iPhone have we seen a new approach to staying in front of members?

Here’s what Ron Mullins, Director – Business Development Network had to say.

Onboarding – the key to new member retention

Originally the term ‘onboarding’ described the process of helping new employees gain the necessary skills and behaviours to become effective in their new organisation. It now also resonates with superannuation funds as a process of familiarisation to members – through various channels such as print media, and technological and personal interactions. Where ever it is practised, onboarding shares retention as a key goal.

But retention in the fund arena isn’t being achieved at any convincing level. This is because primarily the onboarding process is not delivering an optimal member experience. It tends to be convoluted and often subject to fund definitions and requirements that even the fund has trouble interpreting. The process is generally manual, intermittent and so distant from the initial customer contact that it carries little meaning for the potential member.

The problem is that ‘onboarding’ is being used in place of ‘new member’ processes. It continues to be used for merely setting up an account, sending out a welcome pack and the annual statement, and with perhaps some online facility. Onboarding fails to build the necessary engagement essential for commitment. It is aggravating the indifference that members may have towards superannuation funds. The bottom line is poor member retention rates, lower levels of commitment and limited account consolidation.

Let’s look at a fund example where 12,500 new accounts are created each month. A percentage of those will be cancelled due to any number of factors: contributions never being received; the account being set up in error by an employer; account duplicated due to poor data; or a member choice.

If that cancellation rate is 13 percent – in addition to not engaging members or gaining their long term commitment, the simple economics of this situation is costing the fund hundreds of thousands of dollars each year. Using conservative estimates, the annual cost of chasing up these errors will exceed $1m. If you can achieve a 20 percent reduction in the error factor alone, you have the capacity to save $200k per annum. How do you do this? The answer is: improved employers processes, data validations and member identity checking.

Typically, employee onboarding continues until the new recruit has gained the necessary skills and behaviours and becomes effective. They then transition into the standard performance management. To be effective in a superannuation environment, onboarding cannot be a one off, set and forget activity. It must become a service culture that underpins the entire membership lifecycle. Onboarding must be designed from the members’ perspective – to ensure they are provided with the skills, knowledge and behaviours to be effective in retirement. The three critical elements of engagement, interaction and trust must be present for ongoing commitment and retention.

There is a hierarchy for these elements. Engagement accumulates from the initial experience. Trust and commitment develop with the ongoing experience – from interactions that are regular and meaningful. Members will then be able to confidently consolidate – recognising, of course, that factors such as fund benefits and features will also play a significant role in member motivation.

A member may still commit and decide to consolidate, but without engagement and/or trust, retention is unlikely.

Engagement, commitment and trust – all elements of customer retention – are a fine balancing act for funds to achieve.


Ron Mullins

Director – Business Development Network