Driving securityholder self-service Understanding securityholder attitudes and preferences

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1 Thinking differently Sharing Innovation Client bulletin October 2006 Driving securityholder self-service Understanding securityholder attitudes and preferences

2 Background the drive towards self-service Background the drive towards self-service Self-service has become a favoured strategy for many customer-driven industries, due to a combination of cost-saving imperatives and the increasingly advanced capabilities that technology offers. Similarly, in recent years within the securities industry, issuers have sought to increase selfservice levels among their securityholders, but have regularly been thwarted by a number of perennial and often frustrating barriers. One of the major barriers is the lack of regular contact. Analysis has found that the average securityholder only contacts Computershare less than once per year, meaning attempts to change behaviour will often take time to bear fruit, if at all. Another challenge is the lack of incentive or perceived benefit to securityholders to opt for self-service channels. A further barrier to encouraging behavioural change is the clear indication by securityholders that they prefer not to be bombarded with information from the companies in which they invest, and in many cases only want to be contacted directly by the company if there is a problem or issue. While the securities industry is unique, with securityholder communication a statutory obligation, we can certainly learn from organisations in other industries that have overcome similar barriers to drive their customers towards lower cost self-service channels and provide a choice of communication mediums. For example, the banking/financial services and utilities sectors have had considerable success in this area through the use of disincentives such as branch closures, additional charges for physical statements, cheques or transaction histories, and long call centre queues. Just as importantly, organisations in these sectors have provided a feature-rich and satisfying experience for the customer when using self-service channels increasing the likelihood of repeated use. A joint focus is the key In recent times, Computershare has focused on sourcing local and global initiatives that will advance our self-service strategy and help drive the more efficient and effective interaction between issuers and their securityholders. A key element of our approach has been our significant investment in updating the features and security of Investor Centre our online selfservice tool for investors to make it more userfriendly and beneficial. However, it is only through a combined commitment from both Computershare and issuers that we can effectively promote awareness and encourage the repeated use of self-service channels by securityholders. Investor Centre currently receives almost 2.5 million queries from securityholders, brokers, accountants, etc. per year on single holdings alone, while the members portfolio section enables 180,000 individual securityholders to manage their shareholding portfolios. This represents a significant opportunity to build on this successful base and further increase these numbers. This can deliver a number of benefits, including: > reduced fulfilment and administrative costs > more efficient and effective handling of simple and repetitive securityholder queries and transactions > more accurate, secure and up-to-date data, and > empowering securityholders and increasing satisfaction and loyalty. Strategic alignment There are a number of avenues by which you can influence the behaviour of your securityholders; however the key point to consider is that your company s self-service strategy should closely align to your overall investor relations strategy. This removes confusion over whether you intend to: > build securityholder satisfaction and loyalty by providing a choice of communication channels to your securityholder segments, or > implement a strategic cost-saving initiative, through which all your securityholders are driven towards lower cost channels. For issuers with a retail customer base, the alignment of your self-service strategy presents an opportunity to exploit the value of this largely untapped demographic segment. 2

3 Understanding securityholder attitudes and preferences Understanding securityholder attitudes and preferences In early 2006, Computershare commissioned independent researcher Celsius Open Mind to survey 450 securityholders over a six week period with respect to Computershare s selfservice capabilities, which were defined as its web site and interactive voice response (IVR) system (via its call centre). The principal objectives of this research were to identify current self-service levels and understand securityholders attitudes and preferences in terms of: > awareness of self-service options > reasons for not using self-service options, and > intention to use self-service options. with 75% of all respondents claiming they had not used Investor Centre. This conclusion is supported by the relatively low number of current Investor Centre members (21%). ii. Positive future intentions Encouragingly, 48% of respondents admitted they are likely to use Investor Centre in the future. While it s unclear if this is as a result of being made aware of the site during the survey, it does suggest that an appropriate promotional campaign can elicit reasonable evaluation visits to the site just by making securityholders more aware. The key then is to clearly demonstrate the benefits through usability and the provision of adequate features and useful information. Reasons for not using Investor Centre 32% iii. There will always be securityholder segments that will not self-serve The findings strongly suggest that usage levels are associated with both age and internet access. Those under 60 years old are more than twice as likely to have used the site, while those over the age of 60 are less likely to have access to the internet and are more likely to be afraid of or dislike technology. Overall, 37% of respondents either did not have computer access or disliked computers/technology/the internet, which is generally consistent with the community household average. These findings will be used to inform future influence campaigns designed to encourage securityholders to become more self-sufficient. a. Key findings web The key findings from the research relating to the Computershare web site and Investor Centre are discussed below. i. Awareness does not equate to usage 20% 19% 18% 8% Prefer to talk to a person See no need No internet access Dislike/not confident with computers Inconvenient (prefer phone) Other Seventy four per cent of surveyed securityholders are aware of a Computershare web site that provides self-service functionality; however awareness does not appear to drive usage, 3%

4 Understanding securityholder attitudes and preferences iv. Lack of awareness and understanding are the major barriers Securityholders reasons for not using Investor Centre (see previous page) provide perhaps the most important and actionable findings from the survey results. The key opportunity lies with the 32% of securityholders who believe they have no need for Investor Centre. This strongly suggests a lack of awareness of Investor Centre s functionality and how it can benefit them. This could also be the case with the 28% of respondents who voiced a preference for a personal/telephone conversation, although this could also relate to the nature of their queries. b. Key findings IVR i. Low awareness, low usage Interestingly, the awareness and perceived benefit of IVR s self-service features among those surveyed was considerably lower than that of Investor Centre, with 37% of those surveyed indicating an awareness of IVR s self-service functionality. Less than half of that number has actually used the self-service features, which is somewhat surprising if we consider the call centre is the first point of contact for the majority of securityholders. ii. Positive user experience and future intentions Pleasingly, 37% of all surveyed securityholders say they are likely to use IVR s self-service features in the future, with a higher result among those under 40 years old, as may be expected. Over half of respondents who have used the IVR s self-service capabilities are likely to use it again, suggesting they were satisfied with the experience and results. In addition, it appears those securityholders without internet access are content to self-serve within IVR. Among current non-users, 35% indicate they are likely to use IVR s self-service functionality in the future. iii. Lack of awareness and understanding are the major barriers Once again, the most significant opportunity involves the 62% of respondents who responded no need in relation to using the self-service features within IVR. This suggests overwhelmingly that awareness of functionality and understanding of its benefits are major barriers to increasing IVR self-service. iv. There will always be securityholder segments that will not self-serve Nineteen per cent of those surveyed have a preference to talk to a person, which may indicate that: > they dislike the more impersonal automated medium > they prefer a knowledgeable call centre operator to help solve their enquiry, or > they have complex enquiries that cannot easily be resolved within the IVR system. c. Summary of key findings The key findings suggest the barriers to increasing self-service across both Investor Centre and IVR include: > a lack of significant general awareness > a lack of awareness of features > a lack of understanding of the clear benefits from using self service channels > a lack of incentive/motivation to change their behaviour. Importantly, we have also identified distinct groups that are unlikely to ever self-serve. awareness of functionality and understanding of its benefits are major barriers to increasing IVR self-service. 4

5 What are the next steps? What are the next steps? Investor Centre - current state The findings of the securityholder survey largely reinforced our existing understanding of the barriers facing issuers wanting to increase selfservice among their securityholders. Interestingly, these barriers also reflect the challenges faced by the banks in the 1980s and 1990s. Investor Centre (portfolio view) Non member access (single holding enquiries) etree At the core of Computershare s existing securityholder self-service strategy are the following areas we are targeting to help overcome these barriers: Transactions and enquiries Enquiries only a. Improving the user experience navigation, presentation, language, expanding the range of features b. Raising awareness, reinforcing the benefits and rewarding positive behaviour Computershare is already well-advanced in its plans to increase self-service in each of these areas, through the following activities: > Investor Centre will become the overall general description for all of Computershare s securityholder self-service capabilities, providing different securityholder segments with a choice of self-service channels > actively improving its range of functionality and services across its web and IVR systems, and > providing securityholders with a broad range of interactive options by making the most appropriate and commonly requested information available through self-service channels. Online PURL* campaigns Investor Centre months Portfolio Investor Centre Single holding Enquiries and transactions IVR *Personalised URL - each user ID is encompassed in a unique web link, without compromising security etree 5

6 What are the next steps? a. Improving the user experience To enhance the user experience, Computershare has in recent times refined its self-service strategy to focus on improving the navigation, features, presentation and response of those queries and transactions most appropriate to its self-service channels. It s important to realise that if the user experience (i.e. easier to use, more convenient, cheaper and faster) of these self-service channels falls short of expectations, securityholders will be more likely to continue to use higher cost channels such as phone, mail and fax. As an example, several initiatives are already underway, aimed at improving the simplicity, appeal and usability of the options within Investor Centre. These include: > General transactions > providing the ability to update payment instructions via IVR (available Q1 2007), and > providing the ability to make basic dividend reinvestment plan elections on-line (available Q1 2007) > ecommunications > simplifying the process for selecting electronic securityholder communications > integrating etree registration > providing the ability to select all holdings in a portfolio for updating via a single ecommunications transaction, and > creating enhanced broadcasts that contain multi-part (HTML or text) contents, which can be company-branded and personalised. The improvements to Computershare s selfservice functionality over the next 6-12 months are best illustrated by the diagram on the following page. b. Raising awareness, reinforcing benefits, rewarding positive behaviour Over the next 18 months Computershare will launch a number of initiatives designed to overcome the barriers identified and confirmed by the research, by raising awareness, influencing behaviour and increasing the number of securityholders converting from high-cost channels to lower cost channels. We expect our clients to play a central role in meeting this objective by partnering with us to communicate the right messages in specific campaigns, which encourage, reinforce and reward behavioural change with the ultimate goal of making self-service channels the preferred choice for a significant number of investors when they contact Computershare. The activities we recommend to achieve these objectives include: i. Raising awareness and reinforcing benefits > refer to the availability of self-service options on every piece of securityholder communication > undertake demographic analysis of your share register and determine the cost of targeting segments with specific messages (web vs. IVR) NB. For some companies it may be more costefficient to send a generic communication to all securityholders, albeit it is a less effective method of achieving the desired results. > conduct a targeted promotional/awareness/ influence campaign to detail the benefits of Investor Centre to securityholders; e.g. promote IVR to those securityholders without internet access or who dislike computers, and > conduct either a targeted or a mass campaign to highlight the appropriate channels for different investor groups; e.g. utilisation of messages in call queues or on forms and letters. We expect our clients to play a central role in meeting this objective by partnering with us to communicate the right messages in specific campaigns, which encourage, reinforce and reward behavioural change 6

7 What are the next steps? ii. Reward positive behaviour > provide incentives to strengthen your promotional/awareness/influence campaigns incentives could be related to your company s products and services (e.g. a share portfolio from a wealth management company) or could be a generally desirable product (e.g. LCD television). > alternatively, disincentives or barriers to hard copy communications can be provided; e.g. removing BREs from mailpacks. NB. It s important to remember the appropriateness of channel for securityholder queries is the key to a successful awareness or influence campaign. For example, more complex queries will generally always require operator assistance. The focus should be on more generic, high-volume transactions and queries that are better suited to self-service channels. For example: > Queries share price and holding balance > Transactions payment instructions, TFN, shareholder communications. A joint commitment is the key to achieving increased levels of securityholder selfservice. Summary Ultimately, your company s self-service strategy must be consistent with your IR strategy (and potentially your retail customer strategy), to eliminate any potential confusion among your securityholders. Irrespective of whether these strategies are designed to provide your securityholders with choice, or whether they are intended primarily to act as a major strategic cost-saving opportunity, the key elements to remember for encouraging behavioural change among your securityholders and increasing selfservice are: > improving the user experience > awareness > reinforcement, and > reward. A joint commitment is the key to achieving increased levels of securityholder self-service. Accordingly, we regularly engage our clients in discussion on this topic to seek additional insights and perspectives. We will continue this approach with the objective of driving efficiencies, process improvements and securityholder satisfaction and loyalty across the securities industry. Contact your relationship manager to discuss a self-service strategy for your securityholders. 7