Make the LV= Annual Pension Statement letter more readable to make sure customers make an informed decision about whether or not to re-allocate funds

Challenge

Annual Pension Statements require one thing of the recipient, and that is to understand what their money has done in the past year. And, as they have the option of changing their pension structure at any time – there is no guaranteed action that they have to take.

Research & insight

Pensions, finance and insurance are abstract in many dimensions, and this creates a unique set of challenges. They are in the future which is a foreign place, they are for the customer in the future which is a foreign person, and they involve risk and trade-off which itself is poorly understood in the modern world (risk is well understood living in a small tribe one hundred thousand years ago and we have farms, medicalised, and mechanised a way of living is that we no longer recognise in the modern world).

Customers have to first understand what they are reading, and secondly want to read it. This seems obvious – because it is. However, making a piece of communication both understandable and desirable is quite the task. The trick is to create a clear mental model, effortlessly. And this leans on two approaches.

The first is to establish a clear hierarchy with the layout so that people can understand that only the item but its relationship to the other items.

The second is to display information in a way that talks to the non-conscious processing which itself feels effortless. In short, one must alleviate the burden of critical thinking.

Solution

Designing and writing go hand-in-hand. They need to establish clear hierarchies with headings and bullet points and indents which themselves are pictures more than just text. They must use techniques such as because pivots, and present number information in a way that is sympathetic to both of those that have a lot of previous knowledge of those that don’t. This is somewhat understood in the canon of psychology. And is why we established a comprehension and motivation test specifically to check our work. This relies on the Cloze test (Taylor, W. L. (1953). “Cloze procedure: A new tool for measuring readability”. Journalism Quarterly. 30: 415–433.) and self-report effort and pleasure questions.

We wrote and redesigned the original letter with all the techniques we thought were appropriate. And run this version versus the original version through hundreds of respondents who were presented with one or other of the letters, given a fixed period of time to read it, and then presented with a set of approximately 10 questions testing their memory/comprehension, and questions relating to their self-reported feelings

The results, when each of the 18 questions was examined, suggest that:

  • a positive and simple perception of language had the greatest effect on comprehension
  • followed by structure and ease

Showing us that they did not have to exert more effort as the letter was easier to process and hence their answers were more accurate.

Results

4.4% increase in comprehension

28% increase in reading-ease and likability

Comprehension

  • 4% increase in comprehension of the LV= Annual Pension Statement letter (new 70.54% vs. original 67.45%)

Reading-ease and likability

  • 28% increase in reading-ease and likability (new 81% vs. 58%)

The results, when each of the 18 questions was examined, suggest that:

  • a positive and simple perception of language had the greatest effect on comprehension
  • followed by structure and ease