TIAA had engaged in a remarkable transformation. The non-profit organization had been founded in 1918 to provide first-rate financial services to people who worked in other nonprofit organizations, especially higher education – a segment neglected by other financial service firms. By the last half of the twentieth century, the firm had established a virtual monopoly on these retirement accounts, and marketing was an afterthought. However, starting in the early 2000s, well-known companies like Fidelity and Vanguard began signing up academic institutions and offering services to their employees.
To survive, TIAA's leadership believed the organization had to update its approach and focus on its customer base. The firm's product offerings had always been narrow, reflecting a rather paternalistic belief that TIAA's few products were all that customers required to secure their financial future. Responding to the competitive threat, TIAA expanded its range of offerings through internal product innovation and the purchase of other financial firms.
In addition, TIAA embarked on an ambitious effort to increase its visibility. For a long time, TIAA remained behind the scenes, believing that its long track record of prudent investing was all the calling card the firm required. However, starting in 2006, TIAA, for the first time, created advertising campaigns that highlighted the firm's products and commitments. Customer awareness of TIAA increased.
These efforts allowed TIAA to maintain its foothold in the nonprofit world and even expand the types of organizations that it served. Nonetheless, the firm realized that it had to continue to refresh its message to its customer base to prosper. Compared to its competitors, TIAA was still relatively unknown and there were opportunities to increase the firm's outreach.
In 2021, TIAA looked to attract and help all of the potential customers at the nonprofit institutions it served. The employee base in nonprofit organizations was diverse and extended beyond well-heeled professors and physicians. Women, underrepresented minorities, and younger employees at these organizations had typically not been big customers of TIAA. Other retirement firms, even big-name companies, had found it difficult to get individuals from these groups to save and invest in accomplishing future goals. Could TIAA do better?
This question faced Thasunda Brown Duckett as she took over as CEO of TIAA in 2021. TIAA had an enviable record for diversity in its own ranks - could the organization leverage its understanding to attract more engagement from these groups that had historically been unresponsive to appeals from financial service firms? How could TIAA tailor its products to appeal to these groups? What message and which channels would be most effective in driving participation?
Citation: Jean Rosenthal, Jaan Elias, and K. Sudhir, "TIAA 2021: Reaching Out to Underrepresented Minorities, Younger Workers, and Women" Yale SOM Case 21-015, November 4, 2021.