Blog off

OK, that’s it till 2007 now.  Proper working day today, but extremely token effort tomorrow and then out of blogging range till 2 Jan.

Hope you’ve found something of interest in here.  More comments would be nice, if any occur to you.

The plane, the train and the blame game

Just back from Heathrow after a doomed attempt to fly up to Scotland this morning - moderately foggy, but definitely consomme rather than pea soup, and everything brought to pretty much a complete standstill. 

Probably the third time this year I’ve failed to get away to my destination at all, and of course I can’t count the number of seriously late arrivals and departures.  Coming back into Heathrow in the evening, have I ever been less than an hour late?  If so, I can’t remember when.

This year at least, my experiences with trains have been miles better.  I can only remember two seriously late ones, and almost all the rest have maintained standards of punctuality more often associated with pre-war Germany.

But the funny thing is, lateness still rubs off a dozen times more negatively on the train operators than it does on the airlines.  When it comes to lateness, trains are still objects of anger and ridicule, but planes – even though objectively far later – arouse a small fraction of the ire.

I think there’s a reason for this.  The airlines, I think, have been very successful over the years at creating the perception that their lateness isn’t their fault.    Mostly, it’s the fault of air traffic control.  To some extent, it’s the fault of God, especially as far as weather is concerned.  It might be the fault of some irritating plane from another airline which is sitting at the gate where we want to disembark, or of a baggage handling delay, or of a couple of half-cut passengers failing to hear the final call, or the catering company turning up late with the breakfasts, but one way or another, ninety nine times out of a hundred, it’s not the airline’s fault.  

In reality, the train operators are just as dependent on a whole range of suppliers and service providers, and the large majority of their delays are also the knock-on consequences of failings of one sort or another on their suppliers’ part.   (Network Rail, obviously, are by far and away top of the list, playing the same buggeration role on the ground that air traffic control plays in the air.)  Yet we choose not to notice any of this.  When the train is late, it is the train operator’s fault.

There’s obviously a historical reason for this – until quite recently the railways were an integrated business, and the organisation that ran the trains was the same as the one that ran the track and the signals.

But I think the other reason is that the airlines have always taken the opportunity to let us all know who’s responsible for what.  The BA captain, in that wonderfully confidence-inspiring and ever-so-slightly exasperated voice, comes through the speakers to tell us:  “Sorry to be the bearer of bad news, ladies and gentlemen, but we’ve been talking to Heathrow Air Traffic Control and they’re telling us that things are a little brisk down there on the ground this evening, so they’re putting us in a hold over Rickmansworth for what they say shouldn’t be more than about twenty minutes.  I’ll let you know when they tell us we can start our approach.”  How many times, in a short message like that, does the captain make it clear that the problem isn’t us, it’s them – and, at the same time, implying that he and the rest of the crew are just as frustrated as the rest of us that we’re going to miss all of Corrie and half of The Bill.

All this is only partially relevant to financial services, because back offices in financial services companies are directly responsible for stupendous numbers of delays and mistakes.  (It’s difficult to imagine anything much scarier than a role-reversal exercise involving Norwich Union back-office staff and British Airways flight crew.)

But still, it is partially relevant.  In financial services as in travel, when things go wrong most consumers really don’t have any intelligent understanding of who’s to blame for what, and as a result tend to assume that all the blame belongs to the organisation they’re dealing with.  This is quite often not the case.  The most obvious, and probably serious, examples are to do with investment performance.  Most consumers are incredibly much more confused and ignorant than we imagine about who is responsible for what.  Simply including a graph that shows that our fund has fallen by less than the average makes no difference.  If we want them to understand that actually, we’ve done pretty well, we’re going to have to learn a few tips from that BA captain.

A close second to the investment performance issue, consumers are almost equally unaware of the extent to which the industry’s most tiresome and infuriating bureaucracy and complication are in fact imposed upon it by the government and the FSA.    And beyond this, there are various relatively minor not-our-fault situations that includes things like ATMas not working because of telecoms failures, and insurance companies imposing endless delays on their customers because they can’t get essential information from third parties.

Please don’t imagine that I’m suggesting that companies should indulge in miserable whining about these uncontrollable circumstances.  For me, those BA flight crew are such a good role model precisely because they do communicate so calmly and unemotionally.  Passing the buck isn’t easy to do well, and if you do it badly it just compounds the problem. 

And anyway, for goodness’ sake, how on earth can a little bit of early-morning fog wreak such total havoc on a whole day’s flight schedules.  Good heavens, surely these people understand that a touch of fog isn’t exactly unheard of at this time of year.  They should be strung up, the whole lot of them.  That’s the only language they understand. 

Special Pleading #1: The “Grudge Purchase” Fallacy

One of the things I like least about the financial services industry is the way it tends to think that all its problems and issues are unique. 

Confusingly, a few of its problems and issues are unique.   And also, there probably are uniquely many of them.  Taken together, I doubt whether many other industries face a bigger collection of problems and issues.

But nevertheless, the fact remains that many of the problems and issues aren’t actually unique at all.

A point which I was pondering earlier when calling Kwik-Fit to make sure they have two front tyres in stock so I can get them fitted to my car at the weekend.

It’s been an expensive year for tyres  Don’t get me wrong, I’m not looking for sympathy:  the main reason why it’s been an expensive year is that I have too many cars.  Still, I think the two I was discussing with Kwik-Fit will be the ninth and tenth of the year.  And that adds up to an annual expediture on automotive rubberwear of somewhere between £1500 and £2000.

Without asking you to dive too deeply into my household finances, this expenditure on Pirellis and Yokohamas is only one of a number of contenders for my annual Most Begrudged Expenditure award.  The shortlist also includes:

-   getting the Volvo serviced and MoTd (£1600)

-   bringing the Toyota back from France, getting it serviced and MoTd and taking it back to France (£850)

-   mending the dishwasher (£120)

-   building a new garden fence in France (£500)

-   having the tree outside the front in Camden pruned (£250)

-   Congestion Charge fines and parking tickets (£550)

-   two tickets for Bruce Springsteen at Wembley Arena, which I had to throw away when the friends who were supposed to be using them cancelled at short notice and the touts at Wembley were stacked out and wouldn’t give me anything for them (£130)

-  having to buy three separate Norton Anti-Virus CDs, because these days Norton very cleverly prevent you from installing one CD on all the family’s computers (£90)

-   replacing the water-heating switch in France (£90)

-   fitting a crown to one of my left-side upper molars (£650)

I could go on, but writing this list is making me feel cross and miserable (not to mention poor) and in any case I’ve made my point.

Which is, just in case anyone is unclear, that an enormous part of all households’ incomes is spent on distress purchases – things entirely lacking in glamour, desirability or pleasure, but which have to be made simply and solely to avoid the wheels falling off.  Especially the tyres.

And yet despite this obvious and depressing reality, to hear some people in financial services talk you’d think that financial products like insurance and pensions are the only grudge purchases that people ever make, and that the marketing challenges of persuading people to part with the money for such unsatisfying returns are uniquely grim and daunting.

Nonsense.  Are people excited about buying tyres?  Not at all.  But are Michelin, Pirelli, Dunlop and Goodyear great brands?  Very much so.  Do people spring gladly and enthusiastically out of the house when faced with the need to spend £90 on anti-virus software?  They do not.  But are Norton, Symantec and others strong brands in this market?  They are.

The sheer weight of expenditure on grudge purchases gets even, well, heavier when you look at the contents of your supermarket trolley.  How thrilled are you to be buying Domestos?  Aquafresh?  Whiskas?  Persil?  Do these purchases really give you any positive satisfaction?  I very much doubt it.

So enough with the special pleading already and let’s get on with it, guys.  Sure, a lot of our products afre grudge purchases.  So are everyone else’s.  That’s how life is.  We can still do some great work and build some great brands.  If we can just stop the special pleading for long enough.

PS  I reckon it’s the Congestion Charge fines and parking tickets.  What’s your most begrudged purchase of the year?

Needless to say “needless to say”

Hmm.  Reading back over a few of these entries, I notice that I seem to be using the expression “needless to say” rather too often.  Needless to say, I’ll make sure I cut back on it for a while.

Incidentally, in a presentation this morning where several charts talked about “baseline” measures, I was struck by the similarity in appearance (although difference in pronunciation) between “baseline” and “Vaseline.” 

 

Santa Claus isn’t coming to this part of town

At a time when the festive packs of drinks and chocolate are out on supermarket shelves by mid-September, it’s become a bit of a cliche to say that Christmas is rather overdone in the commercial world.

But if there’s one corner of the commercial world where it’s still rather underdone, it’s the financial services industry.  You can look in most high street branches, pretty much all advertising, almost all direct marketing and the large majority of websites and you’ll find them amazingly free from reindeers, trees, Santas and even fake snow around the edges of the branch windows.

Of course many of the credit card marketers are still doing their best to encourage as much borrowing-fuelled present-purchasing as possible with panels on their websites featuring the odd snow-scattered APR graphic, but that’s about all.  Even the few providers who do actually have Christmas-related propositions – like the direct insurers who normally offer 10% uplifts in sums insured over the period to cover the value of presents, trees and extra bottles of sherry – don’t seem to be bothering to mention it.

Our natural instinct, being as hollied and reindeered out as we are, is to applaud the industry on its restraint.  But actually I don’t really think restraint is the issue.  The truth is that the industry, suffering from a sort of collective version of Asperger’s Syndrome, has always found it more or less impossible to relate to any kind of reality existing outside of itself.

There are a few rather odd exceptions to this rule.  The investment industry, for example, has been fascinated for some 15 years or so with something called the ISA Season (previously the PEP season) in the first quarter of the year, and the mortgage industry has always focused its marketing efforts on what it calls the home-buying season, in the second quarter of the year.

In fact, neither of these ideas stands up to much scrutiny.  ISA sales, for example, are only mildly skewed towards the first quarter, and in any case the IFAs responsible for virtually all the sales actually draw up their recommended lists in the fourth quarter of the previous year.

But even these flimsy examples of topicality are about as good as it gets.  Most of the time, financial advertising and marketing communications exist in a vacuum – even in the most extreme circumstances.  I remember, for example, that during the great stock market crash of 2000 – 2002, when the newspapers’ headlines were telling stories of panic and despair, the few remaining investment advertisers who hadn’t headed for the hills didn’t seem to have noticed that anything at all was amiss. Rather like passengers on the Titanic sipping their soup as the dining room floor became first a wall and then a ceiling, they carried on offering us opportunities to enjoy the benefits of long-term growth potential and balanced portfolios investing in diversified portfolios of global securities.

At a more everyday level, there’s extraordinarily little topical financial advertising, whether relating to newsworthy events or significant developments in the financial world (or indeed both: a week or two ago, surely at least one insurance advertiser ought to have been able to manage some sort of ad connecting to the great Kensal Rise Tornado?).

Heaven knows that financial communications need to take every available opportunity to connect with consumers and demonstrate their relevance to people’s lives, and this isolationism is undoubtedly an opportunity missed.

“People in glass houses,” you may say.  “Where are your agency’s topical campaigns?”  But my house isn’t so glassy today. This morning, a client reacted very positively when we presented a new press campaign which I hope will include a whole raft of topical ads over the course of 2007.  We might even prepare a standby subject in case of another tornado.  And, of course, another Christmas. 

 

Less Than Lucky

Looks like we’re moving into the endgame of our MORE TH>N experience.  I see trade press reports that after a life of a bit less than a year, the idea from the agency that won the business from us is being dropped. 

I’m pleased to hear this, because I thought the idea – and in particular the execution of the idea – was wrong, wrong, wrong.  As generic concepts about the role of insurance go, “Normal is great when you get it back” is an interesting intellectual proposition.  As a basis for intrusive, well-branded, memorable advertising in a cluttered and noisy sector, it was completely useless.

Worse, it was also completely unnecessary.  There was no problem at all with the way our advertising had been working – indeed, in the year that we lost the business, we had achieved all our year-end targets by August.  As far as consumers were concerned, Lucky the dog hadn’t come to the end of his shelf-life:  after three years or so, they’d just about noticed his existence.

I know, it all sounds like sour grapes.  But actually it isn’t.  I’ll never moan about the loss of the MORE TH>N business.  We lost it as a consequence of a wave of client personnel changes, at senior, middle and junior levels, which sounds unfair and frustrating – but the truth is, we’d won it in exactly the same way, benefiting from MORE TH>N’s recruitment of people who knew and wanted to work with us.  Live by the sword, die by the sword:  like most people businesses our successes depend largely on our personal relationships, and so do our failures.

No, the stupid thing wasn’t sacking us, it was killing Lucky.  (Actually a somewhat unfortunate choice of phrase, since in fact the real Lucky had sadly died a few months earlier.)  He’ll be back, of course, or at least a Lucky-looky-likey will be back, at some stage.  They always come back – the Black Horse, the red telephone, the Homepride flour graders (surely you remember the Homepride flour graders), the Michelin man, the Bisto kids and so on and so on.  The truth is, brand icons are hugely useful and hugely valuable things, and if you’re lucky (no pun intended) enough to have developed one, especially in an abstract and intangible market like financial services, it’s going to be awfully hard to find an advertising approach that works better for you.

“Normal is great when you get it back” was obviously about a thousand times worse, and should never have been given an airing.  Still, it’s not the end of the world.  The brand has only wasted a year and £20 million or so. It’s still perfectly possible to make up the lost ground – and easy to see how to do it.  Lucky will be great when they get him back, too. 

   

Leopards, spots and Saatchis

Did you see that Saatchi & Saatchi house ad in the Sunday Times yesterday?  (I would give you a link, but I can’t find it anywhere.)  It was supposed to be an update of the legendary launch ad that Maurice and Charles ran over thirty years ago, in the earliest days of the Saatchi era.  Allegedly, back in those days, they spend their last few thousand pounds on a single insertion in the Sunday Times – a full-page long-copy ad, as I remember, with a headline which said something like “Why We Think The World Is Ready For A New Kind Of Advertising.”

Thirty-odd years on this all sounds rather more like portentous tosh than great advertising, and I must say I have absolutely no idea how – or indeed whether – the brothers were able to substantiate the “new kind of advertising” claim.  Still, at the time it seemed like a big deal, and I think according to the official Saatchi story lots of new business flooded in as a result, and the rest is history.

Thirty-odd years is a long time in this business, and it’s very, very difficult to imagine yesterday’s ad having even 1% of the same effect.

For a start, in today’s media-saturated, hype-sodden age, it’s hard to imagine any one-off 38×6 having the same kind of agenda-setting effect.  I doubt if one person in a thousand even noticed the bloody thing. 

Also, in writing a self-indulgently long-copy ad, full of entirely unnecessary padding and an impenetrably obscure headline, the authors remind us how much the world has changed.  No-one’s going to read all that, guys. 

But the content is much more troubling than these stylistic foibles.  The thing is, it really isn’t hard to see the desperation showing through in every sentence.

I’m not suggesting that Saatchi is anything other than a highly successful and creative advertising agency.  But the trouble is, it’s nothing more than that.

What Saatchi & Saatchi does is to produce TV commercials, and, grudgingly, if it has to, posters and press ads.  What it doesn’t do is brand strategy, marketing strategy, business strategy or any other kind of strategy. What it also doesn’t do is product and service development consultancy, digital consultancy, data consultancy, or any one of a thousand other things going on these days in the marketing and communications village.

In other words, like most other big, mainstream advertising agencies, Saatchi has become marooned in a past era, obsessing over TV advertising campaigns just like it’s done for the last 30 years.

But over that period, TV advertising has moved from a place pretty close to the centre of most serious clients’ brand, marketing and communications activities to a place way out at the periphery.  It’s not that TV advertising got small:  it’s that everything else got big.  And although the Publicis Groupe, of which Saatchi & Saatchi is a part, understands this pretty well and has broadened its offering more successfully than most, silly old Saatchi & Saatchi is still stuck in its timewarp.

This is the reality that yesterday’s ad is meant to obscure – and that’s why it’s full of ridiculous nonsense about more-or-less-non-existent services called things like CultGeist@Saatchi (“part research, part social network and part blog”) and GUM@Saatchi (specialists, they’ll have you know, in something called Cultural Real Estate) designed to make you think they’re not just interested in TV advertising.

This all sounds very interesting, but I’d be interested to know what proportion of Saatchi’s staff, payroll and fee income is actually represented by CultGeist, GUM, Industry@Saatchi and the other gimmickalistically-branded services namechecked in the ad.  In my experience, persuading leopards to switch to multicoloured stripes or flat dayglo panels is a task of total straightforwardness compared to the task of trying to get big, long-established advertising agencies to get over their obsession with the 30-second television commercial.

if you think i’m being unkind, try googlesearching these groovy new brands that Saatchi are so excited about.  You won’t find a lot.  To say the least. 

To be honest, reading yesterday’s ad, I was depressed to think how far the mighty had fallen since its distant 1970s predecessor.  In those days, agencies seemed important and exciting places, and their ideas seemed current and real.  Now, old-style agencies seem like dinosaurs, and their ideas are so transparently thin and self-serving that they’re almost too sad to be irritating.

And I’m sorry to keep going on about this, but that headline.  “Probably the least known advertising agency in the world.”  I apologise, I’m sure it’s me, but I honestly don’t get it.  If you do, please let me know.

“The Invisible Brand” – a visible explanation

Hooray.  We made it.  The new edition of our all-too-occasional newsletter, The Invisible Brand, is back from the printers and ready for posting just in the nick of time.  Another couple of days, and the majority of the people on the mailing list would have descended too far into seasonal celebrations to be able to read it.

Every now and then we include a paragraph explaining why it’s called The Invisible Brand, and to be honest I meant to do so in this latest edition but I forgot.

So just in case you were wondering, the idea is that compared to consumer goods, financial services – and indeed other kinds of services too – are quite literally “invisible” brands, brands which don’t have a physical, tangible, visible consistency.

Some might argue – one or two have argued, in fact – that this isn’t entirely true, and that many of these brands do have all sorts of visible manifestations, from bank branches to pension statements: maybe even that their defining characteristic is their inconsistency rather than their invisibility, and that our newsletter should be called The Inconsistent Brand.

Well, yeah, thanks for that.  Great.  I’ll bear it in mind.

The Commodore 64 and today’s pensions market

I met Judy, my wife, through work, and years ago we often used to go to the same meetings and make presentations at the same events.  But our paths hadn’t crossed during the working day for many years, until I saw her presentation at a seminar a couple of days ago.

Needless to say, it was terrific.  (Although of course even if it hadn’t been terrific, I’d be saying it was terrific.  But actually, it really was terrific.  Although of course even if it hadn’t been really terrific, I’d be saying it really was absolutely terrific.  Although… Let’s move on.)

Anyway, as well as the terrficness, the subject of the presentation – some new consumer research about pensions commissioned by Malcolm Small’s excellent Pensions Network – was interesting and thought-provoking.

Inevitably, the research said that when it came to retirement planning, consumers were confused, disorganised, ill-prepared, deeply cynical and thoroughly miserable.

One group, though, was a little less doom-laden than the rest.  Those who said they had a close relationship with a financial adviser said they felt a good deal better organised and better prepared.  Having a financial adviser, Judy said, seemed to be the secret of effective retirement planning.

The more I thought about this, the less surprised I felt.

The fact is that for as long as anyone can remember, the pensions industry has been built around the pivotal role of the financial adviser.  Everything about the industry as it exists today – the fiscal climate, the regulatory regime, the product design, the sales process, the after-sales service – makes the adviser indispensible.  The poor old consumer is marooned in an open boat in a deep, wide and stormy sea, desperately hoping for a kindly adviser to take him or her in tow and head towards safety and shelter. To say that pension savers are dependent on advisers is a bit like saying airline passengers are dependent on pilots, or hospital patients are dependent on doctors. 

Once upon a time, it occurs to me, you could have said most of the same things about the IT industry.  Back in the days of mainframe computing, the manufacturers’ only target group was companies’ in-house IT professionals.  The whole industry was configured around these people.  The ultimate end-users were not professionals – they were just ordinary people with terminals on their desks – but they were powerless and helpless, marooned in an open boat in a deep, wide and stormy sea, etc etc.

After some years of this, the thinking changed.  The networked PC began to replace the mainframe, and home PCs became a possibility.  But for a long while, the manufacturers didn’t really understand how the world had changed. They dealt with ordinary consumers in much the same way that they’d dealt with IT professionals.  In particular, manufacturers of machines like the Commodore 64 and the Sinclair Spectrum expected consumers to learn how to write programs in languages called things like BASIC and COBOL in order to be able to do useful things like play games of noughts and crosses and create an onscreen calculator.

Most consumers were way out of their depth.  After a few failed attempts, in most households the Commodores and Spectrums joined that growing pile of unused electrical items dumped in the loft or the cellar, along with the toasted-sandwich maker and the slow cooker. 

For the PC manufacturers, refocusing away from the IT professional and onto the amateurish, irritating, hopelessly half-arsed consumer has been a long, slow haul.  Along the way, the development of Windows – as a user interface designed specifically for the amateur rather than the professional – was the most important milestone.  But even so, some 25 years on, you only have to look at the PC product advertising in the newspapers to realise that the gap between industry and consumer is still pretty wide.

But the gap between the pensions industry and ordinary consumers is twenty times wider.  It’s not just that no attempt to narrow it has yet been made:  hardly anyone has yet realised that starting to narrow it might be a good idea.

Building a consumer-friendly pensions industry from scratch wouldn’t be easy.  Building it out of the industry we have already is almost unimaginably difficult.  As transformational challenges go, it’s a bit like turning Sellafield into Alton Towers.  In the words of the famous Irish joke punchline, “If I were you, sorr, I most definitely wouldn’t start from here.”

And there’s another problem.  Even if you could create a theme park, so to speak, which consumers felt happy to visit, would they be willing to put in enough money?  The average size of consumers’ personal pension pots at retirement these days is often said to be something around £30,000.  I suspect this figure is apocryphal, but even if so it usefully highlights the problem:  whatever the actual figure, it’s nothing like enough.  There’s not much point in undertaking the Herculean task of re-engineering a totally, completely, delightfully consumer-friendly retirement planning industry if the consumer then happily and confidently engages with it in order to make contributions of about a tenner a month.

That’s why I’m one of what currently seems like a very small minority of people who believe that some sort of element of compulsion is the other missing piece of this very-incomplete jigsaw:  without it, all that’ll happen if we reinvent the industry is a white elephant like the Millennium Dome, big, expensive and impressive in its own way, but ignored and avoided by almost all its target market. 

Deep waters.  Sometimes I wish my job was to generate new enthusiasm for the slow-cooker and the toasted sandwich-maker.