I understand platform rebates. It’s the price of Shreddies that baffles me.

OK, it’s taken me a while to get my head around the far-from-simple subject of platform rebates, and without the expert guidance of the fragrant Holly Mackay it would have taken a much longer while.  Still, I think I now more or less understand the movements of all those basis points, and how everyone in what I’ve learned to call the Value Chain ends up making a few bob.

Not so, I have to say, with Shreddies – or, indeed with all the other groceries offered by leading supermarkets at deep, deep discounts. (As it happens, I noticed Shreddies on a half-price promotion at Sainsbury’s at the weekend.)

It’s a long time now since I worked in food retail advertising, and if I ever knew how this sort of promotion works I’ve long since forgotten. I don’t think it can simply be a good old-fashioned pile-it-high-sell-it-cheap volume-vs-margin trade-off, where manufacturers sell so many more units that they’re better off at the end of the day despite the tiny margin: I don’t think that can work when you’ve reduced the price by as much as half. But equally, I don’t think it works as a conventional loss-leader, even if only for the obvious reason that no-one’s promoting it as a reason to visit the store.

If I had to guess (which I suppose I do), I’d say that it’s a somewhat more grown-up and sophisticated kind of loss leader. I’d guess that to maintain customer loyalty, Sainsbury’s needs to be seen to be offering big savings on customers’ journeys round the store. And to do so, it leans on big suppliers who need the distribution (Shreddies, for example, are a Nestle brand, aren’t they?), saying that it’ll be generally nice and helpful to them across their range if they’ll do a silly price on at least one of their lines for a couple of weeks in February. To add to the overall effect, Sainsbury’s may throw some of their retail margin into the pot too, to get the price down even lower.

It’s still not easy to see how anyone makes money out of this. If selling Shreddies at half price is actually loss-making for Nestle, then even if the volumes are huge it’s not doing them any favours (and, what’s more, we can safely assume that sales of other, full-priced Nestle breakfast cereals, especially Shreddies variants, will fall during the promotion). And even if Sainsbury’s are still making a margin, it must almost certainly be less than they make on full-price cereals, and I’d be surprised if, overall, total sales of cereals rise during the promotion: I’m pretty sure that most shoppers, like me, see the half-price offer as a straightforward substitution, buying Shreddies when otherwise we’d have spent twice as much on Crunchy Nut Cornflakes.

In the longer run, though, I suppose maybe Sainsbury’s need positive consumer price perceptions, or else they’ll lose market share to Tesco. And if promotions like this contribute to that bigger picture, then maybe they’re worthwhile.

Enough of these ill-informed speculations. I’d be grateful if anyone can explain it all to me. And meanwhile, let’s take a little comfort from the fact that financial services is by no means the only consumer market where pricing strategies are oblique, and opaque, in large and equal measure.

Hero No.2 makes an appearance

Glenn Hoddle, of course, is No.1.  No.2 is Neil Innes.  And if the name doesn’t mean much, listen to either of his Beatles parody albums, All You Need Is Cash or Archaeology. You’ll find both here, at very reasonable prices:  http://www.amazon.co.uk/s/ref=nb_sb_noss?url=search-alias%3Dpopular&field-keywords=neil+innes&x=0&y=0.

If you feel anything for the Beatles, you’ll love them.  In fact, you’ll more than love them. You’ll be astounded to discover that much of the time, they’re better than the Beatles.  About half the tracks on All You Need Is Cash, and a quarter on Archaeology, are songs the Beatles would have loved to have written.  During most of your listening time you’ll be chortling with pleasure; the rest you’ll be thinking:  Why isn’t this guy more famous?

I said last time that I think you need to tick three boxes to achieve superstardom. I’ve no reason to think that Innes doesn’t tick Matthew Syed’s bucketloads-of-practice box (and listening to the sophistication and quality of the playing and arranging I’ve every reason to think he does).  That’s one.  

The second is talent.  As I said in the last piece, I remain convinced (despite all Matthew Syed’s efforts to change my mind) that some people have an exceptional gift or talent that lifts them from the level that we can all reach with practice to a level that most of us never can and never will.  With Innes, as with Lennon and McCartney, it’s writing tunes:  that’s two.

So what’s the third piece, the missing one that prevents a hugely talented and hard-working musician like Innes from having a shoot-the-lights-out career?

I think the big clue is in the fact that by far his greatest work consists of parodies. Innes can put huge thought, effort and seriousness into making music that imitates other people.  He can’t commit anything like as completely to being himself. 

Speaking for myself, it’s that weakness that explains why I love him so much.  Innes is a perfect example of one of the rarest kinds of people, a self-deprecating genius.  For that, I’d rank him right up at the top of my personal list of heroes.

But that’s a minority view.  Most would agree that the very highest achievers have a particular kind of self-belief – a kind which takes it for granted that what they create, say and do matters, that they deserve a place in the brightest centre-stage spotlight.

This absolutely isn’t to say that they are all-round self-confident and self-assured individuals.  Many will be horribly unstable and insecure.  But most of the time (except when comatose or close to it) even someone as unhappy and inadequate as Judy Garland believed – no, knew – she was a star.

Innes doesn’t believe that about himself.  He doesn’t really believe that what he has to say in his own voice really matters. He’s much happier and more confident imitating the voices of Lennon and McCartney than he is using his own.  (In his own voice, I think I’m right in saying that the only hit he ever had was the Bonzo Dog-era Urban Spaceman, a strange novelty record gently attacking yuppie culture a decade before yuppie culture existed.)

Where does this third dimension – this particular species of self-belief – come from?  The first dimension – skill, knowledge and technique – comes from practice.  The second – exceptional gifts and talents – are innate.  I wonder if perhaps real star-quality self-belief comes from some interaction between the two.  

Of course life experiences can build – or destroy – self confidence.  In sport, Syed powerfully makes the point that the right kind of coaching and support will have a hugely positive effect on mindset, while the wrong kind will destroy promise and potential.  But, again, at the very highest level I think there’s more to it than that.  People who create the very greatest work – the Shakespeares, Lennons and McCartneys, Picassos – aren’t just confident.  They’re beyond confident.  They have an implicit belief that they can tackle the very greatest, biggest themes that exist in our hearts and minds, and find something worthwhile and important to say about them.  (Yes, yes, I know, they can also write Maxwell’s Silver Hammer.)

Most of us just don’t believe that.  On financial services marketing and branding, sure, I’ll back my opinions against anyone’s.  But on the big stuff – meaning of life, is there a god, will you still need me will you still feed me when I’m 64 – I’m happy to leave it to others.

Of course we’re still in necessary-but-not-sufficient territory.  This sense of self-importance, when not matched with talent and skill, leads to comical pomposity.  (Think poems of William McGonagall, Uriah Heep lyrics, films of Edward D Wood and many others.)

But on the very, very rare occasions when someone has huge quantities of all three – natural talent, acquired skill and part-natural, part-acquired self-belief – then you have Bruce Springsteen or Jane Austen or Sachin Tendulkar or Orson Welles or, well, choose your own genius.

This 3-dimensional model is quite useful, because while pretty much any full-on genius is going to score a 10 in all three dimensions you can use it to consider what it is that not-quite-geniuses are lacking.  J.K. Rowling, for example, may well have the talent and the self-belief, but she just doesn’t have the skill – the woman simply cannot bolt words together.  Tim Henman had the skill and maybe the talent, but not the self-belief – he never really, truly, properly believed he was going to win a Grand Slam.  Any number of TV presenters and personalities – for some reason Alan Titchmarsh comes to mind – have developed good skills and plenty of self-belief, but just don’t really have any special talent.

Of course all of these people have done well – in fact, very well.  It’s only when judged by the very highest standards that they fall short.

And of course, by those same standards, most of us register pretty much flat-line scores on all three dimensions and fall so far short that we land before the starting line.

But no matter.  While we’re writing our talentless, skill-free, conviction-lite blogs, we’re free to imagine we’re any superstar we want to be.

Ping pong, chess, Mozart – we’re well off-piste today

When it comes to developing skills and abilities, I’m very much of the nurture-not-nature school.  I believe that anyone can get good at anything if they practise enough.

As a result, I’m enjoying Bounce, the book written by ping-pong-champion-turned-sports-journalist Matthew Syed, which argues exactly this. Syed works hard to demolish any flicker of doubt that it’s hard work, and hard work alone, that leads to supreme achievement – digging, for example, into the lives of various well-known child prodigies like Mozart to prove that actually, so far from writing a great symphony the first time he sat down at the piano aged 6, his dad had him practising 8 hours a day from age 2, and anyway everything he composed before age 21 was derivative rubbish.

Unexpectedly, though, the very vehemence of Syed’s argument makes me first challenge and then reject it, with the expression “necessary but not sufficient” at the top of my pushbacks (the word we use for “disagreements” in financial services marketing).

Syed starts with geniuses – Tiger Woods, Garry Kasparov, Mozart, dozens of others – and then works backwards to prove just how hard, and how purposefully, they worked from a young age. They all did. Point apparently proven.

But look at it the other way round – starting, for example, with a scene that Syed himself includes in the book, the hundreds of 8-year-old girls out on court for hours on end practising their forehands at Nick Bolletieri’s Florida tennis academy. They’re all putting in the hours. But, plainly, out of a hundred, one may get to be a great champion, three may have good-to-excellent careers and 96 will be very good players but won’t ever get anywhere in tennis.

The same applies to 96 out of a hundred (actually much more like 99 out of a hundred) of those furiously clocking up their 10,000 hours of work in any of the other fields that Syed considers. 99 out of a hundred hard-working bands don’t become the Beatles. 99 out of a hundred chess fanatics don’t become Garry Kasparov. 99 out of a hundred ….. you get the idea.

As I say, “necessary but not sufficient.” Don’t get me wrong: I’m not saying you can hit the heights without the practice. You need great technique to express whatever it is you want to express. And I’d go further with Syed: I’d agree with him that practice doesn’t just develop technique, it helps you to find you own unique style, or voice, or whatever your particular kind of greatness may be in your chosen field.

But the more I think about what practice can give you, the more I also realise what it can’t. It can’t give you Paul McCartney’s gift for a melody. Or Roger Federer’s cross-court drop shot. Or Picasso’s way of creating a whole person out of one single line.

These things, I think, come from somewhere else. Actually, I reckon, from two somewhere-elses. And without wanting to keep my loyal reader in a state of tiresome anticipation, I think I’ll leave it till next time to say what I think they are.

Excellent, still just a tiny bit of an outlaw then

I was surprised and delighted to be turned down for membership of a forum/discussion group/community thing specialising in the wild and wacky world of pensions yesterday. Within moments of submitting my registration form, I received an email saying that “As a marketing and communications consultant, I’m afraid we cannot give you access to the site.”

I couldn’t help briefly thinking that if the group in question regularly includes such confusing floating adjectival phrases in its emails then a communications consultant might be quite a useful addition to its membership (as written, the sentence above obviously means that it’s the writer of the email who’s the marketing and communications consultant, when in fact it’s me).

But I quickly suppressed the thought, because I much preferred to react as a wild and dangerous outlaw than as a linguistic pedant. It’s been a long time since I’ve been turned down for membership of anything, and I’m hugely reassured to find that my social acceptability still has its limits.

Especially, I might say, since the group/community in question seems on the face of it to operate a straightforwardly open-door policy towards those connected in any way with pensions. On the home page of its website it says: “For Trustees, Corporate Sponsors, Consultants, Actuaries, Advisors, Pension Managers and Secretaries, and all Providers of Solutions to pension funds.”

Well, make that “almost all Providers of Solutions” (something very Dr Johnson about those initial caps). And “most but not all kinds of Advisor”.

My world used to be a good deal less respectable than it now is. With grimly (and lengthily) Gallic humour, the French adman Jacques Seguela called his autobiography something like “Don’t Tell My Mother I Work In Advertising, She Thinks I Play The Piano In A Whorehouse”: though obviously not in the least bit funny, the title does make a point. And all those years ago before I worked in this world, I did more or less play the piano in a whorehouse (well, the bass guitar in a working men’s club anyway) and was rejected for membership of things on more or less a weekly basis.

At the time this was irritating, but in hindsight it was great. As both Groucho Marx and Oscar Wilde almost said, there’s only one thing worse than not being accepted for membership of respectable bodies of one sort or another, and that’s…. well, you get my drift.

Anyway, now, many years later, thanks to these pension people, today there’s one fat bald middle-aged bloke who works in financial services who’s feeling a little bit Butch and/or Sundance, and a little bit Clyde as in “Bonnie and,” and a little bit Lemmy and No Sleep Till Hammersmith.

I think I may even put my feet up on my desk next.

Cheltenham Racecourse saboteur alert

Racecourse saboteurs are a creative bunch.  Their favoured methods range from rushing out under the horses’ hoofs to (allegedly) severing electrical cables beneath the parade ring.

Still, the current attack on Cheltenham uses what I think is a new approach:  advertising.  Somehow, the sabs have managed to a) get hold of the single image most likely to put people off going to Cheltenham, and then b) find a ton of money to run it in all sorts of different outdoor environments, around the London area at the least.cheltenham.JPG

I think (hope) I’ve inserted a thumbnail of the said image above.  If not, I should explain that it shows a ghastly florid-faced tombstone-toothed City boy, the kind you dread finding opposite you with his mates on the Paddington-to-Cheltenham train and then do your very best to avoid all day, wheeling away from the crowd in his horrible cheap suit and tacky tie in an ectsasy of excitement as his crappy 8-1 shot comes home.

There is nothing about this picture that any right thinking person will like. except possibly for the fact that it doesn’t seem to be raining.   Anyone who was thinking of going will look at it, and immediately realise how much they would rather be doing absolutely anything else, down to and including the removal of necessary body parts with rusty scissors. As an act of sabotage, it’s brilliant – not least in that it makes me determined not only to avoid Cheltenham this year, but to avoid it for the rest of all eternity.

I have heard a bizarre rumour that in fact the advertising isnt sabotage at all – it’s actually Cheltenham Racecourse’s agency best shot at finding an image that’ll attract people to come along. Ridiculous. Nobody ever born in the history of this planet – not even adpeople working on a horse-racing account – could be that stupid, could they?

Harry Potter and the Auto-Enrolled Pension

Not long ago, I went to an event organised by the soon-to-launch workplace pension provider NEST.  It sounded interesting:  the NEST people had invited an audience from all corners of the pensions industry to share their initial ideas on how they aimed to communicate the NEST proposition, and specifically on the language they should and shouldn’t use.

A good plan. Anyone who’s spent more than half an hour following this blog will know how important I think it is to develop some new, shared, meaningful concepts and language so that we can start making sense to broad consumer target groups. Using concepts and language originally developed to enable actuaries to talk to each other is never going to work, even if you do dumb it down a bit.

But what a disappointing event. For some inexplicable reason, the NEST people had walked straight into the one great big disabling bear trap that’s to be found in this landscape, making the one cardinal error that guarantees you’re not going to get within miles of anywhere you want to be.

It’s a bear trap that opens up in front of you right at the start of your journey, so that if you’re going to fall into it, you’ll do so before you’ve even finished the first sentence of your thought process. The falling-in process goes like this: “Because people aren’t at all engaged with the subject of pensions, we need to communicate with them in an extremely clear and simple way.”

Wrong. Completely wrong. Obviously, totally and disastrously wrong. I can distinctly hear an expression involving the words “non” and “sequitur” shouting loudly in my shell-like. What that sentence should say is this: “Because people aren’t at all engaged with the subject of pensions, we need to communicate with them in an extremely engaging way.”

It seems so obvious, I can’t believe it needs saying. How could anyone miss the point (and find the bear trap) so blindly? We have to make this stuff interesting to people. We have to make them want to pay attention to it. Being clear and simple is no bad thing, but it doesn’t address the fundamental requirement. Janet and John books are clear and simple, but I have no desire to read one. Catch-22 is quite a complicated book, but I’ve just started reading it for the fifth or sixth time, because it’s brilliant and shatteringly engaging.

Using examples from the world of books is tricky, because different people are engaged by different writers. Writing the NEST website in the style of Catch-22 isn’t going to work for everyone.

But fortunately there is a solution that is going to work for everyone, or bloody nearly everyone. How about we get JK Rowling to do it?

I’m not sure if I’m serious about this or not. Certainly it’s true that as of today, 20 times more people are engaged with the rules of quidditch than the rules of auto-engagement. And if I saw as many people reading NEST literature on the tube next year as I’ve seen reading Harry Potter books in recent years, that would feel like a considerable victory.

Realistically, though, I know it isn’t going to happen. And as a result, not much engagement is going to happen. And as a result of that, what is going to happen is that – well, as JK would put it, I fear that Voldemort and the Death Eaters will prevail.

Not even back 24 hours, and ranting already

At certain times of year, strange sights meet our eyes when we go outdoors.  In August (in Northern Ireland anyway) it’s marching bands, in April it’s bluebells, in early November it’s fireworks and bonfires, but in late February and March it’s ISA posters.

I guess most marching bands do their thing pretty well, bluebells are gorgeous and I love fireworks, but ISA posters are relentlessly dire. And none direr, I dare say, than Henderson’s current effort – a big stock shot of a Bruce Lee/Jackie Chan-style kickboxer flying through the air towards another Jackie Chan/Bruce Lee-style kickboxer, and a headline that says “A cautious fund that’s not afraid to make bold moves.”

How many kinds of useless is this?  Let me count the ways.

First, it’s useless in terms of targeting and communication.  What percentage of those seeing the poster will find it utterly incomprehensible?  90%?  95%?  98%?  How many people get any meaning at all out of the phrase “cautious fund”?  Or the idea of a fund making “bold moves”?  What on earth might these “moves” be?  The idea of a “cautious fund” making “bold moves” is so mystifying that it can’t even really be misunderstood – it just can’t be understood at all.

Then of course it’s useless in terms of proposition.  If you’re very clever, you may be able to explain how the ideas of being “cautious” and making “bold moves”  can both make sense at the same time.  In fact, Bill McQuaker, who runs the fund in question, is very clever and has a pretty good stab at giving just this explanation in the fund’s brochure.  But simplified down to a poster headline, it just sounds baffling and self-contradictory.  Like “A slow car that goes very fast.”  Or “cold weather that feels very hot.”  Nonsensical, I think, is the word.

And then finally there’s the creative uselessness.  In the pea-brained and stereotype-driven world of investment funds advertising, if the Bruce-and-Jackie visual tells us anything it tells us that this is some kind of Far East/Asia Pacific fund.  Except that of course it isn’t, it’s actually something called the Henderson Multi-Manager Income & Growth Fund (snappy name, guys). And the flying kick being executed by Bruce (or is it Jackie?) speaks of a dynamic, high-energy, exciting investment.  Except that of course it isn’t, it’s actually a cautious fund.  In both these respects, the picture is actually even more useless than the headline:  the headline’s just incomprehensible, while the picture is hugely misleading twice over.

Why I am wasting such time and effort on giving such a kicking to one lamentable ISA poster?  (It may well not even turn out to be the worst of this year’s crop – there’s still plenty of time for rivals to appear.)

It may just be because I’m a horrible and bad-tempered person.  Hmm.  Yes, that may indeed well be a big part of it.  But there’s a bigger reason.  Right across the industry, there’s a big consensus at the moment that organisations with investment propositions have a new opportunity, and equally a new need, to start delivering those propositions directly to consumers, instead of (or actually as well as) relying on intermediaries to act as their entry-point into consumers’ personal finances.

To me and others who’ve become sick and tired of engaging with the gatekeepers but never (or hardly ever) with the huge and alien tribe that lives beyond the gates, this is a fantastic and important and long-and-eagerly-awaited development.

But to those responsible for this dreadful poster, and many others like them, it’s a development that looks like it’s going to take them a million miles beyond their troublingly narrow comfort zones.

The bag’s block. I mean, the bog’s black. Whatever.

That’s enough not-blogging.  Almost exactly nine months off, as chance would have it, which provides an obvious metaphor for this renaissance which I think I’m going to resist.  It’s good to be back.  Now I just need to think of a way of telling both my loyal readers (neither of whom is on my LinkedIn or Facebook).  Anyway.  Watch out.  I have some good rants up my sleeve which should keep things pretty lively for a while yet.