The curious incident of the dog and the auto-enrolled pension contributions

You remember the curious incident of the dog in the night-time?  Of course you do.  (“But Holmes, the dog did nothing in the night-time!”  “That, Watson, was the curious Incident!.”)

Well, we’re now just about three weeks away from the first hike in employers’ and employees’ contributions to auto-enrolled pensions, and the dog is doing nothing in the night-time again.  The silence about this imminently-forthcoming event is deafening – and this despite the fact that the increases are far from insignificant (employers’ minimum contributions doubling from 1% to 2%, and employees’ tripling from 1% to 3%).

No media coverage of the story is listed in the first two pages on Google, and indeed the first three listings all come from that legend of search engine optimisation The Pensions Regulator, which seems to be the only dog ready to go in for a bit of light barking.

I’m not big on conspiracy theories, believing that unexpected events (or absences of events) are usually better explained by cock-up than by conspiracy.  But I do wonder a little bit if some commentators may have been gently discouraged from commentating, on the grounds that if people don’t notice what’s happening to the pound in their pay-packet they’re less likely to start opting out.

With another round of similar contribution increases due in a year’s time, and with incomes still falling in real terms, I don’t really think this radio silence approach is tenable over the next couple of years.  I think we will see steadily-growing levels of opt-outs unless or until we can convince people that contributing really matters, and even in times like these it’s vitally important to take the hit on take-home pay.

And having made that point in favour of contribution increases, I’ll end this blog before I hear those Discouragers knocking on my Camden Town door.

At last, I think Tom Baigrie might have sold me on life assurance

Anyone who knows Tom – and a lot of people do – will agree that there is no more passionate advocate in the cause of life assurance.  He makes the case for it morning, noon and night, and at least once a week he makes it in his column in the trade paper Money Marketing.

To be honest, most of the time it’s water off a duck’s back as far as I’m concerned.  I have nothing at all against life assurance, but I’m not passionately in favour of it either.  On the one hand it doesn’t cost much, especially for those young families with children that Tom’s always going on about, but on the other hand that’s because most of them don’t die at an early age.

But Tom’s column in today’s Money Marketing has jolted my indifference.  In it, Tom has unveiled a New Statistic – to the effect that one in 29 children will lose a parent before reaching the age of majority – which, I’m pretty sure, is the age of 18.

I’m no statistician, but that strikes me as a lot.  Especially since, as I see it, the reality must be worse – if one in 29 loses a parent, then arguably since there are on average nearly two children per family, that must mean not too far short of two children out of 29 will lose a parent before reaching the age of majority.  That would be around one out of 15.  (Something tells me there’s something wrong with this analysis, but I can’t see what it is.)

Anyway, or either way, one out of 29 or one out of 15 is enough to worry quite seriously about.  I’ve been turning the figure over in my mind since I read it this morning, trying to find something wrong with it.  Could it be, for example, that the unlucky children in question are the ones with the incredibly much older and more decrepit dads going round the course for the second or even third time?   Or could it be that when the statistic refers to “losing” a parent, it just means “mislaying” – getting separated on a trip round Asda, say, and being reunited at the checkouts?  But my theories have been getting more and more fantastical.

It’s still not entirely clear to me that a wodge of cash is an acceptable substitute for a parent,  but I can see that it helps.  So, all in all, Tom’s new statistic tells me that actually, the case for life assurance is a good deal stronger than I had ever realised.

So all in all, I’m convinced –  or very nearly.  Just before I change an opinion of a good twenty years’ standing, I wouldn’t mind knowing where that statistic came from.

In hindsight, I preferred it when robo-advisers didn’t advertise

Probably the riff to which I’ve returned most often in this blog in recent years – my Smoke On The Water, my Voodoo Chile (Slight Return) – is the one that goes “None of these trendy new robo-advisers is ever going to acquire a worthwhile number of customers unless they start spending some worthwhile money on advertising.”

Several of them are now spending quite a bit of money on advertising, and I think I was happier when they weren’t.  The trouble is that the advertising is a) terrible, b) all the same, c) lacking in any kind of appealing call to action and d) based on an entirely false hypothesis.

It’s clear that there is now a default expanding-the-investment-market campaign concept, which involves pictures of kooky-looking people (men with ponytails, women with unnatural hair colours, men and women with tats and piercings) and headlines saying in one way or another that they’re now finding investing delightfully easy/accessible/cheap.

But the false hypothesis on which so much of this market is rashly pinning its hopes is expressed more plainly in another current campaign, for another firm whose name I can’t remember.  It’s a tube card showing a pair of remarkably large and ugly trainers among several pairs of polished business shoes, and the headline says (more or less) Now the jeans and the T-shirts can invest along with the suits and the ties.  Clearly the idea here is that thanks to the launch of this funky new robo-adviser, whatever it’s called, the world of investment is now, at last, accessible to younger, funkier, less starchy people who previously felt excluded and unwelcome.

I’m sure there are a few people with whom this message resonates, but I don’t think there are many.  The main reason why people who don’t invest don’t invest, if you see what I mean, is that they don’t want to invest.  As a way of encouraging them to start doing so, offering them an easy, low-cost-welcoming online service is about as likely to be effective as offering me easy, low-cost, welcoming ballroom dancing lessons.  It’s true that I perceive the world of ballroom dancing schools as difficult, quite expensive and not very welcoming, but those aren’t really the reason I don’t engage with it.  The reason I don’t engage with it is that the whole idea of ballroom dancing fills me with horror, misery, suicidal despair and existential dread.  I would rather cut my legs off with rusty scissors than put them to work on learning the steps for the pasa doble or the cha cha cha.  In short, persuading me that I have easy, low-cost, welcoming dancing schools available is a necessary but in itself spectacularly insufficient step towards changing my behaviour.

In writing all this, the thought flickers through my mind that perhaps I’m terribly, disastrously wrong.  Perhaps millions of people with pony tails, pink hair and body piercings are longing for a service accessible and cheap enough to give them an entry into the world of UK Smaller Companies and Strategic Global Corporate Bonds.

In many ways, I’d love to be wrong about it.  But I really don’t think I am.

Why do financial advisers make such terrible clients?

Some say it’s bad form to use a business blog to wage a personal vendetta, but I’m far from the first – I may even be the last.

Honestly, this is really true, not just brown-nosing – in the seven years since I launched Lucian Camp Consulting, the overwhelming majority of my clients have been an absolute pleasure to work for.  They’ve ticked all three of what I think of as the Good Client boxes – they’ve been friendly and amiable, they’ve been receptive and they’ve been open and communicative.  (Actually nearly all have ticked a fourth box too, come to the think about it – they’ve paid up remarkably quickly on receipt of their invoice.)

So, lots of grateful thanks to a long list of admirable firms and individuals.  But, there’s no denying, it’s an incomplete list.  If you grouped all those clients – I guess there must be either side of a hundred of them – into financial services industry sectors, while most sectors would be basking in warm sunlight there’d be one beset by dark clouds and rain.  Yes, the exception would be the independent financial advice firms.

I should say that a few years ago, I doubt whether this sector would have been represented at all.  Very few of the thousands of firms in this fragmented cottage industry could see any sense in spending money on people like me.  Most, quite frankly, wouldn’t have bothered even if my services were on offer free of charge – marketing and branding and all that daft colouring-in nonsense just seemed like a waste of time.  But as a waste of both.time and money, well, no-brainer.

It was the RDR that changed things, and specifically the bit about needing to tell clients what they’d get in return for that “ongoing adviser charge.”  (Previously, of course, that was what had been known as “trail commission,” and what most clients got in return for that could be briefly summarised in the word “nothing.”)  This new need for advisers to justify the ongoing charge connected strongly to what people like me call “defining the value proposition,” so all of a sudden I found I was speaking on this topic at quite a few IFA events and leaving the events with a pocketful of business cards from advisers wanting follow-up meetings.

Which all sounds great, except that it really hasn’t been.  In case any of my adviser clients are reading this, I should say that two or three have been lovely.  But most really haven’t been very lovely at all – not easy at a personal level, suspicious and dubious about everything I have to say to them and, probably worst, hopelessly uncommunicative.  The default is that most just don’t reply to things.  They don’t answer phones or respond to voicemails or emails.  The only time when they’re not maintaining a couple of months’ worth of radio silence is when they are in fact maintaining a permanent period of radio silence, having just decided to stop dealing with you without ever quite getting round to saying so.  And, needless to say, as regards that fourth box, a well known expression about blood and a stone is the only one that comes to mind.

The reasons for all this, I do appreciate, may be a) good and b) circumstantial    The firms I’m talking about here are small, and no doubt both busy and under-resourced.  And I suppose there is some benefit to me in these otherwise useless experiences – as the proprietor and indeed entire workforce of a small firm which is often busy and arguably under-resourced, they do give me the clearest possible education in the art of pissing your clients off.

The theory behind this born-again blog is that I’m supposed to choose topics that whet your appetite for my forthcoming book on financial services marketing, co-written with my old friend Anthony Thomson.  This morning, though, I’ve gone off-topic.  There’s nothing in the book about (most) financial advisers making rotten clients.  Which, if you’re among those who think this kind of personal grumbling is n’t really appropriate, is probably just as well..

More on this customer-acquisition-cost business

I think I may finally have found something to say in conference presentations which gets some attention, and hopefully not in a Gerald Ratner way.

At the Platforum conference three months or so ago, I did a talk about the cost of acquiring customers, and particularly about the hopeless situation and brief life-expectancy of start-up financial services businesses with no customers and no money to recruit them with.  In this talk, I quoted the very first hard numbers that I learned in the world of financial services direct marketing a million years ago – that whatever your proposition, market sector, target market or media strategy, on the whole, as a universal average, at least for initial planning purposes, you’re doing OK if you can generate a lead for £30 and acquire a customer for £200.

Much has changed since I first learned these numbers – well, let’s face it, nearly everything has changed.  But at least for initial planning purposes, I’d say they still work.  (They certainly work a very great deal better than the ridiculous notion that in today’s world of social media you can recruit any number of customers for no money at all, except perhaps the bus fares of the intern you get to write your Twitter posts.)

What’s interesting – by which I mean both surprising and pleasing – is how much interest these numbers of mine have attracted, and indeed continue to do so.  For example, a new Finametrica report on the emerging robo-advice (bleurgghh) market quotes a typical customer acquisition cost of £200:  without paying £995 for the report I can’t tell whether or not they’ve nicked my number, but let’s just say it’s a funny coincidence if not.

The great thing about a figure like this, of course, is that you can build a whole business plan on it.  If you want 10,000 customers, it’ll cost you £2 million to acquire them.  100,000?  £20 million.  A million customers?  £200 million. And so on.

Of course there are lots of reasons why it’s not that simple.  Particular businesses have particular issues which will force their costs up or down.  There are many of these, and perhaps the most important are the economies of scale, or perhaps as I always say the diseconomies of lack of scale:  if you only wanted, say, 1000 customers then the full weight of your establishment costs would bear very heavily on them.  The figure will require some refinement in the light of your specific circumstances – and of course the best and most accurate refinements will be made in the light of real-life experience.

But still, it’s something.  And as a corrective to the view of all those clever people starting up new FS businesses of one sort or another who all seem to be assuming they can recruit their customer bases for nothing or next to nothing, it’s actually something quite important.

In Professional Adviser’s piece about the Finametrica report today, they mention various robo-advice start-ups tackling the customer acquisition cost challenge.  One of these named in the piece is that well-known deep-pocketed financial services giant which is “Rutland-based Echelon Wealthcare.”

When the history of the robo-advice market is written, and the names of the firms which made the crucial breakthroughs are listed in the roll of honour, I will be astonished – no, let’s make that totally bloody dumbfounded – if Rutland-based Echelon Wealthcare is among them.

In praise of idiosyncracy

I’ve written about this before, but not for a while.  And anyway, I’ve written about everything before, or everything I know about financial services branding and marketing at any rate.

This is the second blog to be sparked by the Financial Services Forum session about customer experience, and how as things are currently organised there is very rarely any attempt to differentiate it:  as we said in the meeting, those involved are all preoccupied with moving along the axis that goes from “bad” to “good,” but hardly anyone pays any attention to the axis which goes from “generic” to “different.”

All this reminded me of a theory which I used to feel quite excited about, that the differentiation of many of the strongest brands flowed, directly or sometimes indirectly, from the personal idiosyncracies, beliefs and even in some cases prejudices of the people responsible for them (and, most often, the business’s founder/s).

I’ve written before, for example, about the way that the emphasis on nutrition and food value in the Mars Bar brand stems not from clever research insight into ways to help consumers feel less guilty about consuming them, but rather from the deeply-held personal views of the eccentric food scientist Forrest Mars, back in 1920s America, about the dietary benefits of chocolate.  Or how McDonald’s achieved a role as the family restaurant of choice in 1950s America because the founders happened to have a thing about cleanliness and hygiene which made McDonalds acceptable to families in a way that greasier burger joints could never be.

There are loads of other examples, from Anita Roddick’s ideas about beauty without cruelty which gave the original Body Shop much of its distinctiveness, through to IKEA’s obstinate determination to stick to their Swedishness even when expanding into markets where half their product names sound like swear words or skin conditions.

Yes, it’s true, I’ve said all of this before.  But what I hadn’t realised until now was the extent to which a large, growing and successful part of the external consultancy marketplace is spending all its energies in helping clients manage their customers’ experience at best without any regard to this kind of idiosyncracy, and at worst with a view to stamping it out wherever they can find it.

The result may be (I say “may” because I’m not at all sure) customer experience which is gradually getting a bit better, but it certainly isn’t customer experience which is getting any more different.

It would be unfair to blame the customer experience industry for not getting brand, or indeed for not getting idiosyncracy as a major component of brand.  It’s not a big issue in their world, or in the worlds of the clients who hire them.

Look at it the other way round, though and it’s a very different picture.  Customer experience is a huge thing in my world, and in the world of anyone who cares about brands in service industries.  It’s up to us to get our point of view across to the people who haven’t got it yet.

Oh dear, I wonder if I’ve just discovered the fatal flaw in my thinking

Actually, I think I may have had a bit of a road-to-Damascus moment – but in an entirely bad way, as any experience involving roads going anywhere near Damascus tends to be at the moment.

Exhibit A:  the universally-held belief held by people in my kind of line of work that brands in service industries like financial services are overwhelmingly experiential, and so are built in people’s minds out of the sum total of their experiences of the brand in question.

Exhibit B:  my own empirical observation, that while some financial services businesses provide good service, some are mediocre and many are terrible, hardly any provide a kind of service which could in any way be described as distinctive or specific to what their brand is supposed to stand for.  (There are a few exceptions to this, but not many.)

Exhibit C:  the observation by my old friend Christopher Brooks, agency man now turned customer experience consultant, at a Financial Services Forum event on this subject yesterday, that in his experience when FS businesses are working on aspects of their customers’ experience, “invariably brand simply isn’t at the table.”

Hmm.  Taken together, these exhibits are distinctly alarming.  At worst, they suggest that no-one important on the client side has ever bought a single word of what I’ve been saying for the last god-knows-how-many-years:  they simply don’t seem to accept that designing customers’ experiences in a brand-minded way is worth the bother.

Why is this?  Is it because they don’t accept that service-sector brands are indeed very largely experiential?  Is it because they just don’t care about their brands and can’t be bothered to build them?  Or is there a third reason which makes me feel a bit less miserable?

I think there might be. Imagine if you will a four-box grid about service quality, with the south/north axis going from “Bad” to “Good” and the west-east axis going from “Generic” to “Distinctive.”  My proposition – much confirmed, I must say, by the discussion at yesterday’s event – is that at most organisations, most of the time, the overwhelming priority seems to be to move up the bad/good axis, ironing out some of the truly abysmal service failings that are still endemic in our industry.

For as long as that’s the case, no-one is much worried about moving positively along the west/east dimension, building experiences which are distinctive, hard to copy and specifically designed to build the intended brand perceptions.  In short, when your inbound calls are waiting an hour or more to be answered, no-one’s too bothered about the tone of voice of the poor sod who eventually picks up the phone to another infuriated customer.

I get that – it makes perfect sense.  But, in my brand-centric terms, it’s still not ideal.  My preference – in heading towards that top-right box where we all want to be in four-box grids – would always be to move diagonally upwards.  Yes, move from bad to good by all means.  But, at the same time, move from generic to distinctive too.  In my book, brand considerations are always part of the agenda, even when you are dealing with abysmal service failures in urgent need of improvement.

It looks, though, as if those currently responsible aren’t seeing it that way, and this discovery gives me a useful sense of a focus – or a proposition – for my customer-experience-oriented activities.

And at the same time it gives me a nice clear objective for my lobbying on the subject – trying to find a place for that chair marked Brand at that Customer Experience table.

“Money On Toast targets high earners,” says the newsfeed. Targets how, exactly?

Money On Toast’s You Tube film has had 801 views.  On Twitter, they have just over 700 followers, nearly all of them as far as I can see either IFAs or industry people of one sort or another.  They have about 150 likes on Facebook, which is kind of surprising because there is very, very little to like on their extremely dreary page.

I’ve never seen a Money On Toast ad, online or offline, and although it’s always dangerous testing these things on oneself I am pretty much right in the middle of their target market, as defined in the article appearing beneath the trade press headline quoted above.

You’ve heard me grumble before that the new world of direct, D2C online investment services is never going to happen until a number of the leading players start spending some proper money on marketing communications.  It doesn’t look as if Money On Toast are anywhere near doing so.

Happy to have wasted a morning in court today

My headline is serious, not ironic.  Here’s why.

18 months ago, a lorry scraped along the side of my car while it was parked outside my house.  While the car was being repaired, my insurers fixed me up with a replacement vehicle for a couple of weeks – not, I’d have said, being a car snob, quite on the like-for-like basis promised in my policy, but a perfectly satisfactory upper-mid-range Mercedes.  A couple of weeks later my car was fixed, I gave the Merc back and I thought no more about it.

Until a year later, when a firm of solicitors based in Bromley got in touch and asked if I’d fancy being the claimant in a small claims court case.  Apparently the other side’s insurance company, while admitting liability, were disputing the cost of the hire car and refusing to pay more than half of it.  And although I had no financial interest at all in the outcome, strictly speaking it was me who had signed the rental agreement and so technically I would have to be the claimant in any legal proceedings.

Of course I could have refused to take part, but actually I thought it was right that the case should be heard so I agreed.

Which is how I came to find myself in  Clerkenwell & Shoreditch County Court this morning, represented by a barrister called Jake with a fashionably voluminous Clerkenwell beard.

The case, disappointingly, was thrown out on a technicality.  I think it was the solicitors in Bromley who’d screwed up, or it might have been my insurers:  I won’t bore you with the details, but there was evidence to suggest that my insurers had in fact accepted a payment for a little under half the claimed amount in “full and final settlement,” and no evidence to suggest that they hadn’t.  Our judge chose her words with care, but it was clear that she was fairly pissed off with our side for bringing the case to court in this pretty hopeless condition.

End of.  Or not quite.  The one other thing I learned this morning was the amount of the disputed hire charge, which for two weeks in a mid-sized Merc was just over £5500.  And those who’ve read my angry tirades on the subject of rip-off charges in general insurance will know that on seeing this, the red mist began to rise.

Back at the office just now, I’ve checked on a couple of car-hire websites what I would pay if I went out this afternoon to rent a similar upper-mid-range Merc for a fortnight, and the answer is somewhere between about £900 and £1500.  Absolutely nowhere near £5500. (And actually, still a long way short of the £2000-odd that the other side’s insurers paid in full and final settlement.)

It may seem disloyal to take the “wrong” side in this little teacup-sized storm, but the fact is that the bill they were confronted with was yet another example of the preposterous overcharging that goes on in the hideously opaque and exploitative world of general insurance.  (And, by the way, eighteen months after the original accident, I have zero loyalty to my own insurers – when the policy came up for renewal nearly a year ago, I was of course obliged to switch to another firm to avoid being screwed by the kind of gigantic increases in premiums with which motor insurers typically “reward” loyal customers.

I’m sure my little court case will have no significance at all beyond the fact that on this one occasion, a preposterous invoice for a hire car didn’t stand up in court, and the amount actually paid wasn’t completely unreasonable.  But even if that’s all the other side achieved, I’m happy, or at least fairly happy, to have spent most of my morning in support of this worthwhile cause.


“Our focus is entirely on our customers.” Well, except when it isn’t.

Of course everyone wants to be customer-focused, or -centric, or whatever.  But sometimes a problem arises:  we find ourselves with a choice between focusing on our customers, or focusing on ourselves.

Many – including me – would say that it’s the choices we make at these moments which demonstrate whether we really are customer-focused, or whether it was all, quite frankly, bullshit.

In the financial world, TPAS – The Pensions Advisory Service – is arguably more customer-focused than most.  (As a non-profit organisation, it’s arguably easier for them than for many.)

Pensions Freedom has thrown up some great opportunities for TPAS to become bigger, better resourced and more important.  As one of the chosen providers of the Government’s famous “guidance guarantee,” it’s picked up a big chunk of new funding so that it can deliver.

However, from TPAS’s point of view, a very troubling development has now emerged.  In the light of new research showing that TPAS’s impersonal “guidance” doesn’t help consumers very much and may quite often leave them even more baffled and confused, there are now proposals that before making certain decisions about their retirement savings, consumers should be compelled to take full-fat financial advice from a full-fat financial adviser, thus bypassing TPAS and having no need for its services.

There are various real problems with this, like who’s going to provide this advice and how is it going to be paid for.  But still, in principle, from the perspective of the consumer, it’s very hard to argue that it isn’t a good thing.

Unless, of course, you’re TPAS.  Seeing a chunk of their customer base – and no doubt a chunk of their funding – in danger of falling away, they’ve come up with a super-convoluted argument as to why compulsory advice isn’t a good thing, and why it would be much better if consumers took full-fat advice not because they had to, but because TPAS’s guidance guided them in that direction.

The argument is nonsensical – so much so that to be honest I’ve forgotten it – and just about the most transparently self-serving that I’ve ever seen.  It’s difficult to believe that any allegedly-customer-focused organisation could put it forward with a straight face.

Unless of course it was one of those moments where its own future success and survival temporarily came first.