“Birthdate Lottery.” Remember, you read it here first

We all know about postcode lotteries.  They’re journalistic shorthand for the inconsistencies in prescribing policy between one NHS Trust and another which mean that if, say, you live in Guildford and feel a bit peaky you’ll be showered with all sorts of state-of-the-art pharmaceuticals, whereas if you’re across the border in Godalming you’ll be sent on your way with a packet of Nurofen.

I’ve come up with birthdate lotteries as a phrase to describe much the same sort of thing, only to do with the effect of stock market volatility and other dramatic market movements on the value of people’ retirement savings pots.  It’s a birthdate lottery that means anyone born in 1942 and retiring at age 65 could have cashed in their pension fund at the top of the market, whereas anyone born in 1943 would have done not much more than half as well, especially if they were foolish enough to have been born in late 1943.

In these volatile times, the birthdate lottery concept could be used to describe the inconsistency of all sorts of financial outcomes:  whether first-time buyers are able to find a mortgage, for example, or what kind of return retired people can expect from an annuity, or even the cost of maintaining a balance on a credit card.

But at some intuitive level, these examples seem somehow less lottery-like.  Interest rates do move up and down, always have, always will:  it’s unreasonable to complain that your date of birth exposed you to, say, the stratospherically-high rates of the early nineties without recognising that you’re also still around to enjoy the bathyspherically-low rates of the late noughties.

No, more than anything it’s the value of retirement savings, whether in a pension or in another vehicle or vehicles, that seem the most profoundly and irredeemably affected.  If you were born in 1942 you got out on a high:  if you were born in 1943 you watched in horror during your last months of employment as the value of your hard-earned fund fell by about half.

As I’ve written before, for ordinary people with ordinary levels of savings that are in any case inadequate to provide anything like an acceptable standard of living in retirement, that seems to me absolutely unfair, unreasonable and unacceptable.  Hopefully, as a soundbite, the concept of the birthdate lottery will help everyone to understand that.  �

After 40 years, a non-rubbish ad from the Co-op

It’s far from perfect – a weak ending, and more than a touch of the self-congratulatory corporate film about it – but the new Co-operative TV commercial, 2 1/2 minutes long and featuring advertising’s first Bob Dylan soundtrack, is their first half-decent ad since about the time when they were caring and sharing, I was doing my A Levels and Bob was recording Self Portrait.  And that’s a very long time ago.

In saying that, I have to make an honourable exception of the Co-operative Bank, which has produced a good deal of very acceptable advertising both on its own behalf and on behalf of its branchless subsidiary Smile.

But I’m afraid I don’t have to make an exception, honourable or otherwise, of the dreadful advertising I wrote for the Co-operative Wholesale Society between about 1981 and 1984 – a period during which I learned a great deal but, I must ruefully admit, inflicted much grief and misery on the TV-watching public.

In those days, and I suspect for most of the period since, the various different arms of the Co-operative movement were far too complex and fragmented, too enfeebled, too riven with political infighting, too shabby and third rate, too skint and, crucially, too lacking in any kind of confidence or self-belief to be able to commit to doing anything even half-decent.

Against that background, the new epic seems genuinely important, as a piece of advertising from an organisation which, after what seems like an eternity, is ready to start believing in itself again.

I’ve spent a lot of time over the last year or so focusing on the mutual sector of the financial services industry, where in many ways the situation is very similar, if still much more fragmented:  a hundred or so building societies and mutual insurance companies feeling the first stirrings of self-confidence and self-belief after over a century of playing second fiddle to the proprietary companies.  (As far as the proprietary companies are concerned, I use the word “fiddle” advisedly.) 

Among the mutual financial services providers, the biggest, Nationwide, is now running its first corporate campaign for a long time, using the strapline “Proud To Be A Building Society” and seeking to establish as much distance between itself and those big nasty (and broke) banks as possible.  And Britannia, the second-biggest, has been doing something similar for some while, but is likely to stop now that it has announced its intended merger with Co-operative Financial Services.

It’ll be interesting to see if any of the big mutual insurance companies (Royal London?  LV?) make moves in the same direction and give the renaissance of mutuality a further boost.  I hope so.  After many, many lost decades, the Co-op’s new ad is just one of a growing number of straws which, as Bob Dylan puts it in the soundtrack, are blowin’ in the wind.�

What a lot of passion I’ve been missing

I have a new, albeit temporary, favourite book – Marketing magazine’s “Little Black Book,” given away free with last week’s issue and acting as “the definitive guide to powerful marketers 2009.”

It includes brief biographical and personal details of about 250 senior client-side marketing people, and although the selection itself is pretty eccentric a lot of the details are riveting.

One of the best bits is the replies from the selected marketers when asked to describe themselves in just three words.  Two ideas stand out head and shoulders above the others.  The runner-up personality attribute, admittedly expressed in a number of different ways, is optimism:  the winner, by miles and always expressed in the same way, is passion.  I haven’t actually counted, but I would guess about 30% of the respondents choose this word.

I certainly do know, and have met, senior marketers who are clearly passionate about what they do – but not many:  I’d say closer to 3% than 30%.  The disparity raises a number of possibilities:

1. The respondents in the Little Black Book are kidding themselves, and aren’t very passionate at all;

2.  They are indeed passionate but in a weirdly understated and unnoticeable way;

3.  There aren’t anything like as many passionate marketers in financial services as there are in other areas;

4.  When they say they’re”passionate,” they’re not thinking about work;

5.  They think it’s what they ought to say, but they don’t really mean it.

I suppose it’s probably a bit of a combination of all the above.  And to be fair, it’s not really surprising or unusual:  when I run workshops with clients to define equivalent corporate characteristics like Brand Values and Brand Personality, there’s a small handful of Usual Suspects concepts – integrity, teamwork, innovation, quality, etc etc etc – that occupy about two-thirds of the available places.

It’s the other ones, though, that tend to stick in your mind and really do the job of defining and differentiating that these things are supposed to do.  I couldn’t tell you who in the Little Black Book claims to be “optimistic” or “passionate.”  But I distinctly remember the ones who used their three words to describe themselves as “Gary Neville lookalike,” “bald white male” and probably my favourite, “lucky, lucky bitch.”

I’m not kidding about the “favourite book” thing – I’ve been poring over this slim tome for days, and I suspect I may come back for some more statistical analysis in forthcoming blogs.  Bet you can’t wait.�

Structured products and hospital pies

Structured investment products have taken a lot of flak lately.  Not because consumers don’t want or need them – in principle, trading off some upside for a downside guarantee is exactly what millions of consumers do want.  No, the criticism, in what seems like dozens of articles in trade and consumer media, is on a completely different basis:  that the complexity and opacity of the products often conceal all sorts of nasty – some even say “toxic” – aspects, ranging from excessive charging to unnecessary and undisclosed risks.  In short, the critics say, if investors knew what was in many of these products, they wouldn’t touch them with a bargepole.

That’s what they have in common with hospital pies, or at least with the pies served to patients at the long-defunct St Luke’s Hospital, in Guildford, in the early 70s.  I know, because for a short while it was my job to make them, just how deceptive their external appearance actually was:  beneath that nicely-browned pastry there was all sorts of more-or-less toxic rubbish, from chicken that came in boxes marked “Not Fit For Human Consumption” to pieces of meat and vegetables salvaged from the unfinished platefuls that came back from the wards.

There was a reason for this and all the other horrible and corrupt practices that went on in that kitchen:  the catering manager was on the take.  To enable him to siphon off as much as he wanted, we cheated and deceived our customers – the patients and staff of the hospital – as much as we thought we could get away with.

And this, I fear, is exactly what some providers are trying to do with structured products.  Structured products are, by their nature, complex and opaque.  But the presence of complexity and opacity doesn’t actually oblige providers to rip off their customers, any more than the presence of a dark and secluded path near a train station obliges those passing along it to become muggers or rapists.  But in the same way that a few people walking along secluded paths can’t resist the urge to mug and rape, it seems as far as I can gather that too many providers dealing with the complex and opaque just can’t resist the urge to cheat and deceive.

And if there’s one aspect of the whole story that’s even more depressing than this, it’s the fact that in the many media articles I’ve read, the journalists don’t even bother to point out that the toxic features of the products actually represent a deliberate choice on the part of the providers in question, not an inevitable consequence.  To the writers, the inability of the providers to resist conning the public is too obvious and self-evident to be worthy of comment:  it’s just what they do.

Assuming that the regulator doesn’t do anything about this (a pretty safe assumption, since a) the regulator rarely does anything until years after the damage has been done, and b) the regulator usually tends to focus on the trivial rather than the important), I suppose providers would only be likely to change their behaviour if their market started voting with its feet.  Consumers are unlikely to do this:  the product benefits are too attractive, and the drawbacks too well hidden.   But it does now seem to be the case that quite a lot of IFAs do now have a problem recommending structured products, having come to understand some of what lies beneath that golden crust.

If that trend continues, in due course providers may find themselves facing a dilemma:  either clean up their act, or overcome IFAs’ lack of appetite, even at the price of making the products even more toxic to consumers, by ladling in another sloosh of sales commission.  I wonder which way they’ll go. 


Separated at birth?

I’m not sure why I’m sharing this thought with you. But if you came here via the Tangible Financial home page (www.tangible-financial.co.uk), with its pictures of the somewhat oversized hero of the Nationwide TV advertising campaign Mark Benton, that very cute little baby in the panel featuring the latest creative awards won by our children’s savings account Jump and, er, yours truly, did it occur to you that in our somewhat spherical and chubby-cheeked way, the shape of the heads of all three of us are startlingly similar to each other?

Proof of the power of advertising

They introduced a new idea at Waitrose recently.  If you’re a fellow loyalist (99% of this blog’s readers), I’m talking about the green plastic tokens.  If you’re in the other 1%, you’re missing out in so many respects - of which one of the newest is that now, as you leave the checkout you can pick up a little green plastic token, and then post it into one of three transparent perspex bins just by the exit.  Why would you want to do this?  Because in so doing, you’re casting a vote for one of three local good causes – mostly charities, and other underfunded organisations, doing good work for people with special needs, or children, or ethnic minorities, or other groups in need of support.  And after a period of time – I think it’s a month – Waitrose makes a charitable donation in line with the wishes of is customers, as expressed by their green token votes.

(You may have noticed a slight haziness around that “donation in line with…”.  How much is the donation?  Ten quid?  A grand?  I’ve no idea.  And is it winner takes all, or pro rata to the votes cast?  Haven’t the foggiest.  But whatever, you have to say it’s very, very Waitrose.   Can you imagine Tesco running such a scheme?  Or Morrisons customers playing along with it?  In Holloway, where I shop, they’d just nick the tokens.) 

Anyway.  What’s this got to do with the power of advertising, and in fact specifically copywriting?  Well, quite a lot, actually.  The thing is, shoppers’ voting behaviour is driven largely by little postcard-sized displays on top of the three perspex bins, naming the month’s good causes and providing about 100 words of explanation about them.  And you will very rarely see such an immediate and graphic measurement of the power of three short pieces of copy.

Noticing that quite often, one of the three good causes is pulling twice as many tokens as the other two put together, I sometimes think of offering my services to one (or even both) of the laggards.  Squeaky bum time or what:  one of the things that holds me back is the terrifying possibility of returning to the store a week later, to find that my copy has done even worse.  But actually, I doubt it.  I’m not sure who writes it currently – someone working in the store, I suspect – but it’s so bland and factual that it’s impossible to believe that cranking up the emotional temperature wouldn’t pay dividends, at least in the short term.  (In the longer term, of course, it would probably trigger off a heartstring-pulling tug of war, in which increasingly hysterical copy would ultimately net out as a zero-sum game.) 

Writing those bin-top paragraphs seems, on the face of it at least, an absolutely perfect exercise for a copy test, if anyone still does copy tests – at first glance,  as pure and clear a test of the writer’s skill as it’s possible to imagine. 

On further examination, though, like so many things in life, it’s a bit more complicated than it looks.

The first level of complication – perhaps rather obviously – is that empirical evidence indicates that certain kinds of good cause pull better than others.  There are two key points.  First, in terms of the beneficiaries, there’s clearly a hierarchy, with animals at the top, then children, then adults at the bottom.  (There’s probably a sub-hierarchy among animals, too, from meerkats and donkeys at the top to snakes and insects at the bottom, but I have no evidence for this.)  And second, in terms of the nature of the good cause, charities clearly pull very much better than organisations run by local authorities or other public sector bodies.  A local primary school did extremely badly with a recent appeal for money towards a playground climbing frame, while a centre providing physiotherapy to ageing farm animals saw its perspex bin overflowing within days. 

(Actually, I made up the physiotherapy bit.)

And there’s another less obvious complication:  the Waitrose shopper’s love of the underdog.  As soon as one of the three competitors starts pulling significantly ahead, the highly-developed sense of fair play of the British middle classes obliges us to support the others, even if they’re local authority schemes supporting marginally-disadvantaged adults.

So all in all, maybe it isn’t quite such a pure test of advertising copy as I thought.  Or then again, maybe I just think about these things too hard.

Two big questions for the new Money Guiders

The new, free-to-use, universal Money Guidance service is now moving rapidly towards its Spring pilot in the north-west of England.  It’s going to be an absolutely fascinating exercise.

Giving people free, simple, unbiased, sales-free guidance is a very good thing.  But I see two issues which will be very difficult to overcome.

First, I think that no matter how it’s branded, marketed and promoted, the service will always struggle to maintain its focus on what its ultimate sponsors – the Treasury – see as its primary role:  encouraging more young mass market and downmarket people to put more money into long-term savings.   Trouble is, this just isn’t the guidance that most young mass market and downmarket people want to hear.   On the whole, they want and need guidance on day-to-day financial issues, particularly to do with debt.  It is mainly older upmarket people who want advice on savings and investments, especially now when they look with horror at the risks of investment and the hopelessly-low returns on savings.  In between young families panicking about mortgage savings, and retired people panicking about their investment income, I think the guiders will struggle to keep their eye on Alistair Darling’s ball, so to speak.

That issue has existed from the outset.  The second issue – an aspect of one of my pet subjects at the moment – is a newer one: what kind of guidance can usefully be given to those people who actually are willing to put some money into long-term savings?  What will the money guiders favour?  Equities?  I’d love to see the sales aids, at a time when all that extra risk has delivered a lower return than cash over 20 years.  Deposit-based savings at 1% interest or less?  Don’t make me laugh.  The fact is, in the current investment climate, the argument that paying down debt is by far the most effective form of “saving” is more powerful than ever.

This may well be useful guidance for those to whom it’s given.  But it wasn’t at all the idea behind setting up this expensive and complex new scheme.

What Bruce, Marco Pierre, Elle, Ringo and Mariella have in common

I could have added Sir Ranulph Fiennes, Alice Cooper and Dame Edna Everage:  does that help?

By now, either you’ve got it or you haven’t:  if you haven’t, they’re among the line-up of celebs who appear in the current advertising campaigns for the country’s two giant insurance companies, Norwich Union and Standard Life.

The first thing you have to say is that it’s a strange and somewhat embarrassing coincidence that both campaigns should appear simultaneously.  NU and Standard are, after all, the Coke and Pepsi, the Persil and Ariel, the Carling and Carlsberg of the UK life industry:  I’m surprised that no-one else seems bothered by the awkwardness of the situation.

The second thing is, it’s interesting how the Standard Life campaign isn’t going to be hated anything like as much as Norwich Union’s.  I’ve written a couple of times in this blog how NU’s extravagant vacuity is so out of keeping with the spirit of the times that passing commentators simply can’t resist giving it a kick.  Standard Life’s campaign, although very similar, avoids all NU’s most irritating characteristics.  It isn’t on TV.  The idea isn’t as silly and simplistic.  There aren’t as many celebs.  It features quiet and fairly classy black and white photographs.

But the third thing is, without a shred of evidence, I’ll bet any money that NU’s campaign will be overwhelmingly succesful in achieving its aims, while Standard Life’s will be overwhelmingly unsuccessful.   Why?  Well, see point 2 above.  Standard Life isn’t on TV.  Its idea isn’t silly and simplistic, but unfortunately it’s tortuous and obscure instead.  It has fewer celebs, and it doesn’t actually say who they are (even I spotted Marco Pierre, with his huge Balzac-ian head, but my wife had to help me with Mariella and Sir Ranulph).  And it features quiet and rather dreary mono photographs.

Funny old game, advertising.  Both campaigns are a) pretty similar, and b) pretty hopeless. But at the same time, the differences are important.  Things that people dislike about NU’s campaign will make it successful.  Things that people dislike much less – maybe even like a little bit – about Standard Life’s will make it fail.�

Can you cook sea-bass on a brazier?

Watching the TV news pictures of so-called wildcat (why “wildcat”?) strikers protesting about the decision of the oil company Total to choose Italian and Portuguese workers, rather than British ones, to build an extension to their Lincolnshire refinery, I can’t help contrasting their sense of outrage and determination to get the decision reversed with the supine passivity of the middle classes.

The fact is, over the last year or two thousands of times more people have lost billions of pounds more money as a result of various aspects of the credit crunch.  Stock market falls have slaughtered the value of pension savings.  Firms switching from defined benefit to defined contribution pensions have cast thunderous clouds over the retirement prospects of millions of employees.  Huge reductions in interest rates have brought about an enormous transfer of spending power from savers to borrowers.  And of course some either have already lost, or will eventually lose, large chunks of their money in particular crises and scandals like the collapse of the offshore branches of Icelandic banks and the failure of badly-regulated hedge funds.

Yet amidst the carnage, there’s no sign of any level of protest beyond the careful crafting of disgruntled letters to the editor of the Daily Telegraph.   No taking to the streets or manning of barricades;  no protesters in Parliament Square;  no marches up and down Park Lane;  no uplift in IKEA brazier sales.

This is surely a mistake, not least because visible (which means physical) protest works.  Indeed, the evidence on the news this morning is that probably as a result of behind-the-scenes pressure from an anxious government, Total are already rethinking their preference for Souther European workers. 

Admittedly it is bloody cold at the moment.  Perhaps we’re all just waiting for the coming of spring.  Or maybe for Delia or Gordon or someone to tell us how to prepare osso bucco on a brazier.  But actually, I think it’s a lack of courage and commitment.  And until that changes, we’re all going to keep getting screwed. 

Have you tried buying a couple of stamps lately?

Peter Mandelson’s new plan to re-invent National Girobank is exciting.  If the State is going to own half the retail banking sector by accident, it may as well own another chunk of it on purpose.

But one thing that has changed, and not for the better, since the Government decided to put the banking services available through the Post Office into the hands of Allied Irsh Bank, is the length of the queues.

At my local post offices in Camden and Tufnell Park, the average queuing time is between 30 and 60 minutes.  What would happen if you added in a successful and popular banking service to all the other things that people are grimly waiting for doesn’t bear thinking about.

With any luck it’ll be an unsucessful and unpopular service, so it won’t make much difference.