If you could just stop hating these two businesses for a minute, you might learn something.

In the world of financial services distribution, surely there can hardly be two businesses more generally disliked than St. James’s Place and Hargreaves Lansdown. But if you’re in that field yourself, just rein in your ill-will for long enough to think about them a bit.

You’ll agree, I reckon, that at first glance they look very, very different from each other.

The former is tied, while the latter (when it gives advice at all) is independent. The former is still almost entirely focused on face-to-face advice, while the latter’s business is very largely direct and execution-only. The former has a minuscule Head Ofice marketing budget, while the latter spends many millions of pounds each year on direct marketing. The former is often said to be troublingly expensive, while the latter is said to be great value. And, finally, the former makes its money out of affluent investors with very little enthusiasm for looking after their own financial affairs, while the latter specialise in the most confident d-i-yers.

But actually, if you look more closely, I’d suggest you’ll find that the similarities between the businesses vastly outweigh the differences. Some are more or less coincidental: both were founded and led through their growth phases by charismatic leaders, and both are now grappling with succession management issues as these leaders finally stand down; both are, from my point of view, disappointingly suspicious of people like me, my former colleagues in the creative agency world and anything with the slightest flavour of self-indulgent vanity marketing; and, as I mentioned, both generate a great deal of negative comment and criticism from their peers, although one strongly suspects that in fact this is mainly jealousy wearing a light disguise.

The jealousy, of course, arises from a much more important similarity. Both firms are hugely successful, each probably making more money than the rest of FS distribution put together, and both generating customer satisfaction scores so stratospherically high, especially in these cynical times, that they look like typing errors. And both are hugely successful for the same crucial reason: their founders’ and leaders’ deep understanding of their key target audiences.

Peter Hargreaves and Stephen Lansdown started with an almost unearthly level of insight into the hearts and minds of self-directed private investors. They seemed to know instinctively what to say, what to offer, how to engage with them, how to build relationships over time. For hundreds of thousands of d-i-yers, they’ve almost become part of the family: it’s a relationship not unlike the one that exists between great radio broadcasters and their listeners, such as Terry Wogan and his TOGs.

Mark Weinberg and Mike Wilson were arguably even cleverer, because they had to achieve the same total empathy with not one but two key target groups: the financial advisers who are the engine of their business, as well as the advisers’ end clients. In some ways the former have been more important and more fundamental to the business’s success, but for the purposes of this blog I’m more interested in the latter: the key things that Mark and Mike have always known is that there is no correlation at all between affluence and financial sophistication, but there is a strong correlation between affluence and a preference for premium brands.

In other words, according to this version of events, both businesses have succeeded as much as anything because they’ve succeeded as brands, and have done all the important things that great brands do – identifying a clearly-defined market segment, and then providing a consistent and distinctive proposition, in both emotional and rational terms, which catered to their market segments precisely.

(In so doing, by the way, both prove a concept from the brand development textbooks: people are happy to pay more for brands they feel good about. SJP is unmistakeably and unapologetically expensive: HL has needed to invest a bit more heavily in smoke and mirrors, but actually their customers could buy a good deal cheaper elsewhere if they chose to shop around.)

I’d say that both businesses, in their same-but-different ways, provide obvious and irrefutable evidence that brand-focused strategies work at least as well, if not better, in FS distribution as in any other consumer-facing service market.

Isn’t it extraordinary that so few other firms have had the nous to follow their examples?

What’s happened to the market for freelance copywriters?

Not that I’m that close to it these days, but as far as I can see the answer is: “Very little.” It is, indeed,  the story of the curious behaviour of the dog in the night-time.

Way back in the 80s, when I was first buying the services of copywriters (and also art directors and designers), the standard rate was £200 a day.  Today, 25 years later, there is, undoubtedly, a wider range of price points – you can quite easily pay up to £1,000 a day.  But the fact remains, the standard middle-market day rate is still, well, a bit more than £200 but probably somewhere between £250 and £350 – while even on the basis of inflation alone, it ought to be £440.

Why is this? The obvious explanation is about supply and demand. Freelancers have been coming onto the market in large numbers, and from various directions (colleges, art schools, shrinking ad agency creative departments). But on the other hand, you’d think that a parallel increase in the volume of stuff being produced would easily take up the slack. And this would certainly seem to be true of copywriting: just look around at those trillions of words that firms have had to produce for the Internet, and try to imagine just how many copywriters they must need to churn them all out.

In fact, I suspect that amidst this monumental amount of out-churning, the real explanation for the fall in real-terms day rates has less to do with supply and demand and more with the commoditisation of creativity. Faced with the need to generate hundreds of thousands of words that hardly anyone is ever going to read, both buyers and sellers alike find it hard to maintain the myth that copy is something rare, precious and valuable. It’s become something that’s bought and sold by the yard.

But these changing attitudes haven’t just depressed copywriters’ earnings – they’ve all too often depressed the people who’ve had to read this stuff too. I know it’s wrong to look back to an imaginary golden age, and as soon as you slip down from the highest peak of the quality pyramid the standard has always fallen away pretty rapidly. Still, I really do hate to think of all those freelance copywriters sitting at their machines right now, cranking out commodity copy as quickly as they possibly can, in return for a mere £200 or so a day.

It may be that a lot of these people simply aren’t very good. £200 a day is a pretty mediocre day rate for any kind of skilled labour – plumber, decorator, mechanic – and it may be that a fair few of our commodity-copy-crunchers belong among this kind of peer group, and on that kind of rate, rather than among brain surgeons and rocket scientists. If so, then I suppose they have no grounds for complaint.

But if you really care about all those things we’re meant to care about in our branding, marketing and communications – distinctiveness, engagement, clarity – here’s something you might try. Next time you have any work for a freelance copywriter, offer twice or even three times their usual day rate. (It isn’t going to break the bank – it’s still a small fraction of what you pay other suppliers like, for example, me.)

Just make it clear, at the same time, that you’re looking for something that’s twice or three times as good.

Introducing the strangest tribe in financial services

There is no group of people in financial services stranger than the Protection People. Stumbling into one of their arcane rituals yesterday (otherwise known as Marketforce’s Future Of Protection conference) was a bit like stumbling into a freemason’s dinner or a voodoo initiation ceremony. There were a lot of people there saying and doing peculiar things, and as an outsider it was impossible to make much sense of it all.

The Protection People’s main concern is life assurance and related products, but in fact their real speciality is paradox and contradiction. There’s hardly a single subject on which they all agree, and on most of the really important subjects the majority of those attending are each able to hold entirely unreconcilable ideas in their minds at the same time.

For example, they fervently believe that consumers desperately and urgently need educating in the ways of life assurance, but none of them is willing to commit any worthwhile effort or resources to the task.

They feel sure that their slowly-declining industry is in dire need of innovation, but they seem to leave it to one firm – Ageas – to do it all.

They’re convinced that their products aren’t very price-sensitive, but their only major marketing tactic is to launch savage bouts of price-cutting to the detriment of everyone.

They’re committed to providing individual protection, either through intermediaries or direct, while at the same time believing that the only real opportunities lie in providing group schemes via employers.

They bemoan the fact that there’s so little consumer advertising for their category (the recent thoughtful and well-made AVIVA commercial, with Paul Whitehouse, is greeted like the second coming) yet none of the others spends a penny on it themselves.

They spend huge amounts of time and money on developing ever-more complex and sophisticated underwriting processes, while also recognising that the only big success in the consumer market is Over 50d cover which involves no underwriting at all.

At a higher level, they believe passionately that they could and should redefine their role in society, working with Government to privatise a lot of universal benefits like Jobseekers’ Allowance and Disability Benefit, but at the same time they’re also highly attracted to the extremely antisocial but lucrative idea of cherry-picking nice clean healthy lives and leaving everyone else to fend for themselves.

And unable to decide which of their three main products – life assurance, critical illness and income protection – has the most to offer, they default to the impractical proposal that consumers should spend huge chunks of their precious income on a combination of all of them.

In fact, as far as I can see, the only thing they agree about is the folly of the recent ECJ ruling on sex discrimination, and although it’s refreshing to see such a display of unity I must remind you that as I argued in this blog a few days ago, this point of view is of course completely wrong.

But otherwise, all of these fundamental disagreements and differences in perspective dominate the proceedings – while, just as strangely, causing virtually no trace of discord or even debate. Yesterday’s proceedings sailed serenely on, maintaining the most even of keels, despite the glaring and unmistakeable inconsistencies ricocheting around the room on almost every issue.

As the day unfolded I became more and more mystified by this, but in the end I think I got it. Another characteristic of Protection People is that they are infinitely much more self-righteous than anyone else in financial services. They’re quite certain that they’re doing God’s work. Religious people have to be able to hold contradictory ideas in their minds at the same time – Christ is man yet Christ is God and so forth. That wasn’t a conference I was attending yesterday. It was a synod.

Investment banker, manager, whatever

Went to a conference this morning where a highly-qualified marketing academic shared some of his thoughts on how we should go about brand-building in both retail and investment banking.  I had quite a few problems with what he said, but by some distance the biggest was that he clearly didn’t have the faintest idea what investment banking actually is.  He thought the term was synonymous with investment management, and went on about how terrible it is that these investment bankers collect such enormous bonuses just for managing mediocre funds.

My regular reader will know that I’m always very happy when I find unexpected and previously unrecognised differences between consumer and industry perceptions, especially when these are caused by what are in hindsight obvious ambiguities in the way we use language. His talk left me thinking he was a bloody idiot, but more keenly wondering quite excitedly about how many non-industry people suffer from the same misunderstanding.

If it’s a lot – which I suspect it may well be – then the consequences for the investment management industry are quite serious. It would mean that much, or even most, all the hysteria about bonuses is attaching quite mistakenly to them.

Well, I say “quite mistakenly.” To be honest, it’s not really antipathy towards investment managers, and disgust at their levels of remuneration, that are mistaken – it’s the failure to include the primary targets, proper investment bankers, within the orbit of ill-feeling.

Large pack of weasels still at large

In a magazine article about six months ago, I greeted the launch of the NatWest Customer Charter with derision. Its commitments, I said, were almost impossible to identify amidst dense throngs of weasels – words specifically chosen to provide wriggle room in the event of underperformance. (The weaselliest promise of all, as I remember, was that NatWest would “aim” to serve “the majority” of branch customers within five minutes. It is of course possible to keep this promise while not serving any customer at all in less than 11 hours – you can still say you’re “aiming” to get it down to five minutes.)

Other “promises” in the Charter, I said, were to do with things NatWest was already doing, things that all banks were already doing, things that NatWest bloody well ought to have always been doing, and things that it was intending to do for its own benefit at least as much as for the customer’s.

I thought I’d pretty much got this Charter thing sussed. But the one thing I hadn’t considered was the possibility that NatWest would consider it to be a long-term and important part of their overall brand strategy. They do. And to prove they do, they’ve just published a report – based on research conducted by Deloitte – on how they’re getting on so far against the 14 promises they made.

(To be fair, Deloitte were undistracted by the parading weasels. On branch waiting times, for example, they reported as if NatWest hadn’t bothered sneaking in that “aim to” or that “majority of” and just assumed that they’d promised to serve all customers within five minutes. Sadly, on this basis NatWest fell substantially short and have had to commit to “more work” in this area.)

But the question on my mind is this: given the depth of most people’s dislike and distrust of banks in general, and, for many, of RBS in particular, is anyone really persuaded of anything by this silly and superficial Chartering?

NatWest claims that it intends to be “Britain’s most helpful bank.” This may seem like a fairly modest objective, a bit like intending to be the Congo’s tallest pygmy. But does anyone believe that a) there’s a shred of truth in this, or b) these 14 empty and beweaselled promises have any bearing on the matter one way or another?

The thing is, if so, we’re all thinking far too hard about this persuasive communications business. If the NatWest campaign works, all we have to do from now on is decide how we want to be seen, and then cook up any old bunch of random and insubstantial reasons why people should see us like that. Could HSBC be seen as, say, the bank with the best-looking staff? A few pictures of some good-looking people and a small-print disclaimer saying that the people in the pics don’t actually work for HSBC should do the trick. Could Barclays, say, be the bank that offers its customers better weather? They don’t actually need to do anything, just “aim” to provide warmer, sunnier weather for “the majority” of their customers. Maybe Lloyds TSB could promise to hand out more valuable money. If marketing communication just consists of making meaningless claims and backing them up with bogus substantiation, then every brand can be everything it wants to be (and all of us responsible for developing them can have our work finished and be heading home every day by lunchtime).

It would be nice to think that these days, consumers are too smart and too sceptical to fall for such ridiculous tricks. (I’m hoping they’re as dodgy about NatWest’s 14 promises as they are about Carpetright’s SAVE SAVE SAVE windowbills discussed in my last blog but one).

Time will tell. Meanwhile, I’d personally have more confidence in NatWest’s commitment to helpfulness if they introduced a 15th promise – to stop padding out the other 14 with truth-bending weasels.


I was sending some flowers just now (don’t worry Jude, there’s an entirely innocuous explanation), and I noticed that on the time-of-delivery menu there’s a new option.  If you’re happy for them to deliver any time, there’s no charge.  Or for an additional £4.99, you can ask them to deliver in the morning, in the afternoon, in the evening or – this is the new option – any time except during the school run.

Sensible and realistic, maybe. Romantic, probably not, except in a flicker-of-romance-survives-parenthood sort of way. Sign of an organisation that really knows its target demographic, definitely.

On the carpet

Back in the heyday of Blog 1.0, I gave the carpet retailer CarpetRight a right carpeting. “Visual pollution” was about the kindest phrase I had for their repellently cheap and nasty stores, promotional materials and advertising. Why oh why, I wailed, must quite decent and expensive items like carpets be sold in this preposterously crude and old fashioned way?

As I recall, this was just a rhetorical question. But returning to the subject, in Blog 2.0, I’m keener to give answers. I reckon the entire reason for their ghastliness can be found in the first line of the chairman’s biography on the website: “Lord Harris is now in his 53rd year in carpet retailing…”. That’s it. That’s all you need to know. The boss has been doing it 53 years, and he’s lost the plot. His style of retail marketing will be forever about 1968, when this kind of lurid, manipulative nonsense was SOP for the likes of MFI, Moben, Brentford Nylons, Courts and all the other fourth-rate home furnishings retailers whose names we’ve long since forgotten. Somehow, Lord Harris’s Carpetright staggers on, the last of the line, hopelessly out of date and off the pace and, despite the fact that profits have collapsed over the last three years, completely incapable of change.

Which is the point of this blog. For all the talk in my world of the need to be market-aware and customer-led, the reality is that in business the huge majority of us do what we do. If the market likes it, and goes on liking it, then we make a ton of money. If the market doesn’t like it, or stops liking it, we’re stuffed. Very few of us have it in us to be something else – and if we try, our efforts lack as much conviction as Lord Harris’s would if he tried to understand about style, taste, added value and the natural human desire for something more rewarding and meaningful than BIG BIG BIG SAVINGS.

This line of thought fits pretty neatly with my Nutcase Billionaire theory, which says that it’s a matter of sheer luck and happenstance whether the market decides you’ve come up with a great idea, or writes you off as a lunatic. As I recall from my distant days on confectionery advertising, Forrest Mars 1st was a rather eccentric food scientist who believed that chocolate and sugar were good foods that had the answer to America’s depression-era nutrition crisis. He decided to make a handy-sized bar to put his theories into practice. The rest is history. But if his studies had taken him in a slightly different direction, he might have come to believe that turnips, say, or ox liver were the foods to nourish America. The rest would still have been history – but a rather different history.

There’s not so much of a difference between Forrest Mars and Lord Harris of Ugliness. They’re both one-trick ponies. They do what they do. The public takes it or leaves it. With Mr Mars’s lead product, they’ve taken it for 70 years or more (although actually I notice the Mars Bar has fallen sharply down the Top 100 grocery products league table in the latest 2010 edition just published). With Lord Harris’s horrible stores, they used to be keen but are now steadily getting very unkeen. I don’t have the figures, but I bet that John Lewis’s carpet department isn’t suffering like Carpetwrong.

It would be nice to think that Lord Harris would rethink, and in so doing decontaminate some of the retail world’s very worst eyesores. But I’m not holding my breath. A tiny handful of business leaders are genuinely capable of reinvention. The very large majority just repeat the only trick they know. And if the watching crowds start to dwindle, it doesn’t make any difference. Their firms just carry on till there’s no-one left at all.

Old brands, new world

I’m not in the slightest doubt that the Internet has created a huge, world-changing, still-continuing explosion in new business models and new brands.  I think that’s wonderful.  As I’ve said many times, it’s an absolute privilege to be doing what I do at a time in history when it’s all going on.

The question I’m thinking about today, though, isn’t to do with all those gazillions of new brands and new models. It’s about long-established, existing brands with long-established, existing old world models and long-established, existing customer relationships. How much have they been changed – and how much should or will they be changed – by the Internet?

Important though they can be, I’m not very interested in straight substitutions – people engaging with brands online in ways that they used to engage offline. Online grocery shopping is quite a big behavioural change for people who do it, and it’s a big operational and organisational challenge for firms who offer it. But at the end of the day, it’s still just shopping.

On that basis, when I think about my relationships with old brands in the new world, I still find that extraordinarily little has changed. Staying with grocery shopping, for example, I like Waitrose’s online recipe service – but then again, Waitrose has offered the same recipes on in-store cards for many years. And when I think about the groceries I buy there, I can hardly think of any that have significantly extended their relationship with me into the online world. There are one or two who offer me loyalty points, or who send me details of promotions and vouchers, but heaven knows plenty of that has always gone on in the offline world. And there are a few which show me amusing online games, or jokes, or viral commercials – but I’ve been fishing games and jokes out of cereal packets since I was a kid.

But otherwise, I think I relate to the family’s chosen beverage, ready meal and cleaning product brands in pretty much the same way that I ever did.

It’s more difficult to say whether the same is true in the world of services. Arguably, what I dismissively described as “straightforward substitutions” are often more significant than they first seem in this part of the world. For example, when we say our short-haul, short-stay travel options have been transformed by the development of the low-cost airline business model, we should recognise that this model is actually at least as much to do with easy, quick, online ticketing as it is to do with low prices and no frills on board.

Still, on that basis the low cost model is a new world, post-Internet phenomenon. Has our relationship with old world airlines changed to a similar extent?

I’d say not. We buy tickets and check in online, and we go online to check our loyalty points rather than wait for paper statements. This is generally easier and quicker than doing these things the old-world way, although I must say that on the rare occasions when I travel with hold bags I usually find myself wondering exactly what the difference is between “check in” and “fast bag drop.” (I quite often also find myself wondering what kind of hellish experience a “slow bag drop” could possibly be.) But, again, these are substitutions. The experience of long-haul travel – and the nature of our brand relationships with long-haul airlines – haven’t really changed.

Of course, as well as creating new ways to buy and use products and services, the Internet also offers new ways to communicate and interact with the companies that provide them. These create new threats and opportunities. Looking at it from the companies’ point of view, it’s good that you can talk to customers at virtually no cost, and, theoretically at least, in more targeted and relevant ways. But it’s bad that it much easier for customers to give you a hard time, and even worse that they can give you a hard time publicly. (We’ve all enjoyed the case histories of people with complaints going viral on You Tube or whatever and doing massive damage to companies’ reputations.) It’s difficult and expensive for brand-owners to come to terms with all this, but even so I’d still argue that ultimately we’re talking about substitutions. Pissed-off customers could always stand outside offices with placards and dump JCB-loads of manure on the head office steps.

I’m trying hard to think of any old-world brand with which I now engage significantly differently, via the Internet. I suppose it all comes down to what I mean by “significantly differently,” but I can’t think of one.

This raises questions. First, obviously, am I right, or am I just being thick? And second, if I’m right, what does it mean? Is it that pre-Internet brands established perfectly satisfactory relationships with customers, and apart from some mutually-beneficial process substitutions there’s no real need to change? Or is it that we’re still at a stage where these rut-stuck old-timers haven’t found the wit or vision to imagine how things might be dramatically different?

As you can see, I don’t know. It would be good to hear your thoughts.

Good heavens, I seem to have been ahead of the curve

I have in front of me a quote from a very trendy branding expert called Mark Earls.  He says:  “We talk of the relationships consumers have with our brands as if they were primary, but the data points to things being otherwise.  Consumers’ most valuable relationships are not with brands but with other consumers.”

Depending a bit on what he means by this, the expression “no shit, Sherlock” does rather come to mind. If he simply means that on the whole people care more about each other than they do about brands, I don’t really think his comment adds much to the sum total of human wisdom.

(I can’t actually check what he meant, because, oddly, if you google his words you find hundreds and hundreds of people quoting them, but no trace at all of the original source. It makes you wonder if this Earls cat ever actually said them, or whether some blogger or journalist just made it up because it suited their argument, a bit like the way I made up quotes from Wuthering Heights in my English A Level.)

Anyway, assuming that he didn’t just mean that people’s relationships with each other are more important than their relationships with floor-cleaners and yellow fats, what else might he have meant?

This is where my ahead-of-the-curveness might come in. It’s at least three years ago, maybe a bit more, that I first proposed the idea that the strongest and best relationships between people and financial services brands were likely to be triangular relationships, bringing individual customers together not only with the brand, but also – mainly thanks to the Internet – with other individual customers.

In those days we described this sort of thing as being to do with “online communities,” but these days we talk about “social media.” Actually, I don’t think that either phrase is much good, but if anything “social media” is the worse. Still, that doesn’t really matter.

As I recall, I started developing this line of thought as the result of a real-life event – when Judy’s parents started to become too old and frail to continue to live independently, and it was necessary to start investigating what would be involved in their moving into sheltered accommodation. Taken as a whole, this turned out to be by far the greatest single upheaval in their whole lives, and one that raised literally dozens of questions and issues – many undoubtedly financial, but others to do with all sorts of different aspects of their lives.

As we, they and other members of the family struggled to get our heads round it all, I kept thinking that all over the country there must be thousands of other families who had been through all the same issues, or were currently doing so, or were about to. And yet none of us was in touch with each other, and we were all individually going through the same complex and difficult learning process without being able to benefit in any way from the experience and learning of others.

I would have been delighted to have been in touch with others – to learn from those whose experience was ahead of ours, and to share learning with those running behind us. And who would have been better to facilitate that contact than a financial services provider with products and services relevant to the needs? It would have been an invaluable role for a financial institution to play – a perfect example of Mr Earls’ alleged observation that “consumers’ most valuable relationships are not with brands, but with other consumers.”

I wandered around the industry preaching this message for some while. (I concentrated particularly on the mutual part of the industry, because I thought all this online community/social media stuff could offer a whole new 21st-century lease of life to the concept of mutuality.) My preaching was received with reasonable enthusiasm, but, as far as I know, led to little or no real action. Some organisations cited practical difficulties, and many spoke of regulatory obstacles (I have absolutely no idea why the FSA should want to discourage people from helping each other, but as far as consumers are concerned the FSA is incapable of seeing a stick without getting hold of the wrong end of it).

After a while I got a bit tired of all this, and started preaching about other things. But I’m quite excited to find that a bunch of new branding specialists are now thinking and preaching along very similar lines.

It’ll be interesting to see how they get on. And, of course, incredibly irritating if they do better with it all than I did.

All over by Christmas? Not with Procurement involved.

I can’t give details because I’m NDAd up to the eyeballs, but I know someone who took part in a Procurement-led review of a large financial services group’s suppliers in a particular category.

The review took place towards the back end of last year, and it was both exhaustive and exhausting. There were scores of pages of details to fill in, and a very complex and stressful online reverse-auction process offering all the participating suppliers a chance to cut each others’ throats, as well as their own, with unsustainable bids.

The Procurement team said that the results of the review would be available by Christmas. Today is the 8th of March. The person I know has still heard nothing officially from the Procurement team, and the people within the company who use the services of the suppliers in question say they can’t cast any light on the situation either.

Within the review process, there are many small firms who depend hugely on their relationships with the big company in question. In some cases, if they were to be dropped from the big company’s roster, they would be out of business.

The incompetence, selfishness and lack of consideration on the part of the Procurement people beggars belief. I can’t find the words to express my contempt. If I had the power, I’d sack all but, say, two or three of them. And make them wait three months to see which two or three had survived.