Do you know the difference between saying thank you, and cross-selling?

It’s not a trick question, and I wouldn’t have thought it’s a difficult one to answer.  Saying thank you is what people do to express their gratitude when someone has done something than has pleased them.  Cross-selling is what organisations do to try to increase the value of their existing customers.  Pretty different, huh?  Not obviously easy to confuse?

You’d have thought so.  But the funny thing is, there seem to be an awful lot of people in financial services at the moment – especially those working in CRM and direct marketing – who seem to be having huge trouble distinguishing the two.  I keep on receiving cross-sell communications of one sort or another which are dressed up with “thank you” messages:  apparently, because I already hold some kind of product from the organisation in question, as an expression of their gratitude I’m allowed to buy some more stuff from them.

Expressed like this, these communications make no sense at all.  But in fact, I have left out one piece of the jigsaw, which is that to prove the organisation’s gratitude some sort of discount is usually available, very likely 10% and maybe even 20.

In reality, though, we all know this makes little or no difference.  At the same time that the organisation is “thanking” me with a 10% saving on another product, they’re very likely offering non-customers discounts of 25, 30, maybe even 50% if they’ll only just cross the line and become customers:  we all know that the really big discounts are available on new business, and if you’re an existing customer, especially a “loyal” (i.e. inert) one, you’ll get ripped off for the rest of all eternity once you’ve been “thanked” with your silly little 10%.

One of the reasons why consumers distrust and dislike financial services companies is that they feel that they treat them like fools.  Years ago, when I was working on the MORE TH>N brand and its advertising, we were fairly determined not to give them additional evidence to support this belief. When I see MORE TH>N advertising on TV, as they currently are, making as much fuss as they can about the 20% saving available on cross-sales as a “thank you” to their loyal customers, I know that millions of people are thinking “They’re treating us like idiots.”  And they’re not wrong.  Sadly, that’s exactly what MORE TH>N are now reduced to.

Must “being consumer-focused” mean “being really dumb”?

A million years ago, I used to work on car advertising, mostly for Peugeot.  On the whole, even in those days, the car industry was fairly consumer-focused:  we put customers, and their needs and issues and perceptions, more or less first.

By definition, if customers are first, everyone else has to be second or third or worse, and this was definitely true of Peugeot’s talented and long-suffering engineers.  They long-suffered from lack of first-ness in at least two ways.  First, their brief from the customer insight people who’d done the focus groups included loads of trivial and fatuous detail about the number of cup-holders required: they would do their best to meet these absurd requirements, while putting their hearts and souls into coming up with a brilliant and mould-breaking new front suspension linkage.  And then second, when the car was about to launch and they finally got to see a preview of the new  launch TV commercial, it was full of pictures of the bloody cupholders and the front suspension didn’t appear at all.  The engineers were infuriated by all this.

Every now and then, by sheer luck, a story would emerge which was both appealing to consumers and important to engineers.  The coming of ABS was a good example.  Consumers liked the idea of cars that could swerve round tractors on wet and muddy roads without losing control, and the engineers thought that the way the valves relieved the pressure from the master cylinder was kinda cool too.  But when push came to shove, the marketing messages would always prioritise what mattered to the customers – cupholders, metallic finishes, iPod docks, keyless entry, stuff that the engineers thought meant nothing and mattered less.

I could tell similar stories about life as an engineer in pretty much any other consumer-focused market, from tablet computing to pain relief tablets.  What seems exciting and motivating to consumers is, all too often, dumb and trivial to the engineers.  What seems exciting and innovative to the engineers would seem confusing and nerdy to consumers if anyone made any attempt to share it with them, which they don’t..

But my point, as you’ve probably already spotted, is that this prioritisation is still reversed, at least 90% of the time, in most of financial services.  Fund managers, for example, a) still manage overwhelmingly the funds they want to manage, not the funds consumers want to invest in, and b) insist that the advertising and marketing campaigns talk about suspension geometry rather than cupholders.  And if most consumers don’t understand and don’t care, that’s their problem:  if only we could get some decent financial education onto the curriculum in this stupid country, within ten years or so they’d be almost able to understand us.

What I’m saying is that by this simple test – whether advertising campaigns baffle consumers, or irritate experts – you can tell how consumer-centric a market sector, or a firm within a market sector, actually is.  And in financial services, the test – let’s call it the Cupholder Test – shows that the answer is unmistakeably “not very.”

“Ten tips for creating a perfect business.” Or maybe nine?

The estimable Gill Cardy has posted a list, originally produced by Holt PR, of the aforementioned ten tips –

I don’t think anyone much could argue with nine of them, but one hits me in a place that was sore through all the years that I had jobs which involved managing people.  It says:

5. Delegate, delegate, delegate
We surround ourselves with people, but don’t delegate. Just because you think it’s a rubbish job, it doesn’t mean it’s a rubbish job for somebody else.

I’m not stupid, and I can see that the case for delegation is overwhelming.  If you don’t delegate, then, among other things:

–  Your business will be unable to grow beyond your own capacity;

–  You will become exhausted and miserable;

–  You won’t get the best out of all those lovely and expensive people you’ve hired;

–  The lovely and expensive people will become demoralised and will leave.

No-brainer, huh?  You’d be nuts to let all those terrible things happen.  But the trouble is, the case against delegation is pretty overwhelming too, especially when you take into account various practical, shorter-term, real-world issues:

–  Delegating work to other people is often miles slower than doing it yourself, especially when they need briefing and rebriefing two or three times.  Most jobs are horribly urgent.  We just don’t have time for this.

–  Delegating work to other people can easily take up more of your own time than doing it yourself.  Briefing – or at least briefing well – is a time-consuming business.  So is reviewing the stuff.  And rebriefing.  And re-reviewing.  And re-rebriefing.  All this can make you even more exhausted and miserable.

–  Quite frankly, you’ll probably do it better than the people you could delegate to. In a business where the truest cliche is that your agency is only as good as its last piece of work, are you sure that you want it to be less good than it could have been?

–  Equally frankly, and perhaps especially in smaller businesses, it may well be that the clients appointed you because they wanted you to do it, not the newly-hired junior team.    They may not be very happy if they know that’s what happened.

Don’t get me wrong.  As I say, I’m not stupid, and in the end, most of the time, I recognise that the arguments in favour of delegation are that little bit more overwhelming than the overwhelming arguments against.  And as a result, during my agency years, I really wasn’t a bad delegator.

But for the last two and a half years, in my role as the Entire Workforce of Lucian Camp Consulting, I’ve had no-one to whom I can delegate the stuff which I think I can do well myself.  And I must admit, regardless of that advice from Gill and Holt PR, I am kind of liking it like that.


Why ants can’t see humans (allegedly)

I don’t suppose this is true, but I read somewhere that even when we’re standing virtually on top of them ants can’t see us because we’re too big for their eyes to be able to make us out.

I wonder if the reaction (or rather lack of reaction) of the financial services industry – and specifically the intermediary sector – to Fidelity’s new ISA Guidance campaign may be working in the same way.

As investment campaigns go, it is objectively huge – in the first couple of weeks, it was appearing in up to half a dozen spaces in single issues of mainstream newspapers, as well as everywhere else.  But I’d say it’s conceptually even huger – the first time, I’m pretty sure, that a leading asset manager has run a campaign specifically proposing to help consumers make investment choices.

Of course Fidelity are not in the regulatory sense giving “advice,” and they can’t use the A-word.  But to real people (if not to regulators), “guidance” is a rather poncier word for what’s basically the same thing, and guidance is definitely what Fidelity are offering.

You might imagine that this would have caused a huge furore in the industry.  After all, product providers have been tippy-toeing around the whole area of advice/guidance/information/anything-that-looks-even-remotely-likely-to-eat-the-smallest -mouthful-of-the-intermediary’s-lunch for well over 20 years.  And right now, things have got to such a fever pitch that literally dozens of providers are more or less good to go with launching D2C services of one sort or another, but are hovering on the brink for fear of becoming primary targets for those advisers’ anger and resentment.

And yet, while others continue to hover, Fidelity have now simply gone and done it – they’ve clambered up out of the trench and begun advancing, with no zigzagging, smoke or covering fire, directly towards the advisers’ lines.  And the reaction has been….nothing.  If you search “Fidelity ISA Guidance” on Money Marketing or New Model Adviser, you get nothing.  If you look for incensed comments from the usual claque of incensed IFAs you get nothing.  Just because I thought I should, I just searched the Financial Adviser website, and got…nothing.

Remarks about the curious behaviour of the dog in the night-time would seem to apply, and of course it may be that the dog is about to launch a volley of furious barking.  But I’m not so sure.  I think the moral of the story is that Fidelity have launched by far the biggest and noisiest raid yet into what advisers think of as their territory, and no-one has paid them a scrap of attention.

I’m thinking that all this is likely to encourage a lot of the members of the hovering-on-the-brink brigade to clamber up their ladders and follow Fidelity across no-man’s land.  I only hope they won’t find that the adviser army’s machine-gunners have loaded up and found their range.

Seems my usual Q1 opportunity to devastate my prospects list won’t be happening this year

Every year, regular as clockwork, since, oh, I don’t know, about 1927, I’ve turned up in Money Marketing at about this time, putting my name to a self-evidently counter-productive article – a review of the first-quarter ISA season advertising which is generally so unflattering that all the asset managers named in it immediately cross me off their lists of people they’d ever like to do business with, speak to or even sit next to at the Money Marketing awards bash.

But not this year.  Mid-March already, and no such article has appeared – and I can tell you, to put you out of your agony of uncertainty, that no such article will be appearing any time soon.

Why so?  Is it that I’m tired of shooting myself in the foot so regularly?  No, it’s for a different reason – I can’t see any (consumer-facing) ISA advertising to review.

Actually, that’s not quite true.  There is one gigantic ISA campaign out there, so big that it almost compensates – at least in media expenditure terms – for the absence of all the others.  This is of course Fidelity’s important and mould-breaking ISA Guidance campaign, a breakthrough initiative so significant that I think it deserves a blog of its own in due course.  But apart from that, the only thing I’ve noticed has been a boring, recessive and obscure tube card campaign for one of the so-called new wave D2C players, Nutmeg, which serves only to demonstrate that among the many radical and progressive skills to which new-wave players lay claim in this dinosaur-ridden industry, the ability to understand and engage with consumers is definitely not included.

So again we must ask the question:  why so?  Where’s everyone else gone?  It’s hard to believe that they all simply forgot to get new campaigns ready:  there must be a better explanation.  I can think of four or five things that it might be, although I must admit that the first in the following list seems distinctly unlikely:

1.  Reason has finally prevailed and retail fund providers have belatedly realised that actually ISA sales aren’t particularly skewed towards the first quarter, so advertising at the same time as all your rivals doesn’t really achieve anything except to ensure that you get an unhelpfully low share of voice.

2.  Plans and budgets for Q1 2013 were set back in Q4 2012, when the markets were still horribly volatile and scary, and no-one thought there was the slightest chance that they’d be rocking up to all-time highs during the following quarter.

3.  Retail fund managers are so anxious about the threat to their margins posed by the RDR that they’ve battened down all the hatches and can’t even stump up a few hundred grand for some cross-tracks at East Croydon station.

4.  Retail fund managers are so anxious about the threat to their distribution posed by the RDR that they’re working flat out on exciting new D2C initiatives and are saving every available marketing pound for big-ticket launch advertising campaigns.  (I wish.)

5.  There are in fact just as many ISA campaigns as usual, but this year they’re so dull and recessive, and so massively overshadowed by Fidelity, that I’ve simply failed to notice them.

I can’t think of any other explanations, but if you have any theories I’d be delighted to hear them.  And meanwhile, I must say, it does make a nice change to get through the so-called ISA season with only one name – Nutmeg, obviously – dropping off my prospects list.


Come on guys, I’m not even asking you to think the unthinkable here

When it comes to envisaging what new non-advised online investment services might look like, you don’t have to do anything as difficult as thinking the unthinkable – to start with, all you have to do is to not think the too-easily-thinkable.

Just don’t think about the next three thoughts, and do think about the following four, and you’ll get most of the way there.

First, don’t  think about Hargreaves Lansdown.  (I know that being told not to think of something is a sure way to make it impossible to think of anything else, so, OK, think of Hargreaves Lansdown for a few minutes and then move on.)  Admirable as their business is in its own way, our new service isn’t going to be anything like theirs.

Second, don’t think about choice.  This is not about giving people choice. They don’t want choice. That means not thinking about platforms either.

Third, whatever you do, don’t think about the phrase “DIY.”  I’ve recently come to the conclusion that this is an extremely unhelpful phrase.  It suggests that what we’re talking about here is the opposite of having someone else – i.e. an adviser – do it for you, in the same way that, say, DIYers might decorate their houses as an alternative to hiring decorators to do it.  I think that in the (non-hobbyist) investment market, this is an entirely false antithesis.  The people I’m thinking about don’t want to “do it themselves” – they don’t feel they have the confidence, the enthusiasm or the expertise. They want other people to do it for them. It’s just that they don’t insist on the other people being financial advisers who they meet face-to-face.

Third, think about ease and speed.  Think about that little gap that middle-market people get on a Sunday evening before they settle down to watch the Antiques Roadshow and Top Gear.  They have to be able to do this investing thing in those few minutes.

Think about solutions, not investments.  I don’t want investments, I want reliable outcomes.  I’ll tell you what I want, where I want to be and when.  It’s your job to get me there – I don’t really care all that much how you do it, although I’d like to know that I can find out if I want to.

Think about NEST.  Without many people paying it an awful lot of attention, the biggest and smartest thing in mass-to-middle-market investing actually landed last year.  Do you know how their investment proposition works?  If not, you should.

And then finally think about a nice big advertising and promotions budget.  That’s crucial.  Whatever we’re going to do here, it has to seem big and important and game-changing.  No crappy little thing that no-one has ever heard of is going to change the world.

Don’t think about the things in the first three paras, and do think about the things in the second four, and if possible put all those thoughts together into a single whole, and you should be able to see the new world of middle market investment pretty well.

Now what we need are organisations brave enough to build it – not IFAs or start-ups (no money), not existing providers (too frightened of antagonising IFAs and/or the regulator).  So who?  I’m not sure if I’ve thought my way through that one yet.


Oh no, another morning of RDR rage

Just back from yet another Financial Services Forum event on RDR and the implications thereof, and as usual I’m seething with anger and frustration –  partly at the continuing confusion and misunderstanding that most people still seem to bring to RDR-related matters, and partly because of the collective failure of the FS imagination to be able to see any way that things could start to become very different as a consequence of it all.

This feels like two blogs’-worth of grumbling, with this first one focusing on the confusion and misunderstanding side and the second on how things could be different.

Much of this morning’s discussion, fuelled by some very confusing and misleading new consumer research findings, was to do with the already-flogged-to-death shock horror around the alleged danger that financial advice will be withdrawn from large numbers of modestly affluent consumers (the cited investable assets figure is almost always £50,000) with allegedly disastrous consequences.

As far as I can see, virtually everything about this panic – actually, perhaps it is absolutely everything – is wrong.  Let’s count the ways.

1.  As far as existing clients with £50,000 or less invested are concerned, IFAs definitely won’t want to rock the boat because for as long as the boat remains unrocked they continue to enjoy 0.5% of trail commission every year.  The idea that they’ll be actively shedding all these little  00-Gauge gravy trains is ridiculous.

2.  As far as new business from either existing or new clients is concerned, the fact is that the remuneration that most IFAs will be proposing post-RDR is in real terms exactly the same as it was pre-RDR:  3% upfront and 0.5% ongoing adviser charge.  And under the Provider-Facilitated Adviser Charging regime, these amounts will be taken directly from the value of the clients’ investments, just as they were under the commission regime.  Something conceptually important has changed:  it is now the client paying for the advice, rather than the product provider paying with the client’s money.  But in practical and financial terms, nothing has changed.

3.  This can only mean one (or more than one) of three things about the previous commission regime:                                                                                                               a)  Intermediaries never realised how dreadfully unprofitable these clients were, but as a result of the analysis they’ve been doing in preparation for RDR they have finally come to understand the full horror of the situation.                                                                             b)  Intermediaries did realise that they couldn’t possibly make money on these numbers, so they tended to pile these low-value clients into very high-commission-paying products like investment bonds, where they could  help themselves to a completely-unacceptable 7% or so of the clients’ money.                                                                                              c)  They realised that they couldn’t make any money on these numbers if they actually did any work for these clients, so having once arranged the initial investment (and very likely pocketed the 7% initial commission) they then continued to trouser the 0.5% ongoing trail commission in return for doing no work and offering no service at all.

If any of these three things is, or rather was, the case, then you have to say that offering good financial advice to people with little money is fundamentally not viable, and the sooner it comes to an end the better it’ll be for everyone.

As I’ve said many times, people with little money rightly avoid top-of-the-market, high-cost advice in all sorts of areas.  They don’t get their tax advice from PwC, or their interior decorating advice from David Hicks.  When they get divorced. they don’t  become clients of Mishcon de Reya.  If they want advice on what films to watch, they get it from the newspapers and Time Out rather than personally from Lord Puttnam.  They get holiday advice from Expedia, not Ranulph Fiennes.  And they get advice on what car to buy from What Car, not an individual consultation with Jeremy Clarkson.

All of this is the least surprising news in the world, not least because in pretty much the whole of the previous paragraph I could have replaced “they” with “I”.  Nearly all the time, we know that the cost of individual financial advice is too high to make sense for nearly all of us.  But then, occasionally, we’re faced with something really difficult and important, and we decide we want the best advice, and we know we’ll have to pay for it:  a freelance friend of mine is currently the subject of a full HMRC investigation, and although he hasn’t actually gone to PwC he has gone to a specialist accounting firm that won’t cost him much less.

The really bad news for people in the middle and mass market is not that all of a sudden no adviser wants to touch them, but is rather that for at least the last thirty years – probably longer – there has been no widely-available, sensible, reliable, affordable way for them to buy the financial services they need.  There have of course been some good advisers serving this part of the market, and some good direct sales companies.  But let’s be honest:  not many.  On the whole, most of the time, the only choice people have been able to make is by whom, and in what way or ways, they want to be ripped off:  dodgy commission-driven product recommendations, excessive initial charges, excessive ongoing charges, consistently poor performance or a complete lack of fitness for purpose.  (At worst, as for example in the case of PPI, for millions of people it has been all of the above.)

If RDR brings some new pressures to bear that accelerate the demise of this disgraceful era, I see that as an entirely good thing to be welcomed with the most open of arms.  I simply cannot understand why so many others – including most at the event this morning – see it primarily as a Withdrawal Of Advice From The Mass Market shock horror scandal.

Sometimes breaking industry taboos is a good idea. But sometimes…

I’ll keep this short, because it’s about a fairly obscure advertising campaign for a little-known financial brand and I can’t find any examples of the ads:  in short, from your point of view, dark night, black cat, coal hole.

But anyway.  As far as advertising ideas are concerned, there are a few where an entirely unspoken industry-wide taboo exists.  No-one has ever discussed it.  But all agency creative directors, and nearly all creative teams, have a shared sense that the ideas on the list wouldn’t be good ideas – that any campaign using them would be a bit, or indeed a lot, of an embarrassment.

To be honest, my mind has gone blank and I can’t think of other examples – suggestions very welcome from anyone with a better memory for such things.  But one which is towards the top of the list is anything based on the two overlapping meanings of the word “relationship” – “relationship” as in “business relationship” or “relationship with professional adviser” on the one hand, and “romantic/personal/(God forbid) sexual relationship with a partner” on the other.

Instinctively, we all know that there’s nothing to be gained, and a lot to be lost, by mixing up the two.  The relationships that we have, and value, with professional and business advisers have nothing useful in common with the ones where we exchange bodily fluids.  And it’s no better even if you steer completely clear of the bedroom:  a picture of a couple enjoying a romantic Valentine’s Day dinner may be sweet and romantic, but a picture of someone doing the same with their financial adviser is hideous and tragic.

To be fair, the current UK campaign from South African wealth manager Sanlam for its UK Private Investments business doesn’t actually include any pictures at all, except for the background texture of pinstripe suiting which sits behind all the copy.  But the headlines – none of which I can remember – make it quite clear that the copywriter very much has the double meaning of the word “relationship” in mind.  And the result is one of the most toe-curling campaigns I’ve seen in a long time, denied full-fate Shake’n’Vac status only because it’s small, obscure, recessive and so dull in appearance that very few people will pause to absorb the appalling crassness of the copy.

So.  I can’t say that I was in any doubt that this two-kinds-of-relationship thing was a terrible idea.  But if I was in no doubt before, I’m in absolutely no doubt whatsoever now.